SALT LAKE CITY – Gov. Spencer Cox began the special session of the Legislature on June 19 with a ceremonial signing of Senate Bill 168, bringing Utah a step closer to a much-needed affordable housing boom.

“Utah needs more housing,” according to Cox, in remarks prior to the ceremony at the state Capitol, “so this past (general) session, we modified the state building codes to allow for more modular home construction.”

Modular homes, the governor explained, can be “a real game changer” for rural communities, cities and towns struggling to build housing quickly.

Prior to the 2024 legislative session, Cox had hoped that lawmakers would buy into his $150 million investment program aimed at construction of 35,000 new starter homes in Utah over the next five years.

The need for that type of building program is obvious. Utah’s current housing affordability crisis is projected to worsen as the state’s population continues to grow, according to researchers at the Kem C. Gardener Policy institute at the University of Utah, who say that Utah’s housing shortage will increase to more than 37,000 units in this year alone.

State officials add that the housing shortage is compounded by high interest rates, which have forced Utah’s building market to shrink as would-be developers struggle to obtain bank financing for their projects.

In what proved to be a relatively tight budget year, however, lawmakers didn’t go along with the governor’s ambitious plan. Instead they worked with Cox’s staff to create a slate of bills that focused less on subsidies and more on free market policies.

Those bills — including Senate Bill 168 – are intended to create new tools that cities and developers can use to finance infrastructure and other needs, in the hope of paving the way for more affordable, single-family housing projects.

That approach is supported by the Utah League of Cities and Towns, which argued throughout the legislative general session that forcing its members to zone for higher density housing would chip away at the local authority of cities and towns.

That argument proved effective after the league lobbyists cited a November 2023 report that found that 66 Utah municipalities had a backlog of 190,000 zone-approved housing units that have yet to be built due to the lack of infrastructure (streets, sewer lines and sidewalks) needed to support them.

The new law signed today at the Capitol sets a statewide standard for building modular homes.

Modular home construction mimics an assembly line process. They are houses built off-site, usually in an indoor, quality controlled setting. They are completed in sections, referred to as modules, according to specific plans. Those sections are then transported to the site where they are assembled and installed on an already-existing foundations.

Advocates for the modular home industry say that their permanent construction techniques result in equal or higher quality standards for homes than those built on-site.

Senate Bill 168 also allows cities and town to create Home Ownership Promotion Zones. Those zones would enable municipalities to capture tax increments for 15 years to finance home development projects while also allowing them to increase density by up-zoning to smaller, single-family lots.

If such a home ownership zone is created, it will automatically be zoned for six units per acre. At least 60 percent of the zone’s units must be considered “affordable” and all of them must be owner-occupied for at least five years.

“We’re on our way,” Cox promised, “to building more starter homes across the Beehive State!”

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