The City Council was at odds with Salt Lakers who showed up in support of widespread adoption of accessory dwelling units in the capital city on Tuesday night, as it worked to finalize an update to a housing policy intended to generate more moderate income housing.
The majority of comments from the public were generally supportive of making the city’s ADU ordinance as relaxed as possible, welcoming in a period when property owners might be free to build a rental unit without needing to live on site, along with other changes.
That actually set the Council up in contrast to public sentiment that was displayed at the meeting. Just hours before accepting public comment, the council made its opinions known by taking a series of non-binding straw poll votes on the key policy issues at the heart of the update.
An owner-occupancy requirement will “limit the number of ADUs built, making them harder to finance and increasing renter instability,” said Eric Valchius, a Salt Lake City-based real estate consultant who published research on barriers to ADU financing with the Terner Center for Housing Innovation at UC-Berkeley.
In a 5-2 vote held before hearing from members of the public, the Council indicated it was unwilling to remove what is known as the owner-occupancy requirement (or the requirement that the property owner or a relative lives in the ADU or the primary dwelling if an ADU is built).
The Council indicated it supported a wide array of changes to size, design, height, parking and setbacks from property lines that should generally make it easier to design a structure that meets requirements for more properties in the city.
But that relaxation will primarily benefit property owners with the money to build these units, and ADUs can be fairly expensive and are notoriously difficult to finance given regulations that make rental income uncertain for underwriters.
Research has shown that owner occupancy requirements impede widespread creation of ADUs, which are viewed as a source of moderate income housing given they share land and property access with another party.
“Owner occupancy requirements also prevent property owners from developing repeat expertise,” said Turner Bitton, executive director of the pro-housing group Salt Lake City Neighbors for More Neighbors. “As a result, lenders are less likely to finance ADUs.”
There was a slate of opponents from the East Liberty Park and Yalecrest neighborhoods, some who said recently built or proposed ADUs were too large and others who talked about the need to protect neighborhood character and high home prices.
“Why would you be wanting to destroy one of the highest-producing property tax areas in the entire city just because a person wants to build ADUs?” one man from Yalecrest asked. “It just doesn’t make sense to me.”
Council members Dan Dugan (Yalecrest and East Bench) and Chris Wharton (Marmalade and Avenues) are perhaps the most vocal opponents to ADUs, although members Amy Fowler (Sugar House) and Valdemoros (Downtown and Central City) were also wary of some changes.
Darin Mano and Alejandro Puy were the only two members who voted in favor of removing the owner occupancy requirement during the straw poll vote on Tuesday afternoon.
“It would have been great to remove the condition and ask planning (in the future) how many of them were actually owner-occupied and which ones weren’t,” Puy said.
The Council agreed to relax parking restrictions. It agreed to increase the maximum size of ADUs to 1,000 square feet, after initially debating whether the intent of the ordinance should or shouldn’t be to allow for backyard homes that are large enough for a three-person family.
“I would like this to be a tool that can create multiple kinds of housing including family-sized housing,” Mano said.
It agreed to smaller setbacks from property lines, as recommended by planning staff. And it agreed to remove the conditional use requirement that ate up the time of Planning staffers and the Planning Commission.
Planning staff had also suggested allowing property owners with lots that are 12,000 square feet and above to build bigger ADUs (up to 1,200 square feet), but the Council voted unanimously to remove that distinction.
Again, all of that agreement is subject to change.
Generally, observers believe the changes would make a better policy than what exists today. The question remains whether the Council wants more property owners and investors to build more ADUs, or whether it risks another five years of relatively few ADUs built.
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