KSL Investigates: Bill aimed to combat Utah housing boom, affordability

Feb 25, 2021, 2:44 PM | Updated: Feb 7, 2023, 2:59 pm

KSLTV.com

EDITOR’S NOTE: After dozens of complaints from viewers about construction defects in Utah, in 2019, the KSL Investigators launched an in-depth look at the construction industry. This is a follow-up to a series on A Building Problem in our state.

KAYSVILLE, Utah — For more than a year, the KSL Investigators have revealed how the Utah housing boom has resulted in serious building problems and construction defects in homes. A shortage of building inspectors has made it even more difficult to keep up with demand.

A Utah lawmaker has proposed a solution, but critics say it may ultimately hurt homebuyers.

House Bill 98 addresses local government building regulation amendments. The bill’s sponsor, Rep. Paul Ray, R-Clinton, says the bill would allow home builders to go around city inspectors if their building departments are too slow in fulfilling inspections and issuing permits.

RELATED: KSL Investigates: Number Of Inspectors Isn’t Keeping Up With Home Construction In Utah

In Utah, local governments are responsible for making sure all new residential and commercial structures built in their municipalities are safe. That’s the job of licensed building inspectors on staff. New homes require at least eight total inspections from start to finish. Everything from the foundation to framing, plumbing, HVAC and electrical, to the insulation should be scrutinized and signed off.

Under current Utah law, cities have three days to complete an inspection and 14 for the permit process.

If H.B. 98 were passed and local governments failed to meet those deadlines, “The builder has the option to go out and hire an independent third-party inspector to finish the inspection and the subsequent inspections through the end of the project,” Ray explained.

Support For H.B. 98

As a small builder, Jason Larsen supports the legislation. Larsen has been in the construction business in Utah for over 20 years.

“The first house I built took me 97 days. It was a moderately sized house – a 3,400 square foot rambler,” Larsen explained. “If you’re building that house today, it’ll take you between six months and a year. Largely, that time differential is due to red tape – the permitting process and all of the new regulations.”

Larsen owns JPL Construction and recently finished the Cityside Townhomes project in Kaysville.

(Image courtesy Jason Larsen – Owner, JPL Construction)

“We bought the ground in April of 2017 and it took us 18 months – so by late September of 2018, we got a building permit,” Larsen said. “It took longer to permit it than it did to built it and occupy it and that’s excessive, from my perspective.”

Local Leaders Across Northern Utah Build Alliance Against H.B. 98

Elected officials in several Utah cities are concerned about the proposed law, and what it could mean for the integrity of construction for future residents.

In a letter dated Feb. 17 to the House Political Subdivisions Committee, the South Weber City mayor and five council members argued the bill “encroaches upon a municipality’s ability to provide essential public safety measures to residents and businesses in favor of a conceived efficiency for developers.”

The letter continues, “Allowing a builder to hire and contract their own inspector is a major conflict of interest and does not provide the necessary oversight that municipal inspections provide. A builder will control the entire process if allowed to contract for construction and inspection of the same project. That is extremely problematic.”

Two days later, elected officials in 16 other cities joined South Weber in issuing a press release in opposition to what they described as “extreme overreach of the state legislature,” stating Ray “isn’t looking out for the best interest of communities and the residents that live in them, but rather developers who are under pressure to build homes as fast as they can and for top dollar.”

Ray has since revised his bill. But he still sees a need to give builders more options.

“If a city does what they’re supposed to do, this bill never kicks in,” he said.

But, even the revised bill has some cities concerned.

“Buildings are the largest investment most people make in their lives and in an overnight structural issue or other problem caused by a building defect, you can basically wipe out someone’s net worth,” said Jon Call, the city planner and city attorney for North Ogden.

South Weber leaders said the foundational principles of the bill are “off base.”

Opponents argue Ray has a conflict of interest because he is the CEO of the Northern Wasatch Home Builders Association, a local chapter of the Utah HBA. In response, Ray told KSL Investigators he disclosed the conflict and because he is not a builder, he wouldn’t make any money off the bill – regardless of whether it fails or passes.

“Yes, it is a conflict in the fact that I work in the building industry. I’m over the association. But at the same time, we’re a citizen legislature. We all have conflicts on bills,” Ray added.

RELATED: New Construction Laws, Campaign Contributions, Potential Conflicts Of Interest

On Wednesday afternoon, the House Political Subdivisions Committee passed the substitute for H.B. 98 unanimously, issuing a favorable recommendation for the legislation to move forward.

During public comment, Layton city attorney, Gary Crane, said the substitute was “a bill that we could live with.”

The Utah League of Cities and Towns entered a neutral position.

Multiple representatives for construction companies and home builders also commented in support of H.B. 98, including Perry Homes which noted a “strong support of this bill.”

Housing Affordability & H.B. 98

“The most important factor of the bill is trying to make it more affordable to build a house in Utah,” said Ray.

He says cities are to blame for costly home prices and he hopes to address that by also limiting a city’s power on zoning requirements.

Rep. Paul Ray, R-Clinton (KSL TV)

“You have cities that do an old practice that we called in lending, ‘red-lining.’ They [local governments] actually will make ordinances and zoning requirements that really shoot up the cost to build a house. And the reason to do that is to keep lower income people out of their cities,” Ray said.

If H.B. 98 passes, it would no longer allow local government to make rules on things like minimum square footage and mandatory exterior materials used in homes built in their jurisdiction.

“You can’t tell me what color my house is, you know, or what the pitch of my roof is,” Ray added. “It says that you can’t require a certain number of rooms in a house, you can’t require all brick, you can’t say that you can’t have siding, or you can’t have stucco, because those are less expensive ways to build a starter home.”

However, because homeowner’s associations and builders have their own say and can set their own standards in requiring such things, opponents to Ray’s bill say homebuyers will ultimately pay the price.

A Retired Inspector Weighs In

“Too much of legislation is simply for the benefit of a certain special interest group, not for the public,” Brent Ursenbach said. “There’s no question that there’s a lot of builder friendly legislation – there’s a lot of builder friendly amendments, and that the Utah HBA has a strong voice in the legislature.”

Ursenbach retired as a building inspector with Salt Lake County in 2018 and now takes side work independently. He fears the bill would allow builders too much authority over the process.

“This bill is crazy because it basically says, ‘You know what, we’re just going to say, we don’t want the city involved, we’re going to hire someone to do everything,’” Ursenbach said. “The guy that built this house also selected his inspector and selected his plans examiner and had every control over everything and there was no oversight by a government agency.”

While H.B. 98 could technically bring independent inspectors like Ursenbach more business, he says he doesn’t want it. His workload is too large as it is.

“The building inspector with 15 inspections a day is trying to keep up with poor craftsmanship,” Ursenbach said.

That, combined with the fact that Utah’s licensing requirements have lessened for certain building trades in recent years, he says, everything falls on inspectors.

“I see the homebuyer as being the loser in this thing,” Ursenbach added.

Data: Construction Complaints, Permits On The Rise

Based on a growing number of complaints from homeowners, that may be true.

According to the Utah Department of Commerce, in the last three years, complaints against contractors have increased by 28%.

2018: 1,274 Cases
2019: 1,581 Cases
2020: 1,632 Cases

During that same time, requests for construction permits has also increased. Data from the Kem C. Gardner Policy Institute shows a 22% increase in permits over the course of five years, from 38,405 permits in 2016 to 49,230 issued in 2020.

Another concern from industry experts: Nothing in the current draft of the bill says builders would have to hire an inspector with specific qualifications, it just says they be licensed by the Division of Occupational and Professional Licensing (DOPL).

Experts fear that without requiring the highest level of licensure available, someone who has a limited license and specializes in welding could, in theory, be hired to inspect and sign off on a home’s framing, plumbing and electrical work.

Cities or municipalities hire building inspectors who are licensed and certified through the International Code Council.

Resources

To file a complaint with the Utah Department of Commerce, verify the license of a professional or check on whether a licensee has faced disciplinary action, consumers can visit the DOPL website for more information.

Additional consumer information is also available on the Utah Division of Consumer Protection’s website. For more information from the National Association of Contracting Licensing Agencies, click here.

Have you experienced something you think just isn’t right? The KSL Investigators want to help. Submit your tip at investigates@ksl.com or 385-707-6153 so we can get working for you.