Developer asks to change zoning rules to allow new townhomes in more areas

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As the real estate industry in Salt Lake City continues to struggle from high-interest rates and building costs, one developer says it has a way to increase the number of for-sale townhomes.

TAG SLC, a development firm in Salt Lake and a Building Salt Lake Sponsor, has been prolific in building “missing middle” housing throughout the valley, often constructing owner-occupied infill  and flexible housing options. 

TAG recently asked the city to change the text of its zoning code to allow for single-family attached units — think owner-occupied townhomes — in any zone that allows multifamily housing. The reason, TAG’s representatives said in an application filed last week, is that the city’s current code drives investors to fund even townhome projects that remain rentals.

They say the change would encourage more missing middle townhome projects that are sold off by the unit to new owners.

“This zoning text amendment is a direct response to concerns within our own firm and those voiced by the developers, architects, and industry professionals we engage with regularly,” the group wrote in its application.

“This amendment is not tied to a specific project but rather seeks to address a systemic issue,” it wrote. “The current zoning regulations inadvertently favor rental housing over homeownership by creating unnecessary hurdles in producing more for sale units.”

While condos are usually allowed, the restrictions with condos make them less attractive to both developers and buyers, TAG wrote. 

Shared ownership and ownership percentages carry high risks for everyone involved. There is less financial security and even less guarantee that condo units will be sold and lived in by the owner rather than rented. Condos also do not automatically qualify for FHA or VA loans, creating more problems for those interested in buying in today’s high-interest market. 

While some townhomes are built and sold as condos, such as a new development on Paramount Ave in the Ballpark Neighborhood, this is not the common trend or the desired outcome for either homeowners or developers. 

The proposed text amendment would allow for single-family attached homes by-right development where a developer might instead build multi-family, expanding opportunities for developing smaller parcels spread out in zones such as the Central Business (CB) or even the Transit Station Area (TSA) and Downtown zones. 

“This text amendment proposal seeks to enhance housing opportunities in Salt Lake City by allowing single-family attached housing wherever multi-family is permitted, promoting sustainable growth and making homeownership more accessible to its residents,” TAG wrote.

The application also points out how the plan aligns with Salt Lake City’s goals for housing, displacement, and increased home ownership access. This is reflected in the goals of the Housing SLC and Growing SLC plans. 

A change like this would be pivotal in allowing for more for-sale housing and would only add to the changes already made by the city. The RMF-30 changes already show that a market exists. New proposals underway in the town for adaptive reuse and density bonuses show the city’s willingness to increase housing stock and fill the “missing middle.”

As the city continues to grow, housing demand will still increase. Homeownership is one of the main goals of the current administration, and proposals such as this show the community the willingness of developers and builders to help ease these problems. 

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Posted by Zeke Peters

Zeke Peters is a dual-masters student at the University of Utah studying Urban Planning and Public Administration. He works as a planner and designer in Salt Lake City. He currently resides in downtown Salt Lake and is from Austin, Minnesota, the birthplace of SPAM.