Well, it’s been a little over a week since the legislative session wrapped, and we’ve had some time to ponder the bills that were passed and what the effects might be. Bottom line is, I think we’ve accomplished something fairly unique in the annals of zoning reform here in our pretty, great state.
We tracked 36 bills that were land use/planning related, of which 21 passed. Many modified quite a bit from their originals, so what we might have thought was going to happen, didn’t, or was changed significantly (usually made “milder.”) Another statistic of note: more than 400 net lines of code were added to LUDMA this session, more than last year (388 lines), which I thought was pretty substantial then! LUDMA is getting huge and unwieldy – I defy anyone to understand everything LUDMA now stipulates in the practice of land use planning and administration, without having to engage in almost Talmudic-like study to make sure you’ve complied with all. And it doesn’t seem the trend is going to slow anytime soon.
As to what was passed, I would categorize them this way: housing affordability/zoning reform bills; LUDMA detail modification bills; and other planning-related bills (I kind of did that already in the March 3 blog post).
Let’s start with the housing affordability/zoning reform bills, as this is where I think the most notable things happened. First, some context.
As I’m sure you are all well aware, there has been substantial discussion for several years now, both nationally and locally, about the crisis of housing affordability. The sentiment is that local land use regulations, primarily zoning, have been significant contributors in causing this crisis (it is acknowledged that it is not the only cause, but often it seems it’s the only one that politicians, who want to show that they’re doing something, can do anything about). The result has been a number of measures in states around the country where legislatures have mandated that local residential zoning can no longer be exclusively single-family, but must allow for a variety of housing types, property size allowances, and other measures said to impact the cost of housing.
I think this is a good direction to go, but as might be expected, local officials have often not taken kindly to the top-down mandates coming from those at the state level who will not directly face constituents who are not in sympathy with such moves. This reaction is well-discussed in a piece by Anthony Downs in the Lincoln Institute of Land Policy’s journal Land Lines, titled The State of Local Zoning: Reforming a Century-Old Approach to Land Use.
As Downs notes, anecdotes of resistance, failed implementation, legal actions, and outright refusals by local governmental entities abound.
A recent example comes from Arizona, where the state legislature just last week passed a bill titled The Arizona Starter Homes Act. Among other provisions:
The legislation would prohibit municipalities from adopting minimum lot sizes, minimum square footage, or minimum or maximum lot coverage for single family homes.
The bill contains unusual legislative intent language:
That language says Arizona is in a crisis due to the lack of available housing and that “the American dream of owning their own home,’’ has become “virtually impossible’’ for many Arizonans. It specifically lays the blame squarely on the cities. “The statewide housing crisis is caused in no small part due to highly restrictive regulations imposed by municipalities,’’ according to the bill.
There appears to have been little or no collaboration with local municipal officials to craft the Arizona bill, much as has been the case in other states. Unsurprisingly, local officials and the Arizona League of Cities are not happy about the bill:
Tom Belshe, executive director of the League of Arizona Cities and Towns, (noted his membership) opposes the bill.
Nick Ponder, a lobbyist with HighGround Inc. that represents the League, told lawmakers the legislation would strip cities of their ability to ensure developers don’t build unappealing projects opposed by existing residents. He also said the bill wouldn’t solve underlying problems leading to a shortage of starter homes, like land costs and an influx of investor-owned properties.
So, apparently another strongly resisted state-mandated zoning reform measure looks like it will bite the dust, or at least be weakly implemented.
Why have I spent so much space talking about what’s going on in Arizona and other states on zoning reform? Mainly for this reason: it appears to me that what we have gotten through our Utah legislature stands a better chance of succeeding because it has been a collaborative effort. Local and state officials have worked together, both prior to and during the legislative session, to come up with something that may stand a better chance of being implemented and may actually move the needle on housing cost. About the only other state that has followed such a path has been Montana, with its Montana Land Use Planning Act, last year. But even that achievement is now on hold due to legal challenges from citizens (not local elected officials!)
The Arizona Starter Homes bill is not yet fully adopted yet, either. Arizona Governor Katie Hobbs has not yet signed the bill, saying she was looking for a better effort:
Hobbs said she would prefer to see housing bills as a compromise package between lawmakers and municipalities, which is typically done through the Arizona League of Cities and Towns. “The bill has not been transmitted to me yet. I’m still looking at it. What I have been very clear about is that when it comes to housing, I want to see a package that is negotiated, that has bipartisan support, and is a compromise with local jurisdictions.”
Here’s what we got from the legislature this year, which looks like it’s pretty unique:
Instead of state-mandated zoning provisions, which could range from a ban on single-family only housing zones to maximum allowable lot sizes and yard setbacks, we got a couple of optional, incentive-driven programs to encourage the characteristics that would allow for more affordable housing. These include the creation of a couple of new programs that would give local governments the incentive of additional revenue through tax-increment financing, if they establish areas that meet certain criteria.
The first of these is the First Home Investment Zone (FHIZ), set forth in its own bill – S.B. 268 First Home Investment Zone Act. Somewhat similar to provisions for Housing and Transit Reinvestment Zones, which were enabled a couple of years ago for areas around transit stations, the bill sets out a number of criteria which must be met, such as: the proposed area cannot include any area that is part of an HTRZ; must comply with local general and moderate-income housing plans; the minimum density of homes within the FHIZ must be 30 units per acre, over at least 51% of the FIHZ area; homes outside the FIHZ area may be counted toward the required numbers, but must be at a minimum of 6 units per acre, must be owner occupied with mechanism to assure owner-occupation; at least 12% of homes inside the FIHZ and 20% of those outside the area must be “affordable” deed-restricted, based on median home price or AMI; and so on. If the area is established meeting all these requirements, the local government may receive up to 60% of the property tax increment generated by the new development for 25 out of 45 years, to be used toward the cost of infrastructure for the FIHZ area development. There are many more details – you can see a good summary of those at the Wasatch Front Regional Council’s legislative summary.
Another similar program adopted is the Home Ownership Promotion Zone (HOPZ), which was amended into S.B. 168 Affordable Building Amendments, lines 358-573. This zone may be established by the local government on areas of 10 acres or less; must be zoned for a density of six units per acre or more; must ensure that at least 60% of the housing units are affordable (priced at less than 80% of the median county home price; and must deed-restrict the housing price for at least five years. There are a number of other provisions that apply. If a compliant area is thus created, the local government is entitled to receive 60% of the newly created tax increment for up to 15 years, to be used for project and system improvement costs for the HOPZ area.
The original model for these kinds of incentive zones, the HTRZ, created by legislation a few years ago, were also modified by a bill passed in this session. S.B. 208 Housing and Transit Reinvestment Zone Amendments, adds some affordability requirements for housing and ownership provisions in HTRZs, as well as a number of other more technical modifications to HTRZ requirements.
Other bills in this category are also incentive-based, primarily for financing of infrastructure, housing programs, and buyer/renter assistance. One of the things that provided the impetus for these bills was the revelation by municipalities that there are actually some 190,000 entitled lots that have been approved around the state, but are not being built upon by private builders/developers. The reasons are many, but one of the most common touted has been the lack of available financing to install the necessary infrastructure. Also, if the desire is to see more homes built that fall in the affordable range, there needs to be financing/incentives for builders to do so. Thus, these bills:
H.B. 465 Housing Affordability Revisions – among other things, this bill authorizes redevelopment agencies and community development agencies to use funding to pay for or contribute to the acquisition, construction, or rehabilitation of income targeted housing, under certain circumstances.
H.B. 572 State Treasurer Investment Amendments – directs the state treasurer to invest up to $300 million of the Public Treasury Investment Fund (PTIF – public entity funds deposited here until they are needed by the entity) as deposits with private lenders for “qualified projects” – housing developments where at least 60% of the units are sold as “affordable first homes,” owner occupancy required for at least 5 years. Other provisions also apply, but you get the idea.
H.B. 13 Infrastructure Financing Districts – modeled somewhat after PIDs which were created a couple of years ago, this new model provides a process for the creation of an infrastructure financing district with minimal public entity involvement, and provides for the powers and governance of such a district outside of local entity control.
S.B. 168 Affordable Building Amendments – in addition to the HOPZ program, this bill makes modifications to some state housing assistance programs, and most notably establishes a state-wide uniform standard for construction and certification of factory-built modular homes (on the idea that modular construction is cheaper than on-site construction.)
I’ll say it again, I think this is a pretty unique approach to “zoning reform,” compared to what we are seeing in other states around the country. The proof will be in the pudding, however – will local governments put these programs into place, and will builders/developers make use of them? Only time will tell.
While all these bills were part of a collaborative, incentives-based effort, that is not to say there wasn’t at least one attempt to impose a more “typical” state-mandated zoning reform style bill – H.B. 306 Residential Housing Amendments. This bill would have established a(nother) definition of starter home, and made them permitted uses in all local residential zones. It also would have set a maximum lot size of 5,400 sf for all residential lots. The bill was crafted and introduced without any discussion with local entities or state officials, and was subsequently frozen from any action as the other, more collaborative bills were moved forward.
Okay, this has been a rather long post so far, and I haven’t yet addressed the other two categories that I set out at the beginning – LUDMA detail modifications bills, and other planning-related bills. To see those, take a look at the March 3 blog post, those bills are pretty well categorized and summarized there.
And to get more details on all these bills, don’t forget the upcoming legislative update sessions – see the end of the March 3 blog post for dates and places.