Midvale incentives for affordable housing on Main StreetJun 29, 2021 11:25AM ● By Erin Dixon
Midvale is opening opportunities for developers to start improving Main Street in a big way. (Erin Dixon/City Journals)
By Erin Dixon | [email protected]
Midvale’s Main Street is being overhauled and part of the change will be adding affordable housing.
On June 1, Midvale staff and city council discussed what it will take to get contractors to make the upper floors affordable housing. Through the Midvale’s Redevelopment Agency (RDA), an incentive program was made to encourage developers to build second and third story housing units on top of the ground floor commercial.
The RDA is a separate budgeting entity from the general budget, but the board is made of the same members as the city council.
“The goal is to bring more affordable housing to the area and...[d]ecrease the crime rate through passive surveillance,” Patrick O’Brien, RDA housing manager, said.
“Up to 50% of total development cost of the residential component of the project. The maximum agency assistance may be modified at the agent's sole discretion,” O’Brien said.
Where is the money coming from? The RDA has partnered with other local taxing entities to fund the redevelopment of the area. The RDA has money set aside from those agreements for the affordable housing program.
“All funding will be provided in accordance with the agency's forgivable loan,” O’Brien said.
“Agency funding will be secured by a deed restriction on the property. The loan will be forgiven in its entirety if the property remains in compliance as moderate-income housing for 60-80% Alternative Mortgage Instrument (AMI) for a period of 15 years or another agreed upon timeframe.”
The council discussed potential pitfalls of the program.
“I don’t really like giving $5 million that comes from tax increments in a forgivable loan in hopes that at the 16-year mark they don’t go to market rates,” Councilmember Bryant Brown said. “It feels good for 15 years and then it’s not. We don't give money to residents for these kinds of things.”
“It’s something that I’ll probably vote yes for but I’ll hold my nose while doing it,” Councilmember Dustin Gettel said. “We have an affordable housing crisis...a statewide issue. We could expect developers to step up. [But], we’ve seen that doesn’t happen unless there’s some incentive.”
When a developer takes advantage of the program, they are required to rent the residential units below market price for at least 15 years.
“I think it’s going to be really hard even with all of these incentives because of...small lot sizes, the utilities are a mess,” Nate Rockwood, Community Development director, said.
“If you want low-cost housing,” Councilmember Paul Glover said, “you have to put money in it. A developer is not going to put it in through his good graces.”
“It's hard for me in the same meeting to say to the 70-year-old fixed-income lady that we’re going to raise your water rates 15%,” Brown said. “And turn around and give a million dollars to a millionaire.”
The city will continue to have control of the money after the agreement. If agreements are not kept, then the money must be paid back. The rent for the housing will be cut and dry, with no additional fees.
“They’re not really a partner,” Brown said. “They’re trying to get the biggest ROI (Return On Investment). I need it to be as strict as possible.”
“It’s the tax increment that we want,” Glover said. “The better and bigger they put in there the bigger tax increment we get back.”
“The onus will be on the investor to show the city they’re going to bring back at least a million dollars for the city,” Cody Hill, RDA manager, said. “And a benefit to the residents.”
Ultimately, the plan was approved with a vote 4 to 1. Brown was the dissenting vote.
Months ago, the city council approved a form-based plan for Main Street, which allowed them to mix residential and commercial in the same area, as opposed to single zoning. For more details on the area project, see www.midvalejournal.com/2021/06/14/359555/who-is-funding-midvale-s-main-street-updates-