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SALT LAKE CITY — Like many cities across the state, Farmington is facing a housing crunch primarily led by rapidly increasing home prices that have pushed homeownership out of reach for many residents.
Newly constructed homes are consistently valued at $1 million or more, according to David Petersen, the city's community development director, who said existing freestanding homes in the city can top $750,000 and for-sale townhomes are often listed at half a million dollars.
Despite the average household income for Farmington being about $130,000 annually, those home prices exceed what most residents are able to afford.
"So, housing affordability in Farmington is not good," Petersen told the Utah Legislature's Economic Development and Workforce Services Interim Committee on Wednesday morning.
Petersen was one of several municipal officials to present to the committee on one of the oft-proposed solutions to the housing crisis: accessory dwelling units. Also commonly referred to as mother-in-law apartments, accessory dwelling units can be basement, garage or detached units that homeowners rent out.
Proponents say allowing for such accessory units will expand the supply of housing units, lower rent prices and help homeowners better afford real property.
Since the Legislature allowed permitting of internal or attached accessory dwelling units across the state in 2021, Farmington has embraced the concept and has worked to remove regulations in all residential zones to make it easier for homeowners to rent out their basements or other spaces.
Petersen said demographic changes in Farmington and elsewhere are driving the demand for accessory dwelling units, as everyone from aging adults looking to downsize to newlyweds looking for a first apartment are taking advantage of the new housing supply.
He said the city has also taken steps to prevent investors from buying up properties to rent out by requiring that owners live in the home for at least two years after purchasing.
Millcreek Mayor Jeff Silvestrini said the issue of accessory unites was a "heated" one when it came before the City Council years ago but said city officials ultimately opted to allow them out of concern for rising home prices.
"We had people that favored them, saying, 'This is an opportunity for me to age in place, and this is an opportunity for me to afford a home in Millcreek ... because if I could rent out my basement, I could afford a mortgage payment here," he said. "We recognize ADUs as a mechanism to address housing affordability, and it's a way that we — our council — believes is relatively low impact in terms of the density that it creates, because it's just one more dwelling unit on a lot."
St. George has been permitting accessory units in certain residential zones going back to the 1980s, according to Shawn Guzman, the city's government affairs director, but historical demand for them has been relatively low. The city had only one application for an accessory dwelling unit in 2019, he said, which was in line with previous years.
"Those were what we were seeing prior to 2019 — two some years, none, one — there did not seem to be a demand, or people were not using that ADU option as often as you would think they would have," he said.
That changed in 2020, when 47 applications were filed. That number grew to 94 applications each in 2022 and 2023, with 49 applications filed to date in 2024. Guzman believes the increase is driven by awareness of accessory dwelling units as well as the city's population of older adults.
"We're having a big problem — not just with housing for young people — but also for the elderly that's affordable, and we have a lot of people who are creating these ADUs so that their elderly parents can move in," he said. "It not only allows for an elderly person to find a place to live, but we also find that the families ... assist the elderly when they need some care and maybe assistance with groceries and other things."
Because accessory units go against traditional desires for freestanding, single-family homes, Guzman said creating or converting space to be used as a rental can still be cost-prohibitive for many. He said the average cost to construct a one-bedroom detached unit is over $100,000, and believes future housing could be cheaper if developers build new homes with accessory dwelling units in mind.
"That is a stretch for a lot of our young families," he said of the cost. "If we can get more builders to begin building these products initially, we think ... the impact of that could help relieve our housing situation."
The presentations were made in response to a specific policy proposal, but the discussion could help shape future legislation as lawmakers continue to wrestle with the issue of affordable housing.
"We appreciate this topic and what you guys have brought to it," said Sen. Ron Winterton, R-Roosevelt, the chairman of the committee. He said lawmakers should continue to "look at other ways" the state can help cities address housing shortages.
