Utah city tries ‘out-of-the-box’ approach to address housing crisis

FARMINGTON — Amid all the talk about housing affordability and the need to increase supply, one city in northern Utah is trying a different way to make a dent in the problem.

This week, lawmakers on Utah’s Capitol Hill heard about Farmington’s efforts to encourage more homeownership in an expensive market.

The question is, will it be successful?

“The affordable housing crisis needs a comprehensive approach – all types of things,” said Dave Petersen, Farmington’s community development director. “This is just one piece of that that could work.”

Making it easier for homebuyers

On a quiet street in Farmington, Anna May has big plans.

Walking around the property she and her husband have owned for more than 20 years, May said she wants to build a new house on one side of it. At the same time, she wants to turn part of the existing home into what’s called an accessory dwelling unit, or ADU, and rent it out.

But there’s more.

“We loved the idea of being able to sell it potentially down the road,” May said, “in case our kids wanted to buy it.”

Under a new city ordinance passed in July, she can do that—subdivide and sell the ADU rental separately.

Farmington city officials said the change in rules aims to increase the housing supply and help homebuyers.

“We want to make it more accessible,” Petersen said, “especially for families in Farmington and those who grew up in Farmington to remain in Farmington.”

The ordinance is the first of its kind in the state, according to Utah League of Cities and Towns executive director Cameron Diehl.

“Generally, ADUs are rental units, but Farmington is focused on opportunities for homeownership for young homebuyers and for older residents to have options to stay in their neighborhood as they downsize,” Diehl told KSL TV. “The ordinance is just a few weeks old, and many cities around the state are intrigued by the approach and the potential outcomes.”

Questions about how it works

This week, during a hearing of the Economic Development and Workforce Services Interim Committee, Petersen briefed state lawmakers on Farmington’s efforts. Several lawmakers praised the city for trying something new.

Rep. Mark Strong, R-Bluffdale, was intrigued.

“I have one of these in my backyard, and we rent to our children,” Strong said.

But he wonders what happens if a family member who buys an accessory dwelling unit later moves away.

“I can only imagine if I had a stranger back there, and I had no control over who was living there because I didn’t own it anymore,” Strong said.

Still, he thinks it’s creative and is curious to see how it will work out.

“It could be a wonderful opportunity,” Strong said. “Now you’ve got a piece of property that a young, starter family can buy inside their budget, and it can give them a leg up.”

A ‘proactive’ plan

Farmington officials said the new ordinance is a pilot program that will expire in three years unless the city council extends it. There are also some rules. The original owner must live on the property for at least two years to discourage investors.

Officials said that so far, a small handful of homeowners and two developers have approached the city interested in creating eventual owner-occupied accessory dwelling units.

Brock Johnston, vice president of Rainey Homes, is one of them.

“It’s an awesome, outside-of-the-box thinking way of doing things,” Johnston said of Farmington’s new ordinance.

Johnston said the “proactive” plan is an alternative to building high-density housing. It takes advantage of unused land on larger lots. He hopes other cities throughout the state will take note.

“To have that ability to take your half-acre lot, build a detached ADU and sell it to your kids – and then allow them to build equity and find their way through the affordability aspect – is unheard of,” Johnston said.

For May, who hopes to start construction next year, it’s a way to maybe help her children in a tight housing market.

“I look at prices,” she said, “and wonder how they’re ever going to be able to get something.”