The Road Home wants to turn a parking lot in Central 9th along State Street into new, deeply affordable housing units, and they need the Salt Lake City Community Reinvestment Agency’s help to make that happen.
Members of the Salt Lake City Council are slated to hear a pitch this week that could lead to the redevelopment of Palmer Court, a permanent supportive housing project located at 999 S. Main St. Council members, who would be acting as members of the city’s CRA board, will hear a proposal during their meeting Tuesday afternoon.
The Road Home, which operates Palmer Court, wants first to redevelop the remaining vacant space on their property by building a new facility, to be named the Gardens at Palmer. The existing Palmer Court, a converted motel, would in a second phase be demolished, according to a staff report on the proposal.
The new building would consist of 187 new housing units available to people making at or below 30% AMI, which is considered “deeply affordable.” Salt Lake City’s AMI is currently $122,700, meaning that a family of four would have to make under $36,800 per year in order to qualify.
Deeply affordable housing is considered a strong resource for people who are trying to escape homelessness, and new housing at this price point is in very short supply in and around Salt Lake City.
The staff report says the Palmer Court site is currently being underutilized — with around 60% of the land being used for parking lots or landscaping — and the new development would largely be built on its existing parking lot.
If everything goes to plan, all residents of Palmer Court would be relocated into the new Garden at Palmer building and Palmer Court would be demolished and redeveloped. The staff report says that could happen sometime in 2028.
However, for that to happen, the CRA board will need to make some adjustments to the terms of an existing loan for Palmer Court, which is why the topic is going before the CRA this week.
When the project began back in 2008, the city’s CRA (then the Redevelopment Agency of Salt Lake City) approved a $3 million forgivable loan to help with Palmer Court’s development, and that loan matures in 2033, according to a city staff report.
Loan terms include a provision that allows for $300,000 of annual loan forgiveness that started in 2023. That forgiveness is dependent on Palmer Court continuing to have 60 rooms set aside for Single Room Occupancy (SRO) short-term rentals available on a weekly basis. These units were set aside to mitigate the CRA’s move to demolish two SRO hotels at the current site of the Aster Apartments at 265 S. State. The people who lived in those hotels were given first choice for rooms at Palmer Court once it was finished, the staff report says.
In order to build the Garden at Palmer and redevelop the existing Palmer Court building, the CRA must approve changes to the existing loan terms.
The weekly rental aspect poses challenges for funding, as the staff report says, “SRO units rented on a weekly basis may cause issues if transferred to the new development, due to incompatibility with LIHTC regulations and Project-Based Voucher requirements, which mandate initial minimum lease terms of six months and one year, respectively.”
The Road Home is requesting the short-term SRO units change from weekly rentals to long-term leases, which would apply to both the existing Palmer Gardens units and the future units at the Garden at Palmer. Though the SRO units are meant for short term rentals, the staff report says the average time a tenant occupies a SRO unit is over three years.
“This modification will ensure (The Road Home’s) ability to unlock required capital and operating subsidy resources and to ensure the new facility’s optimal operational viability,” the staff report says. “This modification will also improve existing operations, allowing (The Road Home) to fill vacant units with residents with vouchers.”
Deeply affordable housing is a particular focus for Salt Lake City Mayor Erin Mendenhall, who highlighted the need for more of this type of housing during her 2025 State of the City address.
According to the city’s affordable housing metrics, the city is drastically short on its deeply affordable housing goals as outlined in the Housing SLC plan. While the city has paved the way for a large amount of affordable housing, which is categorized as housing at or below 80% AMI, it’s severely behind on its goals for deeply affordable housing.
The change will be up for discussion during the CRA meeting on Tuesday afternoon at the Salt Lake City and County building. The CRA board has the ability to vote on the proposed change during the meeting.
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