The changes adjust the income limits to qualify for affordable housing in Jordanelle Ridge. They also designate $7 million in fees for Heber City to use at its discretion.
City attorney Jeremy Cook said at a council meeting July 15 that the changes are, in part, because of dramatic changes to the community and economy since the original development agreement was adopted in May 2020.
He said the way Heber tackles the affordable housing challenge needs to adapt, too.
“Things that worked five years ago don’t work anymore,” he said. “You have so many rich people moving in that are skewing the median income so much. What worked at 4% interest rates no longer works at 7% interest rates.”
While the original Jordanelle Ridge agreement stipulated residents must make a maximum of 80% of the area median income to qualify for affordable housing, the new rules raise the limit to 120%, an effort to make more people eligible for the apartments.
In Wasatch County, that threshold is a little under $115,000 for one person or about $164,000 for a family of four.
The amendment will also prioritize providing housing to local teachers, first responders and government employees.
The agreement changes the number of affordable housing units built within Jordanelle Ridge. Out of more than 300 total units planned for that section of the neighborhood, the developer will build around 100 apartments and 15 townhomes. Instead of constructing the remaining 200 units, the developer will pay Heber City $7 million in fees in lieu.
According to the agreement, Heber has the leeway to use that money however it wishes, including “investing in properties or other resources that may be utilized or sold in the future to generate income for affordable housing.”
Notably, that includes the city’s July 1 agreement to buy the Wasatch Wave building for $2.2 million of those fees in lieu.
It’s not clear when or if that purchase will translate into affordable units. Cook said the city intends to invest in downtown real estate to spur economic growth, then sell the properties and allocate that money to affordable housing.
The section of the Jordanelle Ridge agreement regarding fees in lieu generated the most controversy during Tuesday's meeting.
Wasatch County Housing Authority chair Kendall Crittenden said he was upset the city didn’t work with the housing board on the proposed changes.
“You’re asking the housing authority to do an awful lot, when, May of this year, you took away the fee in lieu money that would help us cover the cost of this,” he said.
Crittenden, who’s also a Wasatch County councilmember, said he objected to Heber deciding how to spend $2 million before adopting the changes. He said he wanted the city council to delay the vote and meet with the housing authority first.
Wasatch County resident Tracy Taylor shared Crittenden’s concerns. She worries Heber City will treat the fees in lieu like a “slush fund.”
“If you want to subsidize the Main Street businesses with the [community reinvestment agency] and start doing things on Main Street, that’s not what that money was intended for,” she said. “It was intended for affordable housing, which we are in dire need of. I think there’s two issues here: one is you taking the money; secondly, it’s how you’re going to use it.”
Heber leaders said it wasn’t their intent to steal anything, but rather to promote affordable housing within the downtown core, where more services and amenities are available.
Some councilmembers said the change to the fee in lieu structure was to accelerate the development of affordable units. They stressed the city wants a strong, collaborative relationship with the housing authority.
Heber City Councilmember Mike Johnston pointed out the city has tools the housing board does not: when it considers annexation requests, it can negotiate affordable housing requirements. The same is true when a developer requests a zoning change.
Councilmember Yvonne Barney said Heber’s unclear communications have added to the uncertainty and advocated delaying the vote.
“It’s important for us to be clear as to what our plans will be going forward with the money,” she said. “Because as they’re seeing it, with a lot of possible misinformation that is out there that we are doing something sneaky, underhanded.”
Just how far $7 million will stretch was another point of discussion Tuesday night.
Jason Glidden is the executive director of the Mountainlands Community Housing Trust, an affordable housing nonprofit. He said he doesn’t believe the fees in lieu will translate into the same number of affordable units the developer would have constructed otherwise.
“$35,000 a unit is not going to be enough subsidy for Heber City,” he said. “You will not get 200 units out of the $7 million, in my opinion.”
But he said if Heber wants to build housing very quickly, perhaps the deal makes sense.
Glidden told councilmembers a higher fee in lieu often incentivizes developers to construct the units themselves. That’s the rationale in neighboring Park City, which charges over $400,000 for every affordable unit developers opt not to construct on site.
After debating for nearly an hour and a half, the city council voted to move forward with the changes to the Jordanelle Ridge agreement. Councilmember Scott Phillips emphasized the city will also meet with the Wasatch County Housing Authority to strengthen their partnership going forward.
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