Let people have mother-in-law apartments

Of all the market forces politicians like to try to change, the one labeled “affordable housing” may be the trickiest.
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In Salt Lake City, the Redevelopment Agency has just allocated $17.6 million for affordable housing initiatives, ranging from a fund to help developers include more low-income housing in their apartment projects to renovating an old motel on North Temple into a project where no more than half the units would qualify as low-income.

But that same group, acting as the City Council, has delayed for several months the question of whether to allow so-called mother-in-law apartments in existing homes.

When I asked about this during a meeting between three of those council members and the Deseret News/KSL editorial board this week, I was told there really is no connection.

“Talking about accessory dwelling units (the official term for mother-in-law apartments) and affordability in the same sentence doesn’t really work,” said Councilman Charlie Luke.

If the city allowed people to rent out their basements, they would have no way to guarantee that those basements would qualify as affordable housing, I was told. Such apartments are expensive to add, especially if you’re trying to convert a garage or add a little cottage in the back. Consequently, the rent would be high, they said.

Ah, but here’s where the tricky part comes.

When the meeting started, the council members assured us that rising home values were hurting renters, and they also were hurting homeowners.

Some of those homeowners, perhaps in danger of having to sell because they no longer can meet expenses, might be able to stay and prosper if they could rent out part of their house.

As long as there are buyers and sellers, there will be two sides to housing affordability. Why look at only one side?

Nine years ago, when the bottom fell out of the real estate market, a lot of people who already owned homes found themselves in a dire situation. Their mortgages were higher than their sinking home values. They were stuck making high payments in a market where jobs were disappearing and salaries dropping, and they couldn’t sell their houses for enough to cover what they owed.

But it was a great time for first-time buyers looking for something affordable.

Today the Wasatch Front faces the opposite problem. The website realtor.com recently ranked Salt Lake City as the sixth hottest market in the nation. Sales of homes are expected to rise by 4.62 percent here in 2018, and prices by 4.5 percent.
If you own a house already, this probably is good news, unless you’re on a fixed income and property taxes are rising. But if you’re starting out, or if you are renting an apartment, things are getting tricky. According to recent reports, the apartment vacancy rate here is at about 2.6 percent, an all-time low.

Let me be clear that I sympathize with our city council contingent.

Because it is a relatively small hub in a greater metropolitan area of nearly 2.5 million, Salt Lake City gets stuck with a lot of the burdens. It is a magnet for the homeless. It provides many of the jobs and amenities that attract people from the suburbs.

The natural answer to rising home values is to get the private market to build more, but that already is happening in Salt Lake City. Council Chairman Stan Penfold may not have exaggerated much when he said the city has seen more construction in the last 10 years than it had in the previous 100.  

A modest investment in various programs to incentivize more low-income housing, spread judiciously, as the council has proposed, throughout all neighborhoods, makes sense, even if the council’s call for suburban cities to do something similar is naïve. Suburban politics sees the problem quite differently. Last month, voters tended to reject candidates who were seen as too favorable to high-density housing.

But if the city is serious about making housing more affordable, it needs to view the problem from all sides. That means giving homeowners a break by letting them rent out a part of their house.

Salt Lake City isn’t the only city dealing with this. In an op-ed last year in the Seattle Times, one retired woman spoke of renting out her basement to help her survive financially.

“The best thing Seattle can do to increase density and affordability in single-family zones is to actively encourage mother-in-law apartments,” she wrote.

There she goes putting affordability and mothers-in-law in the same sentence. With all due respect, I think they belong there.