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Soaring construction costs are exploding Utah’s already heavy debate over affordable housing.
A pandemic-induced surge in commodity prices like lumber, concrete, bricks and metals now virtually dominates the political conversation about soaring house prices and lack of supply as more in addition to potential buyers are squeezed out.
In the name of affordability protection, the Utah legislature decided to remove city and county leaders, and their planners, largely from regulating the design elements of new single-family home construction and of duplexes in their communities.
With backers on Capitol Hill as a way to smooth the steepening cost curve, lawmakers freed home builders from a series of city rules on height, exterior color, minimum sizes, roof slope and some fencing and landscaping requirements.
Homes still have to comply with building codes, but home builders say the additional flexibility without regulation could cut median home prices by tens of thousands of dollars, which are now rising to double digits year on year. other in all Wasatch Front counties. .
Utah Governor Spencer Cox signed the measure on Thursday, but many city officials, planners and advocates of history are already alarmed at its potential effects.
Rep. Paul Ray, R-Clearfield, called HB1003 – passed by significant majorities in the House and Senate – “a first big step we can take that is not subsidizing housing” to address the state’s affordability crisis.
“It’s really something that allows us to reduce the cost of building a home,” said Ray, who is also CEO of the Northern Wasatch Home Builders Association, an industry group.
A previous version – which Cox vetoed for insurance concerns – had been cropped and resurrected for this month’s one-day special session, he said, as part of a priority given to housing by legislative leaders.
Some housing advocates say while it helps home builders, it may do little, if anything, to alleviate the cost crisis for potential buyers or the thousands of Utahns who rent.
“It doesn’t seem to have much to do with affordable housing,” said Tara Rollins, Executive Director of Utah Housing Coalition.
In addition to concerns about the durability of homes built with cheaper materials, many city leaders warn that the new approach could confuse key parts of their land use and zoning rules. And, in various ways, it could also deprive residents of Utah’s built-up urban areas, rapidly growing suburban towns, and unincorporated areas, of their full say in the growth of their communities.
“One size doesn’t fit all,” said Cameron Diehl, executive director of the League of Cities and Towns of Utah. “Our cities are in different life cycles, with different geographies and different needs. And even if it reduces the cost of housing, will it actually reduce the price? “
Lumber up to 300% “unsustainable”
It’s no shock that building material savings are now part of the housing debate in Utah, but you might be surprised how important they have become.
The effects of limited land, labor shortages and rising material costs on housing prices in Beehive State have pushed pricing issues to the hyperdrive amid a new housing demand, a surge in do-it-yourself improvements and record interest rates.
Prices for basic materials have increased with the onset of the pandemic in the United States, with shutdowns disrupting factories and supply chains, but the pinch worsened with 2021 and intense demand for the new season of construction of houses.
Timber alone has skyrocketed by more than 300% since April 2020, and wood product supply issues have started to complicate and even slow down a series of large construction projects on the Wasatch Front.
Rob moore, CEO of Salt Lake City-based Big-D Construction, said dramatic price hikes are leading to material shortages that threaten to dampen the upturn in apartment and industrial warehouse construction, two strong sectors in Utah right now.
“Steel, copper, concrete, anything made from petroleum – they’ve been the highest in a lot of cases,” Moore said. “The reality is that we are heading for inflation.”
Members of Utah’s All-Republican Congressional delegation signed a May 10 letter to new U.S. Trade Representative Katherine Tai urging her to strike a deal with Canada to lower timber prices. softwood work “directly affecting the housing market”.
“With the economy under stress from the coronavirus pandemic,” they wrote, “the US government should do everything possible to help create certainty and predictability in our supply chains. “
Utah Senate Speaker Stuart Adams, R-Layton and a real estate executive also wrote Tai in conjunction with World Trade Center Utah, calling lumber prices “unsustainable, especially given the housing affordability crisis,” and urging a resolution with Canada “to help allay market concerns for builders and consumers ”.
And in another signal of how construction costs have altered the housing debate of late, one of this year’s Ivory Prize winners – an annual Utah-based competition for the best ideas to boost affordable housing – is a pioneer of bamboo as an alternative to wood.
BamCore, a privately-owned California manufacturer, supplies builders with hybrid panels and other components made from a combination of fast-growing bamboo and traditional wood. The company’s high-tech milling system then labels each part with diagrams on how to put them together, increasing the efficiency of the construction site.
According to Zach Zimmerman, director of business development at BamCore, the process is faster, greener and, more than ever, at a very competitive price with more traditional construction methods. Demand for BamCore was already strong before lumber prices took off, Zimmerman said, “but now it’s off the charts. I mean, it’s really amazing.
“New solutions” or “a real burden”?
Supporters of HB1003 say even small savings in material costs in building homes with less city regulation will be significant for potential buyers – many of whom, they add, are faced with the decision to leave Utah s ‘they can’t find an affordable house.
More flexibility on roof slopes can mean less lumber for trusses, Ray said. Allowing stucco instead of brick on home exteriors will also cut costs and pave the way for new homes to be built, he said. The exact cost savings, however, will be decided by market forces.
“This allows the market to better adapt to these cost fluctuations and simply puts the consumer in control,” added Michael Parker, senior economist at Ivory Homes, the state’s largest home builder. “And the reality is that we are in crisis. Everyone has to come to the table and we need new solutions. “
Opponents say the new law throws major curve balls in cities as they attempt to match new developments in their communities with the needs of residents and established neighborhoods. Regulating the design of buildings, they say, is an essential tool as the state’s population continues to grow.
Nick Norris, Salt Lake City’s leading planner, said that exemptions for areas that were “substantially developed” before 1950 meant houses in the same neighborhood could face different rules, making the more difficult application.
“It creates a real burden on cities,” Norris said.
Many regulations on the look and feel of new construction in the eastern foothills of Salt Lake City could be pre-empted by the change. It could also push back the western districts seeking to preserve their historic character.
The change retains the ability of cities to regulate the design of buildings in neighborhoods designated as historic neighborhoods, but only for neighborhoods created before January 1, 2021. Thus, any new area created for Western Salt Lake City neighborhoods such as Glendale , Rose Park and Poplar Grove would not have the same enforcement powers.
Ray said he wrote this into the bill to prevent the formation of new historic districts to bypass HB1003.
David Amott, director of Preservation Utah, said the housing crisis was being used to justify change, “but the real reason is developers have long wanted less regulation.”
Cox made it clear that his previous veto was based on the Bill’s effect on flood insurance – concerns since removed from HB1003.
Ray said the opponents “tried to screw me up. They called me corrupt. But, you know, I’m just trying to help homebuyers. They cannot afford to build.
“If you want affordable housing,” said lawmaker and former Clinton City Council member, “pushing things up to half a million dollars for a starting house is a no-go.”