Utah’s $55 million for affordable housing is a start, but only goes so far
Many Utahns still struggle to find housing they can afford, but an influx of state money is meant to help alleviate the crisis.
The Utah Office of Homeless Services announced $55 million in funding for 17 affordable housing projects on Friday. The funds will help bring 1,078 affordable units to the market in the coming years.
Gov. Spencer Cox originally asked for $128 million to go toward deeply affordable housing in this year’s budget, but the legislature trimmed that number in March. On Monday, 14 faith leaders from across Utah called on the state to increase funding for housing to reduce homelessness.
Although the $55 million certainly helps, officials acknowledge a lot more is needed to address the state’s housing crisis.
“That’s a big deal for our state, but it is kind of a small dent in the need, statewide, for deeply affordable housing,” said State Homeless Coordinator and former Utah Senate President Wayne Niederhauser.
According to Niederhauser, most of the new units will be available starting in 2023, but some could come online as early as this fall.
Over 500 of the new units are also categorized as “deeply affordable” – meaning they are available to people who make less than 40% of an area’s median income –- and are geared toward addressing homelessness.
The money only partly funds the projects. Affordable housing, as it turns out, is anything but affordable to build.
“Since COVID, we’ve seen an extremely volatile construction market,” said Community Development Corporation of Utah Director of Real Estate Development Todd Reeder. “These types of projects are just getting so much more expensive to build. Our intent, always, is affordable housing shouldn’t be really cheap housing, it should be good, stable, safe housing. So the cost of building market-rate housing and affordable housing is very similar.”
According to Niederhauser, government subsidies are a necessity when it comes to building affordable housing.
“[Affordable housing] does not pencil for a profit developer,” said Niederhauser. “You cannot make it work without a lot of subsidy, so you don’t see a lot of this happening just naturally. It requires these kinds of programs to get nonprofits and for-profit private organizations to either purchase and remodel housing or build from scratch.”
Niederhauser said the Office of Homeless Services received $168 million worth of project applications this year and hopes that demand will bode well for future funding.
“I believe we were given $55 million to test the process to see what the results would be,” he said. “So far, I think the results are extraordinary and hopefully we have a good argument to get more money going forward.”