Attainable Homeownership Overlay Zone

THIS ITEM HAS BEEN MOVED TO DECEMBER 5TH AT 7PM BY THE PLANNING COMMISSION CHAIR

Lehi City is asking for review and approval of a new plan called the Attainable Homeownership Overlay Zone (AHOZ). This plan will allow developers and others to build homes that are more affordable for people to buy, without relying on government subsidies.

Background

In recent years, home prices have gone up a lot, and it’s harder for many people to afford a home. Right now, in Utah, the average price of a home is about $549,600, and to afford it, you would need to make between $135,000 and $180,000 a year. Because of this, more and more people in Utah can’t afford to buy a home.

The AHOZ plan wants to help by creating homes that are affordable for first-time buyers, but not necessarily for those making less than the average area median income. Unlike other affordable housing programs that need government help, AHOZ will give developers a chance to build homes that cost less than the market price by allowing them to build more homes on the land (which lowers the cost). This way, developers can still make a profit, and the city doesn’t need to keep giving money for the homes. It also helps the city by increasing property taxes over time.

Details of the Proposed Plan

The new rules will give developers a way to get approval to build affordable homes by using a Development Agreement. This agreement allows some flexibility in things like how many homes can be built, the size of the homes, and the size of the lots. But the homes must be sold for at least 20% less than similar homes in the area.

The way it works is that a developer buys land at the current market price. Then, they ask the city if they can build more homes on that land, in exchange for selling those homes at a lower price. The Development Agreement is a legal contract, so if the developer doesn’t keep their promise, they could be held accountable. Other landowners, nonprofits, and organizations can also apply for the AHOZ if they want to use this plan.

Encouraging Homeownership

To make sure the homes are bought by people who want to live in them, not by investors, there will be a deed restriction for ten years. This deed has a few important rules:

• The home must be owner-occupied (meaning the person who buys it must live in it) for at least ten years.
• If the owner has a hardship (like losing a job or going through a divorce), they can rent the home for one year.
• When the homeowner decides to sell the house, they can only sell it for a price that is 20% higher than the market value each year, but only for the first five years. This is to stop people from buying the house as an investment and flipping it for a big profit quickly.

The rules of the deed will be enforced by either the City, the HOA, or the developer, depending on the project. After ten years, the rules will no longer apply, and the owner can sell the house however they want.

Approval Process

For a developer to use the AHOZ plan, they must get approval from the City Council. This will include a public hearing, where the community can share their thoughts. The City Council has the final say, so they can make sure developers are committed to providing affordable housing.