Utah governor doubles down on goal to build 35K homes in 5 years 

Before the 2024 Utah Legislature started, Gov. Spencer Cox’s budget recommendation included a $150 million investment toward an ambitious goal to create 35,000 new starter homes in Utah by 2028. 

Even though what ultimately came out of the 2024 session was very different and much less expensive than what the governor proposed, Cox was all smiles Thursday while ceremoniously signing what he called some of his “favorite” bills meant to increase the supply of “attainable” housing across the state. 

The governor also reiterated his commitment to that 35,000-home, five-year goal. 

“We’re going to build 35,000 starter homes over the next five years. We’re going to do that,” Cox said during a news conference at a housing development in Lehi. “We’re going to make it happen.” 

Utah’s new housing experiment

As he’s said multiple times before, the governor reiterated his belief that the state’s skyrocketing housing prices are “the single greatest threat to the prosperity of our state.” 

“What will happen if our kids and grandkids aren’t able to eventually own property and buy a home in this state?” Cox said. “We cannot let that happen.” 

Utah’s housing affordability crisis is on track to worsen as the state’s population continues to grow while its housing shortage is projected to increase to over 37,000 units this year, according to research from the University of Utah’s Kem C. Gardner Policy Institute. 

Amid today’s elevated interest rates, Utah’s home building market has constricted as developers struggle to finance projects. But Cox hopes these tools will help make more projects financially feasible — and help Utah make progress on shrinking its housing shortage. 

“Let’s build some houses,” he said. 

What did the Utah Legislature do for housing?

When it became clear that legislative leaders, saying they faced a tight budget this year, wouldn’t be game to pump $150 million toward housing investments, lawmakers and the governor’s office worked together to pass a slate of bills that focus less on subsidies and more on “free market policies.” They created a slate of new tools cities and developers can use to finance infrastructure or other needs, hoping to pave the way for more affordable, single-family housing projects. 

Cox said he was thrilled with this approach. 

“I truly believe that this is the most aggressive housing package in the country and that it will move the needle in a very, very big way over the next five years,” Cox said. 

Cox is optimistic — but it remains to be seen how many homes these new zoning and financing tools will produce. That’s because it depends on how many cities and developers take advantage of them.

Lawmakers did not go as far to force cities to zone for higher density housing or more affordable housing types like at least one stalled bill would have done. Rather, all of the bills legislators ended up passing won support from a variety of stakeholders, from home builders to the Utah League of Cities and Towns, which advocates against legislation that chips at cities’ local authority. 

City officials have argued “upzoning” or forcing cities to allow higher density housing wouldn’t solve the problem. Throughout the session, the Utah League of Cities and Towns pointed to a data point from November when 66 cities reported to the League that a combined 190,000 housing units were zoned for and entitled — but not yet built. Standing in the way of many projects, they said, was the lack of existing infrastructure like streets, sewer lines and sidewalks. 

However, some lawmakers said they’ve already heard from developers saying they’re interested in using the new tools, including Rep. Jim Dunnigan, R-Taylorsville, sponsor of one of the bills Cox ceremoniously signed, HB13 — which allows the creation of “infrastructure financing districts” to help finance infrastructure needed to facilitate housing projects. 

“Since this bill was passed, I’ve already had developers reach out to me — they have thousands of entitled building lots — that said, ‘We think this is a tool we’re going to use,’” Dunnigan said. 

“Love it,” Cox said. 

The bills Cox ceremoniously signed Thursday also included several dealing with transportation and transit, issues cities and counties must also plan for when considering housing projects:

• HB476 clarifies state code and places certain requirements on cities to accept and complete applications for residential development to create more certainty for both home builders and cities.
• HB465 provides flexibility for redevelopment agencies to use money for owner-occupied, income-targeted housing — not rentals — up to 120% of the area median income. It also encourages the body that’s overseeing development at the former Utah State Prison site in Draper, the Point of the Mountain State Land Authority, to use its land use authority to “increase the supply of housing in the state.” 
• HB430, a bill to create Public Transit Innovation Grants using existing transit dollars to help cities increase transit opportunities in high-growth areas.
• HB13 allows developers of approved housing developments to create “infrastructure financing districts” that could bond to pay for infrastructure improvements, like roads, but the debt would need to be paid off before selling the homes. 
• HB488 creates the County of the First Class Infrastructure Bank Fund to provide funding for local transportation projects.
• HB572 allows the state treasurer to administer a new Utah Homes Investment Program, which would use $300 million from the state’s existing Transportation Investment Fund to offer low-interest loans to developers so long as they strike an agreement with cities to build an owner-occupied housing project with at least 60% of its units defined as “attainable.”
• SB168 sets a statewide building code for modular homes and allows cities or counties to create Home Ownership Promotion Zones, which would enable cities to capture tax increment for up to 15 years to finance the development while also allowing them to “upzone” or increase density for smaller, single-family lots. It would require at least 60% of the zone’s units to be affordable and all of them to be owner-occupied for at least five years. Cities can use the tool for areas that are up to 10 acres and are zoned for fewer than six housing units per acre. If a Home Ownership Promotion Zone is created, it will automatically re-zone the lots to be at least six housing units per acre.
• SB208, aimed at maximizing investment and allowing increased housing density around transit stops. It also increased requirements for affordable housing in these “transit reinvestment zones” to include at least 12% of proposed housing units to be affordable, with up to 9% to be reserved for households that make no more than 80% of the area median income and at least 3% for those who make no more than 60% of the area median income. 
• SB268 allows cities to create a new type of mixed-use project area, called a First Home Investment Zone, that can use tax increment financing (or future tax revenue from growth) to finance infrastructure or lower the cost of land and therefore lower the cost of housing. To create a zone, cities would need to adhere to a slew of requirements, like including an affordable housing plan in the proposal and making sure at least 25% of the zone’s homes are owner-occupied for at least 25 years.