Affordable Housing in a Rapidly Growing and Urbanizing Region

Affordable Housing in a Rapidly Growing and Urbanizing Region

The Bud Bailey Apartment Community provides housing and services for the homeless and refugees near a rail station in the Salt Lake City region. Image credit: Housing Authority of the County of Salt Lake Despite many negative effects of the recession, Utah’s economy has grown more rapidly than the nation as a whole during the recovery; its unemployment rate of 3.5 percent in January 2015 and 7.0 percent post-recession net job growth well outperform the national rates of 5.6 and 1.4 percent, respectively. The state has one of the lowest income-inequality gaps in the nation, and Salt Lake City – the state’s capital and largest city –ranks highly for upward social mobility. The state has also been a pioneer in reducing homelessness. Utah’s 10-Year Plan to End Chronic Homelessness has been a resounding success by most accounts; a recent state report shows a 72 percent decline in chronic homelessness since 2005, and Salt Lake County reports chronic homelessness among veterans was effectively zero in 2014. However, these positive indicators do not mean that Utah has solved all of its housing problems.

Many policymakers in the state are concerned that lower-income residents and others on the margins of the labor force may not share the benefits of Utah’s growth. Income inequality has continued to grow as those earning low incomes endure the worst effects of stagnant wages, low household assets, and low credit scores that may result in high-interest loans. Recent refugees, homeless families, and homeless youth transitioning out of foster care are three low-income groups targeted by the Bud Bailey Apartment Community just outside of the Salt Lake City boundary, an affordable housing project that may serve as a small-scale template for providing housing and services to typically marginalized populations in a rapidly growing region.

Aligning Affordable Housing with Regional Growth

All five of Bud Bailey's buildings have solar panels, which provide a significant portion of the complex's energy needs. Image credit: Housing Authority of the County of Salt Lake
Because the average rent for most new construction in Utah exceeds $1,100 per month, and because the state’s poverty rate reached 12.7 percent in 2013, a sizable number of Utah residents are vulnerable to any cost increases; 42 percent of Salt Lake City households are cost-burdened (spending 30% or more of their income on housing). Carleton Christensen, director of regional development for Salt Lake County, notes that the supply of market-rate units is not a primary policy concern: “Where we’re challenged is [in] developing enough affordable housing.”

Bud Bailey: A Project for the Vulnerable

Kerry Bate, the current director of the Housing Authority of the County of Salt Lake (HACSL), says that although the state had been meeting the needs of chronically homeless single people, homeless youth and families were still underserved, as were refugees, who often face housing challenges while integrating into a new society. Therefore, a project supporting both refugees and homeless families was a priority for HACSL.

The 136-unit Bud Bailey complex (named for Clarence "Bud" Bailey, former chairman of the county housing authority) opened in July 2014. Five buildings offer 1 studio, 92 one- and two-bedroom, 28 three-bedroom, and 15 four-bedroom units. The average household income of Bud Bailey residents is at or below 42 percent of the area median income. Sixteen Shelter Plus Care vouchers are set aside for chronically homeless youth and families, and 40 project-based housing vouchers are set aside for refugee households. The apartments benefit from their location two blocks from the Utah Transit Authority’s Meadowbrook rail station and contribute to residents’ vision of the industrial area transitioning to a mixed-use, mixed-income transit-oriented development.

A 10,000-square-foot community building houses extensive support services and programming, a focus of the project. Examples of programming include pre-school care through the Granite School District and story-time programs through Salt Lake County Library Services for young children. On weekdays, school-age children are offered an activity-based program taught through the “Too Good for Drugs” and “Too Good for Violence” programs. Teen residents receive tutoring from University of Utah students and writing workshops from Salt Lake Community College’s Community Writing Center. Adults seeking employment have access to a state Department of Workforce Services representative and English and financial education courses. Bate says a strong social service component was important to help residents flourish. “The most important thing [we did] is bring partners to the table willing to provide services for the people we intend to house,” says Bate.

Partners assisting HACSL and architect Method Studio with the concept and design process included refugee resettlement agencies, homelessness service providers, and state human services agencies. The four-bedroom apartments were included at the request of refugee advocates. Although he was initially skeptical of the need, Bate says the four-bedroom units were the first leased, even generating substantial interest from market-rate renters.

Nearly $21 million of the $30 million project was financed through 9 percent low-income housing tax credit equity. Other financing consisted of a $6 million permanent loan and smaller grants, loans, energy rebates, and deferred development fees. Because of its relatively small debt burden, HACSL was able to devote more of its resources to resident services, including an on-site services coordinator. Rents from eight market-rate units provide the project with additional financial viability.

The modern-looking complex has favorably influenced perceptions of the neighborhood. Christenson says, “Bud Bailey, in this particular segment of the community, was the trendsetter.” He also believes that public-sector investment in the project gave private developers confidence that the neighborhood represents a viable development opportunity going forward.

Keeping a Growing Region Accessible

As the Salt Lake region expands its transit system, reshapes development patterns, and becomes more socioeconomically diverse, Bud Bailey offers an example of how an affordable housing project can successfully contribute to a region’s long-term growth planning. Simultaneously addressing multiple public policy goals by providing immediate housing and support opportunities to vulnerable populations while contributing to the larger redevelopment of an emerging transit node, the complex illustrates how to integrate affordable housing into a rapidly growing region.