H.B. 492 Transportation, Infrastructure, and Housing Amendments: transcript

Just gimme one second, Mr. Chair. Okay. Ready? Yep. All right. Well, colleagues, uh, we've talked about this issue a lot, uh, um, lately. Let me just set the stage on some data. I think that's important. Since 1985, the median home price has increased on average year over year, 5.2% for 40 years. If you look at median wage growth, it's down at 3.2%. Now, you don't need a advanced math degree to understand that that 2% gap between where housing prices have been on average growing versus wage becomes a massive chasm over, over a 40 year period. Back in 1985, you could buy a median home with a wage, a median wage that about 2.8 times the median wage. Today, it's somewhere like five and a half times. It's a problem. When we talk about housing, and you know, what the problem is and what success looks like in housing, to me, what it looks like is having housing prices grow at a similar rate of growth to wages. If you've got, if we continue to have home prices, outstrip wage growth, you have a situation where the middle class continually gets further priced out of the market. Now, over the last several years, the traditional fight over housing and land use has been what is the, the, the, the role of the state versus the role of the local government in terms of land use authority. That's where the fight has always centered. What we've tried to do is to think differently about the problem in this bill. Instead of having the same fights where we say, you know, the state will come over the top of local government and, and, and tell them what to do and how to zone and how to plan, we said, what if we can find a way to partner with local government, uh, to help them in their efforts, um, to plan housing? Now, if you talk to many folks in local government, what you'll hear is 190,000 units currently throughout the state are entitled in some various form. And what I always say is that that doesn't mean that they're necessarily permit ready. They could be at various stages of the entitlement process, but even if it's just half that number, it's a significant amount of homes that have been planned for, but if not yet been built. And so the question you have to ask is, well, why haven't they been built? Certainly part of its macroeconomic environment, interest rates have been high for a long time, uh, for the past three or four years. And that's been a challenge. But part of it, at least part of it, is a lack of regional infrastructure to support those planned units. So what this bill is trying to do is to think differently about housing and to shift more around a partnership between state government and local government to make strategic investments in regional infrastructure to help support and unlock housing that's been planned by the local government housing that they've said, we want this. We like this, we've planned for it. Um, so in terms of the nuts and bolts, what the bill does is it creates a hundred million dollars infrastructure fund. And what it, what it's doing is it's actually taking a hundred million from $300 million that the legislature, um, the dedicated three I wanna, uh, three years ago to a, a developer loan bank. Okay? So it takes a hundred million dollars from that. And instead it says, we're gonna use this to support regionally significant infrastructure. And what do I mean by that? This could be sewer lift stations, it could be water treatment facilities, it could be water tanks, it could be large regional roads, um, but regionally significant infrastructure. And so it creates this fund, it repurposes some of this old money. And, um, it creates a process where local government can come to the state to a committee, and you can read about the committee in detail in the bill, but they can make an application for infrastructure dollars to support the housing that they've planned. And, you know, the committee will have various criteria, uh, to assess the number one criteria is does it lead to single family detached, owner occupied housing? Because if you look at the market right now in the state of Utah, that's the kind of housing that we're missing. We used to build that type of housing after World War ii. You can see it. You go look at the old 1940s, 1950s housing stock, and you'll see these smaller single family homes with small yards and white picket fences. We don't build that product anymore. And so it's trying to say, here's some infrastructure dollars available cities. Here's the kind of housing product that we want to see. Um, it also has some geographic diversity. So, you know, it's not just meant to be used for the Wasatch front, but also for our rural communities. And then ultimately those dollars get repaid, uh, primarily what I would anticipate through impact fees or some other kind of revenue stream that, that the cities, um, can pledge. It provides some flexibility for cities to really create the financing solution to meet their need. Um, but that's it. That's the detail. And what I believe is if we can, you know, a hundred million dollars isn't gonna change the, the, uh, the infrastructure picture overnight. And it's sort of a pilot run to see how it goes. But I think it's a small attempt to try to partner with local government around infrastructure to unlock already plan for housing, and to ultimately introduce more housing supply that we so desperately need in the state, and to slow down that rate of growth that I mentioned at the beginning. So, uh, with that, Mr. Chair, I'm open to questions.

I have a couple thanks. And I assume you're speaking to the second sub? Yes, the second sub. That's right. Um, a couple of things. There's an $18 million loan for point of the mountain in here. Why, why is that included? What does that have to do with starter homes? You read it carefully, Mr. Virus care.

Um, well, so here's the thing. So the state owns the point of the mountain land. That's our land, that's the state land. We entered into a development agreement three or four years ago, um, with some private developers as part of our obligation to the point of the mountain was that we needed as the state to put in the backbone infrastructure. If we don't put in the backbone infrastructure, we're, we're, we're, we're, uh, in breach of our development agreement. And so, uh, this seemed like we had this problem we needed to solve to get some infrastructure into the point. And this fund was a, an easy way to do it. The repayment of that $18 million loan to the point is actually gonna come from the cell of some acreage there. It's actually in my district. Um, and, and, uh, and the acreage is actually, there'll be some smaller affordable homes being entitled and zoned on the acreage. So that's, that's why it's in there. Wave your hands a little bit and say, this is housing too. Well, no, I mean, it, it certainly is the payback mechanism on the payback mechanism for the loan is the sell of the entitled land that will have small, single family homes. You'll probably have some town homes on it, but it was, it was sort of Mr. Vice chair, like, kill two birds with one stone. The state has to go put in that backbone infrastructure. Uh, we had this money that was, that was sitting there, um, and this seemed like a good way to address that, but don't let that distract you from the larger, the larger bill is that ultimately, uh, this, this money will go into cities across the state. Again, it's city initiated. They gotta come. It's, it's city driven, um, and ask for, you know, the money and structure it around a repayment and ultimately support, uh, planned housing.

Does that answer your Question? Yes, thank you. And I'm supportive of the concept, uh, on these infrastructure loans. It says the, uh, interest rate will be within 1.5% of the federal funds rate. Is your anticipation. This will be above the federal funds rate or below the federal funds rate. Uh, and I mean, how, how big of a discount are we talking on these loans?

Yeah, great. Great question. It it's meant to be a, a bandwidth, uh, a band. So plus or minus 150 basis points on Fed funds. So this is cheap money. Um, if you go below the Fed funds rate, it's very cheap money. That's, yeah. There is a, there is a small return, obviously to the state. I think the Fed funds rate right now is something like 3.5%. So this would look like anywhere between two to 5% money. The idea here is not that we want to make a great return for the state from an economic perspective, it's that we want to try to support, excuse me, regionally supportive, a regionally significant infrastructure with a nexus to housing. And so we're, we tried to create some latitude around the, the structure. We, if you'll notice in the bill, we didn't want to overly engineer the process. Um, because if you be difficult for cities to fit into that box, we all have had that experience. You're dealing with the government, it tells you in order to get this or to do that, you gotta be exactly in this little box. We try to create some general broad parameters. Um, I think ultimately there'll be some legislative oversight with this committee, by the way, um, with the, the housing reorg bill, which is over on the Senate side now where we can follow up on this. But the idea is that you, you create some flexibility on rate, on structure, on term, on payback method, and you hopefully can find creative solutions that are city driven and hopefully unlock, um, additional housing supply.

Great. And in, in terms of, uh, I, I realize you've given a lot of leeway to the board on how to run this. We don't wanna be too prescriptive, but is it anticipated that, uh, applications that have a higher preference or a higher number of starter homes could get a better interest rate than others? Or is it anticipated everybody will probably get the same interest rate on this?

Uh, it's, it's a good question. I, yes, I mean, the way, the way I ideally like to see it play out is that those projects that can get the biggest bang for their buck in terms of the housing product we want, which again, I'm just gonna double emphasize it, it's the single family detached starter homes that those are gonna be the priority. And, you know, I'm sure there'll be some give and take and some decisions. We'll see what the demand is for this, right? I mean, we want to put it out there. We want to see do cities find this useful? I think from all the cities I've talked to, we had a great even meeting just yesterday with four, uh, city managers from cities across the Wasatch front about, you know, how this tool can be used. I think there'll be a, a adoption, but I'm conservative in nature and I, you know, we wanted to try to keep it tight, but keep it flexible, um, to see if, if it's, you know, if there's real demand for it.

Great. Thank you. And, and last question on the, uh, the makeup of where this money is. I think you mentioned a hundred million dollars is the goal to, to start with where this is gonna come from, it says, uh, you know, the federal government could always provide an appropriation where it could come from private sources or appropriations by the legislature. Would that include, do you anticipate that current funds would be used or funds could be appropriated from rainy day funds or other housing funds for this? Is this all new money? No,

It's, it's, it's a little funky. The fund, the, the funding mechanism. So if a few years ago there was a bill passed that, uh, used basically the cash float from the transportation investment fund, which that fund is what we used to build pretty big. Say that again. Yeah, it's Pretty big. So there'd be a decent amount of float coming off, Correct? Correct. And so you've, you've got this float and the idea was, hey, we use that money to invest in apple's corporate bonds and this thing and that thing. You know, can you carve out a little slug of that to go and invest directly back into the state of Utah? And it was structured as we're gonna do this with, um, alongside private bank money to go to help buy down the interest rate for the private development side. This bill, to be very clear, is totally separate from that, whether you love that bill or you like that bill, the idea, but the idea of this bill is that we're taking a piece of that, that money that was being floated and used for that, and we're just gonna use it for this instead.

And you mentioned private sources. If, if there were private sources, does this means somebody could invest, be basically become an investor in this fund? Or is this anticipate like more grants? Point, point?

Which line are you looking at? Mr. Vice chair?

I was looking at, uh, maybe line one 30.

Okay. Grants, gifts, loans or other funding from federal government or other public or private sources. This isn't something that the philanthropists could say, Hey, I'm gonna invest in this fund and get a return on it. Uh, That's certainly not the intent. And I'd be open to some kind of amendment if that is unclear. No, the, the, the money, I know where the money's coming from. It's, it's coming from the P tiff money. It's not gonna go out there and open up the coffers to private investors who wanna make, you know, 2% return on their money with the these loans, which, you know, if anybody wants to do that, I'd say they're crazy. Anyways. And this is the, the transportation infrastructure fund, not the treasurer's, uh, uh, fund. It's the cash float that the treasurer manages related to the tiff.

Great. Thanks. And we've worked closely with the partners in UDOT around this, uh, you know, the Utah Housing Corp currently administers some of that money. You know, I think there's probably worth a discussion whether that money should be Sunset at some point. I think this is a better use for at least a hundred million dollars of it. Um, because again, it's gonna be going directly into very needed capacity infrastructure projects across the state. So does that Yes, That answers my question. Thank you very much. It's really helpful.

Thank you, Mr. Chair. Uh, Representative Roberts. Um, just curious, does this, does this bill touch Midas

Mida? No. And in fact, that's my next bill representative. This is the housing bill, not economic development. Thank You.

Thank you, Mr. Chair. Can we go back to the, just the a hundred million? Yeah. With that shift of those dollars, is there any negative consequence of moving that, are there any projects delayed or cut or stopped because of shifting that a hundred million?

Yeah, that, that is the smart question, so I'm glad you asked it. That was always my concern. Anytime you take public, you take the float of these funds, um, you could, if you take too much potentially delay projects that have been programmed, uh, at Udo, we have worked hard, I don't know if I have friends here from Udo, but we, we've, we have gotten comfortable that this number, the a hundred million is a number that, that, uh, can work within the existing programming.

Okay. Uh,

Let me put it this way, if it, if the number was larger, then yeah, you, you would, you would be pushing back already programmed projects. Um, you know, that that was sort of one of the potential impacts of that original 300 million a couple years ago. This a hundred million, though, I feel really good about, have worked closely with folks at UDOT to make sure that that's a number that felt like it wouldn't have an impact on already planned projects.

Okay. Another question I have is, is there a mechanism, or have you thought through a potential clawback if housing units aren't built within the promised timelines?

Yes. I mean, that is certainly like a risk of potential deals and what you hope happens, and I would really invite this committee to have a lot of oversight in the interim over this process, really to see how it's playing out. But you would hope that ultimately in the deal structure, that, you know, if, if the city let, let, lemme actually, lemme put it this way, the city's gonna pay back the loans with impact fees. You gotta have the development. And so in some ways, the cities will act as the, the, uh, the gatekeeper of that because it would be against their interest to go take the money from the state, put the money in the ground, have the payback mechanism that's dependent on the development actually happening, and then have it not happen. And so there's some risk there if you structure it wrong, no question. Um, but I think there's enough checkpoints and, you know, it'll be staffed at goo. Um, you know, hopefully, hopefully we can prevent that and have good deal structures that work for, for cities. And

So, so I guess my follow up question to to your answer is, what if the repayment source underperforms from the city, Um, in terms of what, like recourse back to the state? So I was thinking, so my first question was clawback, you talked about, well, there's payments in place. What if that city's repayment source underperforms and they're not able to pay this, the state back? Is there any type of recourse in place or any thought to that?

Yeah, you're asking all the great questions. Um, yes. I mean, there has been thought to that ul ultimately the state would be in a position to go two routes, if that was to be the case. Well, lemme first say this, the nature of the cash flows that are gonna be securing these loans to pay them back is that they are very safe, reliable cash flows depending on, you know, the way you structure it, whether it be some kind of an additional assessment or some kind of impact fee, they're, they're very reliable. Now, that doesn't mean that there's no scenario in which, you know, the payback isn't there. If it's not there, the state would've two options. One, it would just forgive that portion of the loan and it would just be, you know, basically cash out from the state. And you could think of it as a, you know, as money, uh, as a loss to the state, so to speak, on the, and then the other option is that the state could work with the city to extend, to find some other payback mechanism. I would imagine that's what would happen. We've worked closely with LFA around the risks to the state and, and if, if LFA is anything, it's, they're very conservative. We've allocated, if you see in the, in the fiscal note, basically a, a volatility risk, so that if we were to have a 30% drop in the fund, let's say 30% of the money we just lost, they were bad. They were, you know, they, they ultimately didn't get paid back. There's a set aside here in the fiscal note to cover that. And it's actually using the same monies that were set aside from that original 300 million p tiff. So it's, it's, it's just repurposing that to set aside in case there is a loss. Okay. Does that, does that help?

Yes. I have one more question, if that's okay, Mr. Chair. Um, I want to talk about this board. Board is created, they oversee these projects. How are they grading? Or is there some type of transparency of how they're grading these projects to avoid favoritism? Because there's gonna be a lot of need and ask for this a hundred million, and I know this is just the beginning, but I know who my favorites are and I would like that money to go to my part of the state. And so how do we ensure that it's going? And I guess, let me throw in my, my, my thought into maybe your answer is I think it should go to some of the high growth cities that have already dealt with the growth for many, many years. And you talk about this infrastructure being behind, uh, my part of the state that I represent is at least 10 years behind. And so I, I would like to just know how this is gonna be graded and how this is gonna be evaluated. Because if I'm going to support something like this, I want to know, I mean, everyone wants their part of the state to be, to receive this funding, but want to know that there is some type of thought into high growth cities that have dealt with the impact of, of the growth that our state has seen.

Yeah. Uh, I, I appreciate the conversation. I actually really do, it's a, another really good question. I, what the bill tries to do is to leave rulemaking available to the agency, which is gonna be goo. And if that housing bill, the reorg bill passes, you know, that division will probably have some say in it. And so it, it does give general just some latitude. It, the bill specifically says, what we want is this kind of housing product, single family detached, um, uh, owner occupied housing, right? That it says that's what we want to try to get. Now that's pretty broad, right? And it leaves the rest of it up to rulemaking and there's some latitude. And what I would say is we can, we can tighten, I'm, I, I'd be open to, you know, input there if you want to tighten it up in statute, or what I'd propose is to just say, really encourage this committee if this bill does pass to, to like really be engaged in the process over the interim with that housing division. Um, you know, we could try to prescribe every little bit and piece in the statute, but I think the risk there is that it can sometimes then be hard to use or we can try to allow some more flexibility and creativity. The risk there is that you might have too much latitude. And so what I'm really hoping for is that, you know, this committee can make maybe some recommendations on how we do that. I, I take your point, and this has been a big part of my argument, you know, this is totally separate from this bill, but we have what's called the modern income housing plan. And in that, that, uh, housing policy, it basically lays out a bunch of things that cities' gotta go do in order to, you know, be qualified for TIFF money. And, and it doesn't oftentimes speak to the high growth areas that are dealing most with the growth. Let's call like the northwest quadrant of Utah County or Southwest Salt Lake County. Um, so what I would, what I should say is like, I would hope that that becomes like an important consideration here. I, but I guess what I'd also say too, is just like in humility, there's probably going to just be, there's just, there's just automatic trade-offs when you're trying to design a policy like this. I could go, we could go try to over legislate it and say, 10% has to go here and 15% has to go here, but what I worry then is the money that this just doesn't get out. So anyways, I'm, I'm rambling a bit, but it's an important question. And, you know, if you got ideas, I'm, I'm happy to consider amendments or subs.

Thank you, Mr. Chair. Thank you representative, uh,

Thank you, Mr. Chair. Um, thanks for bringing this forward. I find it very interesting. What's the, uh, finger on the scale about single family detached about, could you articulate a little more? I, I, sometimes, sometimes what I hear is condo or townhouse is a better starter home option. Let people build some equity, you know, isn't that a bigger leap? Can you speak to that? Why the preference over a condo or townhouse?

Yeah, it's another good question. Um, so first of all, the bill doesn't exclude the ability to use this for, let's call it more infill. And there's been a healthy conversation around how this could be used to support infill projects. And what do I mean by infill? So take, take for example, we have what are called station area plans. It's an important part of the housing policy that the legislatures passed over the last several years. It basically said to cities, Hey, we want you to plan within a half mile radius of all transit stops, more housing density. Now we, you know, I'm not here to litigate if that was the right policy or not. It's in statute, and they did that. Cities have gone around, gone through that process and have, uh, planned for something like a hundred thousand units within their stationary plans. So I'm thinking of your district, um, representative, you know, Millcreek and those areas. You'll see stationary plans planned around transit, and a lot of that is going to be more condo product or town hall product, or some, maybe some, even some apartment product. But the idea was, Hey, we wanna put this housing around transit, you know, and hopefully the people will use transit more, get cars off the road, be better for clean air and things like that within the bill. Um, you, you wouldn't be precluded. In fact, if you look at the uses, I've tried to expand some of the uses so that they could support some of that infill infrastructure to support those stationary plans. So it could be something like power transmission lines. I know of a city, you know, that, that has a stationary plan, and there's developers that want to go build there, but, um, you know, they, they don't have some of this big capacity infrastructure in place. Like this could be something they could use in support of the stationary plan. Now, to your question, which is, you know, why the preference for that? I, I think if you just talk to Utahans, um, at least you know, the feedback I've received trying to work in this space is that the number one issue on the minds of voters is housing affordability. You can look at the Deseret news poll, Sutherland Institute poll, y two analytics poll, noble Predictive Insight Poll, Utah Foundation, every single one, housing's number one. But if you peel back and you look, you'll see a lot of those same residents don't want, you know, the state to come in with heavy handed density mandates and things like that. So I think we're trying to be responsive in the bill by emphasizing the single family detached in the, the rubric of the loan availability to that sentiment in the public. With that being said, nothing precludes in the bill, nothing precludes, uh, the use of this money to support those stationary plans.

Yeah. Which are those more transit oriented developments. Yes. But I, I think even in a faster growing area, uh, you might have even a city that wanted, uh, to have a density, you know, an area with greater density, even if it wasn't dependent on transit or, um, you know, I take it we're speaking to the second sub.

Right. You probably corrected that and I missed it.

Thank you. Um, and then, uh, the infrastructure facility definition is, it specifies a number of things starting on line 91, but it's not exclusive. It says including, right. So could that be, I wonder if you're open to being more clear about what you mean, and, and this goes into my second question, in other words, being more exclusive or not, just to have an including but meaning and limited to the following, and then specify what you want. I wonder, 'cause I, I don't know if we're building roads with this money or what, you know, and maybe you want roads, I don't know what the cities need. And this is really goes to my second question is, or my next question, which is, uh, what, what tells you that this is the pinch point in freeing up housing, uh, affordability and accessibility? Like, why is this, why is this the pinch point? How have you figured, what's the economics of that and not some, you know, just giving first time home buyers a down payment or something with the same amount of money. Like, why is this, why do you feel like, isn't the market doing this already? Aren't we, aren't cities able to borrow this money when they need to? Yeah, it's, could you speak to that a little bit?

I can, yeah. So, and then That, to me, that segues into what you're buying with the Yes. What you wanna buy with the loan proceeds. Yeah, it's a, it's a, a good question. So, um, oftentimes the capacity infrastructure, and it could be regional roads, it could be regional, um, we infrastructure, like, you know, what's laid out in the bill, but oftentimes that infrastructure serves multiple subdivisions, multiple housing divisions. And you have a situation where you just, you can't get the coordination amongst the private actors. So let's say I've got this big master planned area, and there's a bunch of different landowners and they've got their entitlements from the city. Um, they can't all the time coordinate and make the math work to build this expensive capacity infrastructure. You know, one of these water tanks could be $25 million. And if you're just one slice of that larger, you know, um, call it greenfield development area, the economics just don't work for you to go pay for everybody else's system upgrades. And you just can't make the math work for, if you're a private developer. The city at the same time has, is strapped and, you know, has limited capacity with, uh, their ability to finance these things. And so that's the, the creative, or that's ultimately the solution of the bill is to say like, well, can the state step in and facilitate that kind of transaction or process to unlock that housing that's there, that's planned for, but for the, the need for the big capacity structure.

Okay. Thank you. And, and oh, sorry, what, could you circle back then with that background? What about the roads? I mean, is it your intention that this could be used for roads then For regionally significant roads?

Yeah, you could use it for that. It's not meant to be subdivision level infrastructure. And so what I mean by that is like sewer or, um, you know, curb and gutter, it's not meant to, to help this little subdivision with 50 homes put in their sidewalks, right? It's meant to say, we got 2000 planned units over here and there's 20 different landowners or 10 different property owners. Um, but we can't serve that because we don't have, we're lacking the capacity infrastructure, whether it be sewer or water or road. And, you know, you don't have the easy financing mechanism on the city side. And, you know, the private, the, the profit motive isn't there for the private community. So state can come in and facilitate, excuse me, facilitate that transaction.

Um, representative, uh, has not seen this yet. This just came to me, um, the first, uh, $70 million on the grant side of this, um, bill that works expanding to 140 million. We have currently, uh, we just received $71 million of applications for it, including, uh, over 50 million for Harriman representatives. So, um, let me just address really quickly, uh, one of the concerns that came up. Uh, please State your name and, Oh, Steve Waldrep, uh, sorry. You called me out. Uh, Steve Walder. I represent the governor's office. Um, and I've been working on this with good representative here, um, on the, uh, $18 million. Um, the point of the Mountain Authority has been working with Draper City, um, to create a pilot area of 50 acres where they will do, uh, for sale homes, um, which was not one of the original thoughts in that space. And we pushed on them to say, Hey, we need some for sale units in our communities, and not just apartments, not just for rent. And so that $18 million will create the infrastructure to allow for that 50 acres to be then, um, uh, disposed of for single family, um, homes for sale for, uh, citizens of the state of Utah. So I think that's an important, um, point there. And then, um, just speaking to the need, uh, again, this came to me about 10 minutes ago where we have $71 million of applications for the first $70 million, uh, of this. So I, I do believe there's appetite to address that concern. I think, uh, as we met with cities, they've expressed that appetite. Thank you.

Good afternoon representatives, uh, mayor Palmer today representing Herriman as well as second vice President of the league today. We just first want to thank Representative Roberts for his collaboration on this. He came to our a meeting a few weeks ago and spoke to the partnership in this, um, in Harriman, for example. As, as Steve just mentioned, um, we are, we are now have 13,000 entitled units, and the majority of those are locked up due to infrastructure. As a matter of fact, we just had to issue a moratorium on housing units in our city because we are out of water capacity. We are just out, and we do not have the funding to add more water infrastructure as far as tanks right now. So that's where this bill, this is what we've been asking for, is this support from the state, this kind of collaboration to unlock those units. This will absolutely unlock thousands of units in our community. Another example is Harrisville, where they have seven, a population of only 7,000 right now, and they have 1200 entitled units that are also locked up due to some sort of infrastructure shortcoming. So in, in short, there's gonna be a demand from the cities. There's a need where Juab, we bonded to capacity. We just can't ever afford to unlock all these units. And this is the type of collaboration that we've been seeking on the city side. So we appreciate the representative and his, um, bill and his support on this. So ask you to, I encourage you to move this bid bill outta committee.

Thank you, Mr. Chair. Mike Oster, Millard speaking on behalf of the Utah Association of Realtors and also the Property Rights Coalition. Uh, we're in huge support of this bill. I, I think it has the potential of maybe being the single largest impact bill for housing that the legislature will deal with this year. We're that optimistic about it. And I'd like to just address a couple of the points that came up in the, in the questions. Representative Cutler, to your question. We've spent hours brainstorming this and, and we've, what we said is in trying to strike the balance between creating enough detail, enough framework, but also leave room for creativity and flexibility. I think one of the mistakes we've made in the past, and I say this 'cause I've been at the table working with my friends from the cities on all of these housing incentive programs that we've worked really hard to create. I think we've been too prescriptive in many of them. I think we've provided too much detail and it's taken away, it's made them unworkable in many regards. So we're just trying to keep that balance open here and then trust Steve Waler and his shop that they can, they can get it right in the details. And then, uh, I'll say to Representative Owens question about this being a pinch point from a developer's perspective, we see this all over the place representative where we have, we have areas that are zoned for the exact type of housing that we're trying to create, which is for sale owner occupied housing. And we can't do it. We can't move forward. 'cause it doesn't make sense for the developer to invest $9 million in a new sewer lift station and the city just simply doesn't have the funds and this will help resolve that. And so I think the final point that I'll just make is the beauty of investing in infrastructure is not only does it unlock the potential for new growth, it also benefits all the users of those infrastructure systems, which is a win-win for all of the citizens in that growth area. So with that, I'd like to ask for your support. Thank you for your time.

Chair. Would it be acceptable to ask, uh, Mr. Waldrep a question? Uh, yeah, I just, I would you mind coming up, Steve? And my question is, I

Wouldn't mind, but I'll Do it.

Could you, I I, maybe I missed it, but are you, you, you said you've worked with a sponsor, I take it you support this legislation?

Absolutely, yeah. A hundred percent support. I think we've just, you know, again, um, literally 10 minutes ago I got the first $70 million of requests, uh, including Herriman's request that you just heard about from their mayor. So,

Well, I I did hear you say that. I don't mean to be,

Uh, yeah, no, no support. I ask them questions, but some of 'em are dumber than others.

No, but I, I take, I understand there's demand. I guess I was looking for, do you feel, maybe, just to put a finer point on my question, do you feel like this is the lowest hanging fruit in terms of, this is a pinch point. It's obvious and I I appreciate the sponsor bringing it forward. Um, the, do you feel like this is the lowest hanging pinch point where the state dollars are gonna do the most good in terms of freeing up, you know, starter housing and I mean, maybe you could just round out your response a little bit more.

Yes, thank you, representative. I, I do think, so. I, as we've met with cities, um, and, and developers both, uh, and asked about why are we not doing more and why are we not creating more to meet what is clearly a market demand? Um, and, and, uh, this has risen to the top as the issue that has, um, a again, you know, we have hundreds of thousands and you just heard about 12,000 in that city and 1200 in another city where we have units that are ready to be built, but we're lacking system-wide infrastructure. And that system-wide infrastructure, we don't, we just haven't ever had a great mechanism for helping with regional infrastructure projects. And we've relied on a cobbling together of, of different things. And, um, it's put us in the position that we're in today where we have deficits in those infrastructure projects. And, and so I think that is, uh, very clearly something that has come to the top of the list as this is something that is desperately needed across the state.

Okay. Thank you. I think I, I blew up my opportunity to make a motion, didn't I?

I actually would like to just make a comment first.

I will not reserve. I'll Just make a comment. Okay. Perfect.

Back in the real world, we used to be able to accomplish this just from the free market. And it seems like the more that the government gets involved, the higher the pricing in the housing in the state gets. And I think, I think, uh, to some degree this represents more government involvement, which drives up more housing. And I, I understand what you're saying is, is, uh, it is freeing up some of this land so that the development can, can happen, but, uh, you know, it used to be that, that the developers would build that into the cost, and now we're pushing the extra costs. At least it seems like we're pushing the extra cost onto the taxpayers rather than the developers. So, just a thought. Thanks.

Mr. Chair, I'd like to move that we approve that we adopt substitute two.

I'd like to further, uh, make a motion that we favorably recommend HP 4 92 transportation infrastructure and housing amendments to the full house.

Thank you, Mr. Chair. Um, I would just like to applaud the, the sponsor on this work. This is super complex and unlike AI issues that I work on, everyone is an expert on housing. Um, and so you can imagine the amount of opinions here. On a previous meeting, I talked about the three kind of legged stool as it relates to housing. You have developers, you have the state, you have the cities, and how we tend to bleed into each other's responsibilities. Um, and as I've mentioned before, I think the state's job is to invest in infrastructure. And so, although I don't think it's a perfect bill, I think it's, it's a step in the right direction. And I think we can get to a better, a better bill. I think this is what it actually looks like when all three pegs of the store working together. You still, you had developers, you had the league, and you have the state here saying that this is the right solution. And I think that's, that's a great step in the right direction. Now, we won't always agree, but I think when we're able to all come to the table and focus on our responsibilities and our roles and our duties when it relates to housing, I think we're, we're moving in the right direction. And so I will be voting in support and appreciate the sponsor's work on this.

No, I, I appreciate it. Let me just, uh, rep, uh, comment maybe on, or respond to one of one comment from Representative Shelley, which I think is a fair comment. And, and, uh, I think it's a fair argument. What I'd, what I'd say is there's two sides of this. There's the demand side and then there's the supply side. And that's what creates price. And what I think this will do is generate more supply. And, and if you ask the question around, well, what is the role of government in housing? I don't think it's putting money on the demand side. Now we've done that. And when I say we, I mean this body has done, have had policies that put money on the demand side. And when you put money on the demand side, what happens to price? It goes up. You see this with a lot of things that the government touches, right? Like higher education. Turns out when you give people loans to pay for tuition, what happens to tuition? It goes up. Put that aside, looking at the supply. This is about supply. What can the state do? And I think by investing in infrastructure that the private sector isn't going to do, 'cause they're not gonna always do private infrastructure. That's why we have, you know, interstate 15, you can unlock the supply side. And I think that, you know, the supply side oriented, uh, nature of this, I think is good economics and, and good policy. But I, I take your point, and I think it's something we need to always look at all housing policy through that lens. So anyways, long-winded way of saying thank you.

I'll waive. Okay. The motion

Well, I'm just getting started. All

Now this is a bill we cannot miss. That is bright. You also can't miss it 'cause it's just really good policy. Oh wow. I opened up the door for that, didn't I? Ooh, Uh oh. Uh oh. I invited the, yeah. Hey,

Questions? Yeah, I'm in trouble. I should have been more humble. Um, let me just set the stage briefly. So we've been trying to tackle housing for years. Increasingly there's a chasm between where median wages are today and where median home prices are. The traditional fight up here, as many of you know, as we fight over land use and what the state role is in land use and what the local government role is in land use, we've tried to think differently about the housing policy, this go this time around. And if you listen to the league and to a private industry, they'll tell you we have 190,000 entitled units throughout the state. And those are probably in various forms of development. They're not all permit ready. But regardless, there's a su a a substantial amount of units that cities have planned for that aren't being built. And part of the reason they're not being built is certainly because of the macroeconomic environment with where interest rates are. But the other part is there's a lack of regional significant capacity infrastructure. And when I say that, think a big regional road or think a water treatment facility or a sewer lift station or a Big Water transmission line. And so what we've tried to do in this bill is to think about how can this state facilitate infrastructure investment to unlock planned housing. And what the bill does is it creates two funds. One is, um, the highway, the first class fund, county of the first class highway fund, um, quarter's, local option sales tax money. And then the other one is a revolving loan facility where cities can come and make applications for capacity infrastructure to support planned housing. And the source of that money comes from. Um, some legislation we passed a few years ago, uh, came from the P tiff float or the, um, out of the tiff. And it was used to invest alongside bank money to extend sub interest rate loans to private developers. We're pulling money from that and putting it here. We think it'll be a better use here to go directly into the dirt. Into the dirt, excuse me, to support the housing. So, um, I think there's two things this will accomplish. Number one, it will unlock housing supply that's planned for. And number two, it'll help us get ahead of growth instead of always being behind it. And with that, I'm open to all the tough questions.

Sorry I stepped out for just a second. I missed some of your presentation. So apologize. If I'm gonna ask something you've covered, who's gonna administrate or administer this fund? Is it going to the housing or is it under still under udot?

It, the, the funding piece comes from the public float from the UD or udot. On the tiff. The administration of it happens through a board that's created. There'll be a senate pick a house, pick goo udot, there'll be a board that will receive the applications, but they're city driven. So the city has to come and say, we want this infrastructure. Here's our application for the loan, here's how we plan to pay it back. And then the funding comes through the udot source. Um, the decision making happens within that board at goo. Does that answer your question? Yes.

Now that just brings one more you, is there a match? Didn't, aren't you requiring the entity to come up with some of the money for this?

It's tried to keep it purpose, uh, purposefully flexible because if we, the money has to have a payback mechanism. So usually what what we anticipate will happen is it will be paid back via impact fees. So those are developer paid impact fees. Alright. Um, to pay the loans back, let's say over the course of seven years or 10 years. Um,

Okay. Good enough. Thank you.

Thank you Mr. Chair. So with the, the tiff, the, uh, 70 million is it that's going from the TIFF into this new, um, housing infrastructure grants fund. Is that, would, would you explain that a little bit more?

Yeah, so think of it, there's, I would call 'em three buckets of money. There's the revolving loan facility that's coming from the old p tiff money that we had, we had allocated as part of that old program a few years ago that took the flow, the cash flow from the tiff and used it to be, uh, uh, co-mingled with bank money to go in, uh, lend to directly to private developers at sub-market interest rates. We're taking a hundred million from that. And instead of using it for that program, we're saying we're gonna use it for this. We, we think it's a better use. So there's that bucket of money. And then there's the second bucket, which is the quarters, the local option sales tax in Salt Lake County. So that money can only be used in Salt Lake County. And last year we voted as a, uh, the legislature voted to, um, to authorize up to 70 million of bonding capacity, 70 million. And this extends that to 140 million and it pushes it through this same process to be allocated. That money can only go through, can only go into Salt Lake County. It's Salt Lake County money. Um, does that answer the question?

It does, thank you. But I have another one now.

Um, so the, with this $18 million one time, we'll go as a loan to the point of the mountain. Um,

And then one last, um, comment maybe I, I'm not sure how you do any of this. If we, uh, get rid of, um, goo and make it goed, you're gonna have to fix that again.

Yeah, I think yeah, we absolutely need to rename goo to Goed. Um, it'll make it much clearer, but

Education, is that what you're saying?

Yes. Isn't that funny?

is. No, it has not to my understanding. So

I think I'll have some friends I'm sure who will come up who can publicly speak the demand for the 70 million, it's oversubscribed. So we've had a, a bunch of cities in Salt Lake County who've made application for the money. We have been slow on our part getting the application process in place and getting that money out the door. But the demand has been very strong. And so it felt like there was a need to expand, to meet, um, some of that capacity infrastructure supporting Happen. The way I'm saying this is, it's a grant, it's not a loan for the Salt Lake County money. And we are alleviating developers of some of their duties to go through and put in this infrastructure. You could look at it that way.

I, what, how I would look at it is we will be requiring in rule, uh, for developers to build missing middle, middle missing housing, housing that we're not seeing, which is that if you look in the bill, we directed them to find that single family detached, owner occupied housing. So think really small lots. Um, oftentimes on these projects, these are large master plan communities. You need some kind of water treatment facility or a Big Water tank that will serve all the different subdivisions of this, let's say this big greenfield development. And, um, you know, it doesn't, the math doesn't work for a private developer to bring the housing online and the cities, of course are strapped with their budgets. And it, you know, this is where the state can come in and facilitate that transaction. And if you, what I would say is, if you think about what the role of the state government ought to be in housing policy, it's my opinion that it should be to facilitate the infrastructure. I think that's within the bounds of what, you know, the role of the proper role of government, I think in this situation or in the housing policy space.

That's the way I'm looking at it. Okay.

Thank you Mr. Chairman, members of the committee. Cameron Dale, executive director of the utility of cities and towns. Uh, I'm here to express this. Our strong support for this bill. This bill has been actually several years in the making. I wanna thank Representative Roberts who actually came to the leak convention a few months ago to talk about partnership in infrastructure funding and how the state, local governments and the private sector can work together to unlock housing units that are planned for but currently cannot be built because of infrastructure shortcomings. And I'll just give you a couple of examples. In Southwest Salt Lake County and Northern Utah County and those eight cities alone, there are about 109,000 housing units that cities have planned for, uh, that they have approved the zoning or the development agreement for. But 88% of them are stuck due to different infrastructure restraints. So in one particular city, uh, they need a large scale water tank in order to unlock those housing units. This is an opportunity for the state to provide an option. I'm not saying it'll necessarily go to this project, but provide that, uh, potential funding stream to fill that gap and unlock those housing units, but not just any housing units. Uh, but with a prioritization around owner occupied housing units and housing units that can become first time homes for, uh, Utah home buyers. And that can be affordable for a period of time. And so as we work through those, that those pieces of criteria in state rule, that is the outcome that we're trying to achieve here. And so we have the infrastructure piece or the, the loan piece of the state dollars and then the grant piece on the county dollars. But both of them are trying to achieve that outcome of partnership between private sector, local government and the state and funding infrastructure and making sure that the benefit of funding that infrastructure flows to that new home buyer. Thank you, Mr. Chairman and thank you. Next representative.

To speak. Thank you Mr. Chair. And, uh, now you've got me in trouble with the sponsor, so I really appreciate that for still in his well there people Raise hand. So if there's somebody else wanted to speak, come, Um, seat Steve Wal, uh, uh, representing the governor's office, uh, senior Advisor for housing Policy for Governor, uh, Cox. Um, I want to address just a couple of the questions that came up in committee and, and provide a little bit of, of background and clarification on those. And so I'm deeply involved in, in this stuff. Uh, the first question, and I know good Senator Vickers gone, but on the $18 million loan, uh, we've been working with, uh, point of the Mountain Authority for several years now to try to get them to move off of, uh, lease only and, um, and rental only housing. They've agreed to do a 50 acre, uh, owner occupied, um, dedicated for ownership housing, um, mixed income development. And this would provide a three, they're estimated about a three year loan for that. So that money would actually flow back into, uh, the loan fund within two to three years, uh, as they do that development. So we think that's a really good use of that lending money on that piece. Uh, on the 70 million quarters money, uh, we have applications already in excess of 70 million for the first 70 million. Um, and the, the tie that is in last year's bill we're holding to that, which is that each, um, each unit that is approved is approved for essentially $20,000 of grant funding. So, um, there's 2,500 units of, uh, affordable housing that will be built as a result of, uh, a $50 million loan, which is one of the applications that we have. We're working through that application right now. We anticipate that money to go out very shortly. Um, and, uh, and, and we believe that application is in order and, and looks like it'll go through. There are a couple other applications, uh, that would provide other types of housing, including one for Salt Lake Cities Housing Authority to do Section eight home ownership. Uh, it, it's, it's a unique program where you have section eight housing that actually leads to home ownership, which is very, very unique. It's unique. Yeah. Um, so I, I appreciate the, uh, the, the thought of the committee and just want to answer a couple of those questions and express our support for this bill. Um, we anticipate, uh, that this money will be well spent and, and, uh, provide benefit to Utahans. Thank you.

Thank you Mr. Chair. I'd to send house bill 4 92 third. So about with favorable recommendation. Okay. Do we have discussion to that motion? Um, I do not see any, um, I did share some comments which I think were val valid and, uh, have, which have been shared with me by constituents.

Just make one brief point 'cause I think what you said Senator, uh, is, is fair. We've tried to make this a it's public infrastructure and it, just to be clear, it's not subdivision level infrastructure. So it's not curb and gutter, it's not meant to be a subsidy for a particular builder with 50 lots. It's meant to be regionally significant capacity infrastructure that serves a whole area. And I think it will unlock more housing and hopefully slow down that rate of growth in housing, uh, to make it more affordable going forward. So thank you.

Thank you, Mr. Chair. Thank you. Senator Rebe. Motion To adjourn. All in

Colleague this as 2, 2, 2 minor things. One, it, it, uh, requires that this committee goes back and reports to the economic development interim committee and the political subdivisions interim committee. And then it makes some, it has some clarity around uses of the proceeds in the bill.

Colleagues, what should the role of state government be in the housing market? That's the fundamental question that we oftentimes ask ourselves. Since 1985, the median home price in Utah has grown on average year over year at 5.2%. Meanwhile, median wage growth has only been 3.2%. That 2% gap year over year for 40 years. Compounding creates a massive chasm for where medium incomes are today and where median home prices are. We know it's a problem. Middle class Utahans increasingly are unable to afford a starter home in our state. Now, we've worked hard over the last year. We've worked with mayors and city council people and city managers and private industry to try to think about the housing problem differently. To come at it from a different perspective. If you look at the state of Utah, there are 190,000 entitled units throughout our state. Many of them aren't being built. And so the question you have to ask yourself is why why aren't those units being built? Well, certainly part of it is the macroeconomic environment. We have high interest rates. The market has cooled down a bit. But if you talk to city managers and mayors and the private industry and city council people, you'll hear that at least part of the reason why those planned units, the units that cities have said they want aren't being built, is because of a lack of capacity infrastructure. What do I mean by that? I mean, Big Water transmission lines. I mean big sewer lift stations, water treatment facilities, water tanks, regional roads. And so what this bill does is it tries to get away from the traditional fight around preemption and move towards partnership. A partnership with private industry, a partnership with, um, local government, and via the state, it sets up a hundred million dollars revolving loan facility that gets paid back. Cities come, they ask for the money, they make an application to support planned housing, and then it gets paid back primarily via developer paid impact fees. The idea is if we can strategically invest in capacity infrastructure, we can get ahead of growth rather than being behind it all the time. And we can support planned housing, housing that's already been planned by our local governments. Now, I wanna say this to close colleagues, anytime you deal in housing policy, you have to have a sense of humility because there is no silver bullet, there is no magical solution to the housing problem. But I do think that this bill takes a step forward, even if it's just a small step in addressing the problem. And with that, I urge your support and I'm open to questions.

Thank you, Mr. Speaker. I wanna rise in support of this bill. The sponsor has done, uh, great work in, in putting together a plan that can actually help municipalities and local, uh, uh, local areas build more infrastructure to support housing and especially starter homes. Uh, there are the loans that will be available through this program can make a, a big difference in finalizing the infrastructure that often holds up, uh, some of the new builds. So I, I stand in support and appreciate the improvements that he's made to the bill.

Thank you, Mr. Speaker Pro Tim, um, I rise in support of this bill as well. I think it's a good solution to a lot of problems, but I have one question. If, uh, would the sponsor yield Mr. Speaker,

Uh, maybe the good sponsor could tell me. I, it, it says we're gonna take another bunch of money from the Transportation infrastructure fund and then later on down in the fiscal note it says we're gonna bring some back, uh, with the issuance of bonds. I guess my question is, Mr. Speaker ProAm is we got this all figured out so we're not breaking the transportation fund.

Yeah, let me, let me address that question where the money is coming from. So a few years ago, uh, this body new law was signed to create a fund using the public float, the cash in the transportation infrastructure fund to basically extend credit to private developers. And the idea was you would take this money, you would commingle it with bank money, and you would lower the interest rate. Whether or not that was good policy or or bad policy, my bill doesn't have anything to do with it, but what it says is we're gonna repurpose some of that money because it wasn't being used, it wasn't very effective. And so that was a $300 million slug of capital. This is just taking a hundred million dollars away from repurposing that money, um, from the transportation Infrastructure Investment Fund float.

Thank you Mr. Speaker Pro. Tim, I think it's a, it's a good bill. Uh, we've, we've kind of threw the shot put around a little bit and maybe hit our toe in the past and maybe this would be a good solution to a lot of problems. So, uh, I would urge your support. Thank you.

Thank you Mr. Speaker Pro tem with the sponsor yield to a question. The sponsor yield? Yes, go ahead.

Thank you. Um, in lines 2 71 to 2 75, there is a specified recipient of a, um, sorry, infrastructure loan. I'm just wondering what the purpose is for specifying one particular entity in code for a loan would be, rather than having them go through a process to receive those loans.

That's a very fair question. I'm glad you read it closely. So the state, so as part of the loan, the a hundred million dollars, there will be a loan extended to the point of the Mountain Development Authority. The way that that works is it's state owned land and we entered into a development agreement years ago with private developers and the state, um, to put in the backbone infrastructure of that project. Again, not here to litigate if that was good policy or bad policy, but we're obligated to put in some infrastructure at that site. Uh, they are planning to sell 50 acres with owner occupied single family detached product. And this was a way to kill two birds with one stone to provide the infrastructure money that the state is obligated to provide and to have it be repaid by the cell of that 50 acres at the point of the mountain that has that, that will support housing. And so that's why we put it in.

May I ask a follow up question? Mr. Speaker, who owns the 50 acre? I mean, will you yield, will the, will the sponsor yield to an additional question? I will Go ahead. Who owns the 50, I think you said 50 acres of land. Who currently owns that land? The people of Utah, the state. Not a particular city or county. It's within Draper City limits, but no, it's state owned land. We own the land. Thank you. Thank you.

Thank you Mr. Speaker Pro temp. I rise in support of this bill. The high demand for homes in the state and the low supply of homes in the state is one of the reasons of the high cost of the homes in the state. This particular bill represents a collaborative partnership between local cities, counties, and private developers that have collaboratively worked on this concept for several years, and it's now before us to be able to help unlock housing potential development areas that are only being prevented right now because of the lack of infrastructure. So I would encourage everyone's support of this bill and compliment the representative for his good work of the collaborative work with the cities, counties, and the state to still maintain local decision authority as this moves forward. Thank you, Mr. Speaker Pro temp.

Thank you, Mr. Speaker ProAm. Will the sponsor yield to a question? Yes. Will The sponsor yield? Go ahead.

Thank you. So in the presentation sponsor discussed the issue of, um, entitled pieces of property, and I wondered, um, the degree to which this, uh, statutory change assists municipalities, ESP cities and municipalities in working more collaboratively and more productively on, um, on some sometimes when properties are over entitled in their, within their city limits.

Help help me understand the question. Okay. Maybe reframe it if you wouldn't mind.

Okay, well I'll, I'll I'll just be a little more blunt if that's okay. Um, my understanding is that there are some cities that have a lot of pieces of property that are entitled by developers and that, but are not being built out and the cities have limited ability to compel the actual development of those projects. I wondered if this gives the cities an opportunity to make sure that that process is more collaborative and productive.

Yes, that's a, that's a good question. It does. I mean, the idea is that if, let's say a city entitled, I'll give you an example. There's, there's a major city here in Salt Lake County that has 2000 entitled units, um, in open space. They have $50 million worth of water infrastructure that needs to go in. Um, this bill would support that kind of project. Now it's gonna be important for cities and, you know, you've gotta trust the city to do the right work here, but to make sure that ultimately there's gonna be a payback mechanism, which is usually from the impact fees, developer paid impact fees. Um, and so in order, you know, in order for the payback to happen, you've gotta actually have the development. And so I think what you will see is a give and take and a push and pull with, uh, the cities and the private developer as they try to access the money. Hopefully that responds to your question.

Uh, thank you Mr. Speaker pro tem, that, um, that's great news and I'm really happy for the clarification. I also rise in strong support of this legislation that's long overdue and I also applaud the sponsor for threading a very careful needle needle on a critical issue in our state.

Pro Tem. I too wanna rise in strong support of the incredible work that the good sponsor from Draper has done on this. Um, I represent an area that has about 28,000 entitled units, but infrastructure has been the biggest piece my community has been asking me for years. Um, and talking about issues that they have related to not just roads, as you all know, I have road issues, but also water infrastructure, sewer infrastructure, um, everything that comes with growth and with being a partner in solving the housing crisis. And this really will create a mechanism that opens that up. Infrastructure's the most expensive piece of development and it's also the biggest pain point for residents in these areas. And I think the sponsor's done an incredible job. Thank you.

Thank you. Will this sponsor yield to a series of questions? Will The sponsor yield to a series of questions? I will Go ahead. Thank you.

Hey, I was just wondering, Mr. Speaker, on line 1 0 6, it talks about a special district and then it's tying back to code and then when I went on it, it tied back to another code. So I'm just wondering if I could get a little bit more clarification on what exactly this special district is.

Yeah, I, I think I know where the concern's coming from. To be very clear, this is not a pi, it's not an economic development tool. There is no special economic zone being created. Special service districts are oftentimes water districts. And so if you're gonna be delivering water infrastructure to support housing, uh, you want to have them in code because oftentimes that's what's going to facilitate that kind of infrastructure. So that's why they're included.

Thank you, Mr. Speaker. Um, and then also I, um, I'm, I'm wondering about the affordable housing aspect of it with low and moderate income. Do we have a definition of what that would actually be?

So throughout code, it's actually something that we need to clean up, not in this bill, but in some, some future bill, but there's a bunch of different definitions of what moderate income housing is. It can be 80% of a MI or 120% of a MI. Um, this bill tries to be flexible. It, it says we want this to be used for single family detached owner occupied homes because that is the product that we are so desperately in need of in the state. And so it directs the board to prioritize that and ultimately put rule in place in conjunction with the economic development interim committee and political subdivisions committee. But it doesn't give us specific definition like 80% of a MI. And the, the reason why is because oftentimes when government tries to do something, it creates a box that's so inflexible and so narrow that it becomes really difficult for the people trying to use that service to fit into that box. So we tried to keep the box fairly flexible so that cities could come with creative solutions.

Thank you Mr. Speaker. So, um, as we're talking about those affordable housing measurements being made in resolution through the agency, are we talking about in these community reinvestments, each agency being able to make their own definition about what affordable housing is? Or is this coming from the board itself making a resolution to do that?

There's no need for any resolutions. Um, the bill is clear. What we're trying to prioritize is single family detached, owner occupied homes. That's gonna vary depending on which county you're in, what the development looks like. And so it leaves the definition more flexible. It doesn't say it's gotta be 80% of a MI.

Okay, thank you Mr. Speaker. As I was looking at something, it tied to something that was talking about the board making a resolution of what affordable housing would look like. And so because there is that 40% swing between 80 and 120%, I just think if we are legislating and putting a lot of this in statute, we may think we're getting a low income housing or affordable housing and yet at 120% other people might not think that. So, um, I'm, I'm a little bit worried that we're not trying to tighten that up a little bit and leaving it to the discretion of, of these different developments. Thank you.

That's in order. We'd like to speak to it. Yeah. Colleague this as 2, 2, 2 minor things. One, it, it, uh, requires that this committee goes back and reports to the economic development interim committee and the political subdivisions interim committee. And then it makes some, it has some clarity around uses of the proceeds in the bill.

Colleagues, what should the role of state government be in the housing market? That's the fundamental question that we oftentimes ask ourselves. Since 1985, the median home price in Utah has grown on average year over year at 5.2%. Meanwhile, median wage growth has only been 3.2%. That 2% gap year over year for 40 years. Compounding creates a massive chasm for where medium incomes are today and where median home prices are. We know it's a problem. Middle class Utahans increasingly are unable to afford a starter home in our state. Now, we've worked hard over the last year. We've worked with mayors and city council people and city managers and private industry to try to think about the housing problem differently. To come at it from a different perspective. If you look at the state of Utah, there are 190,000 entitled units throughout our state. Many of them aren't being built. And so the question you have to ask yourself is why why aren't those units being built? Well, certainly part of it is the macroeconomic environment. We have high interest rates. The market has cooled down a bit. But if you talk to city managers and mayors and the private industry and city council people, you'll hear that at least part of the reason why those planned units, the units that cities have said they want aren't being built, is because of a lack of capacity infrastructure. What do I mean by that? I mean, Big Water transmission lines. I mean big sewer lift stations, water treatment facilities, water tanks, regional roads. And so what this bill does is it tries to get away from the traditional fight around preemption and move towards partnership. A partnership with private industry, a partnership with, um, local government, and via the state, it sets up a hundred million dollars revolving loan facility that gets paid back. Cities come, they ask for the money, they make an application to support planned housing, and then it gets paid back primarily via developer paid impact fees. The idea is if we can strategically invest in capacity infrastructure, we can get ahead of growth rather than being behind it all the time. And we can support planned housing, housing that's already been planned by our local governments. Now, I wanna say this to close colleagues, anytime you deal in housing policy, you have to have a sense of humility because there is no silver bullet, there is no magical solution to the housing problem. But I do think that this bill takes a step forward, even if it's just a small step in addressing the problem. And with that, I urge your support and I'm open to questions.

Thank you, Mr. Speaker. I wanna rise in support of this bill. The sponsor has done, uh, great work in, in putting together a plan that can actually help municipalities and local, uh, uh, local areas build more infrastructure to support housing and especially starter homes. Uh, there are the loans that will be available through this program can make a, a big difference in finalizing the infrastructure that often holds up, uh, some of the new builds. So I, I stand in support and appreciate the improvements that he's made to the bill.

Thank you, Mr. Speaker Pro Tim, um, I rise in support of this bill as well. I think it's a good solution to a lot of problems, but I have one question. If, uh, would the sponsor yield Mr. Speaker,

Uh, maybe the good sponsor could tell me. I, it, it says we're gonna take another bunch of money from the Transportation infrastructure fund and then later on down in the fiscal note it says we're gonna bring some back, uh, with the issuance of bonds. I guess my question is, Mr. Speaker ProAm is we got this all figured out so we're not breaking the transportation fund.

Yeah, let me, let me address that question where the money is coming from. So a few years ago, uh, this body new law was signed to create a fund using the public float, the cash in the transportation infrastructure fund to basically extend credit to private developers. And the idea was you would take this money, you would commingle it with bank money, and you would lower the interest rate. Whether or not that was good policy or or bad policy, my bill doesn't have anything to do with it, but what it says is we're gonna repurpose some of that money because it wasn't being used, it wasn't very effective. And so that was a $300 million slug of capital. This is just taking a hundred million dollars away from repurposing that money, um, from the transportation Infrastructure Investment Fund float.

Thank you Mr. Speaker Pro. Tim, I think it's a, it's a good bill. Uh, we've, we've kind of threw the shot put around a little bit and maybe hit our toe in the past and maybe this would be a good solution to a lot of problems. So, uh, I would urge your support. Thank you.

Thank you Mr. Speaker Pro tem with the sponsor yield to a question. The sponsor yield? Yes, go ahead. Thank you. Um, in lines 2 71 to 2 75, there is a specified recipient of a, um, sorry, infrastructure loan. I'm just wondering what the purpose is for specifying one particular entity in code for a loan would be, rather than having them go through a process to receive those loans.

That's a very fair question. I'm glad you read it closely. So the state, so as part of the loan, the a hundred million dollars, there will be a loan extended to the point of the Mountain Development Authority. The way that that works is it's state owned land and we entered into a development agreement years ago with private developers and the state, um, to put in the backbone infrastructure of that project. Again, not here to litigate if that was good policy or bad policy, but we're obligated to put in some infrastructure at that site. Uh, they are planning to sell 50 acres with owner occupied single family detached product. And this was a way to kill two birds with one stone to provide the infrastructure money that the state is obligated to provide and to have it be repaid by the cell of that 50 acres at the point of the mountain that has that, that will support housing. And so that's why we put it in.

May I ask a follow up question? Mr. Speaker, who owns the 50 acre? I mean, will you yield, will the, will the sponsor yield to an additional question?

I will Go ahead.

Who owns the 50, I think you said 50 acres of land. Who currently owns that land?

The people of Utah, the state. Not a particular city or county. It's within Draper City limits, but no, it's state owned land. We own the land.

Thank you. Thank you.

Thank you Mr. Speaker Pro temp. I rise in support of this bill. The high demand for homes in the state and the low supply of homes in the state is one of the reasons of the high cost of the homes in the state. This particular bill represents a collaborative partnership between local cities, counties, and private developers that have collaboratively worked on this concept for several years, and it's now before us to be able to help unlock housing potential development areas that are only being prevented right now because of the lack of infrastructure. So I would encourage everyone's support of this bill and compliment the representative for his good work of the collaborative work with the cities, counties, and the state to still maintain local decision authority as this moves forward. Thank you, Mr. Speaker Pro temp.

Thank you, Mr. Speaker ProAm. Will the sponsor yield to a question? Yes. Will The sponsor yield? Go ahead. Thank you. So in the presentation sponsor discussed the issue of, um, entitled pieces of property, and I wondered, um, the degree to which this, uh, statutory change assists municipalities, ESP cities and municipalities in working more collaboratively and more productively on, um, on some sometimes when properties are over entitled in their, within their city limits.

Help help me understand the question. Okay. Maybe reframe it if you wouldn't mind.

Okay, well I'll, I'll I'll just be a little more blunt if that's okay. Um, my understanding is that there are some cities that have a lot of pieces of property that are entitled by developers and that, but are not being built out and the cities have limited ability to compel the actual development of those projects. I wondered if this gives the cities an opportunity to make sure that that process is more collaborative and productive.

Yes, that's a, that's a good question. It does. I mean, the idea is that if, let's say a city entitled, I'll give you an example. There's, there's a major city here in Salt Lake County that has 2000 entitled units, um, in open space. They have $50 million worth of water infrastructure that needs to go in. Um, this bill would support that kind of project. Now it's gonna be important for cities and, you know, you've gotta trust the city to do the right work here, but to make sure that ultimately there's gonna be a payback mechanism, which is usually from the impact fees, developer paid impact fees. Um, and so in order, you know, in order for the payback to happen, you've gotta actually have the development. And so I think what you will see is a give and take and a push and pull with, uh, the cities and the private developer as they try to access the money. Hopefully that responds to your question.

Uh, thank you Mr. Speaker pro tem, that, um, that's great news and I'm really happy for the clarification. I also rise in strong support of this legislation that's long overdue and I also applaud the sponsor for threading a very careful needle needle on a critical issue in our state.

Yeah, I, I think I know where the concern's coming from. To be very clear, this is not a pi, it's not an economic development tool. There is no special economic zone being created. Special service districts are oftentimes water districts. And so if you're gonna be delivering water infrastructure to support housing, uh, you want to have them in code because oftentimes that's what's going to facilitate that kind of infrastructure. So that's why they're included.

So throughout code, it's actually something that we need to clean up, not in this bill, but in some, some future bill, but there's a bunch of different definitions of what moderate income housing is. It can be 80% of a MI or 120% of a MI. Um, this bill tries to be flexible. It, it says we want this to be used for single family detached owner occupied homes because that is the product that we are so desperately in need of in the state. And so it directs the board to prioritize that and ultimately put rule in place in conjunction with the economic development interim committee and political subdivisions committee. But it doesn't give us specific definition like 80% of a MI. And the, the reason why is because oftentimes when government tries to do something, it creates a box that's so inflexible and so narrow that it becomes really difficult for the people trying to use that service to fit into that box. So we tried to keep the box fairly flexible so that cities could come with creative solutions.

There's no need for any resolutions. Um, the bill is clear. What we're trying to prioritize is single family detached, owner occupied homes. That's gonna vary depending on which county you're in, what the development looks like. And so it leaves the definition more flexible. It doesn't say it's gotta be 80% of a MI.

The fourth substitute, um, deals with county of the first class highway fund. It creates a, in, uh, a loan program out of there to support affordable housing and creates a commission to make those affordable housing de determinations and award grants and award, uh, other monies from the county of the first class highway fund. That's the difference from the prior sub.

This bill does a number of things. First, it sets up a state housing infrastructure partnership fund. It's using this from the PTIF in an effort to, uh, allow for more infrastructure to be built, which is one of the barriers to creating more housing in our state and particularly affordable housing. So in an effort to do that, it creates a commission that will review applications. This commission will be housed in the housing department of the Governor's Office of Economic Opportunity, or, or now goed. Uh, goed would staff support for that. They would authorize infrastructure loans, um, to qualifying political subdivisions to finance improvements to help with the construction of housing, as I mentioned. Um, it also, uh, creates an affordable housing infrastructure grant board, which we actually did last year. It modifies that board. Um, it modifies that board, and then it allows for additional bonding on the quarter of the quarter fund, which is a local option, sales and use tax. And then that commission would then appropriate funds out of that, or not app, I shouldn't say appropriate, that it would've, it would award grants out of that fund to applicants that support affordable housing. In addition, there is some, some money in the quarter of the quarter fund, which it is colloquial called, that could also be awarded by this commission. We also have a, a problem right now we, we are talking about a downtown redevelopment zone and, uh, we are looking to obviously revitalize our downtown with the Salt Palace and an entertainment district there. And part of that is the Salt Palace. Uh, based on financing numbers, there's a little bit of gap that we're trying to solve and this would help solve that by reappropriating some of the transportation funding that we sent to that district last year and allowing that to be used to help solve this problem, as well as pulling money from the quarter to quarter fund ongoing and, uh, appropriating that to Salt Lake County to help solve this gap. In addition, there is in the fifth or the fifth, an amount that goes to the county, specifically designated for transit. And that uses a portion of that also to help to go to the county to help fund this gap as well. And that is essentially the bill. It also allows state agencies to sell surplus real property that's already pre entitled. So it helps with the housing afford affordability there. So really the in, really the intent of this is to help with infrastructure to help with housing and solve some problems.

I'll move that we pass. Fourth substitute house bill 4 92.

Thank you Mr. Speaker. Motion to circle. Motion to circle is an order sponsors off the floor. Uh, we'll go ahead and place the motion. The motion will be for US house, uh, circle, uh, 4 92 HB 4 92 HB 4 92.

Thank you Mr. Speaker Motion to refuse to concur with the Senate amendments and we ask the Senate to recede Not the Cow Bell.

Thank you Mr. Speaker. Motion to concur. Thank you. Sorry. That's adopt the conference Committee report. Motion to adopt the conference Committee report.

Yes. The two major changes here, colleagues are number one, this puts the legislature more in control of how Salt Lake County Road money gets spent. It puts us in the driver's seat, which is important. And then number two is it reduces the amount of money being spent on Third West as part of a larger agreement with, uh, a, a private company to pitch in to the overall development. So with that, I'm open for questions.