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City of Lehi can no longer collect impact fees for internal units

Posted at 5:46 PM, Mar 04, 2022
and last updated 2022-03-04 19:57:13-05

LEHI, Utah — Accessory dwelling units, or mother-in-law apartments, have become an important piece in the complex puzzle of a major housing crisis here in Utah.

While they provide income for homeowners and an affordable place to live for renters, some argue that they tax the infrastructure of the neighborhoods they’re in.

“Home prices are ridiculous. People can’t afford them, and the best way to offset those costs is to build an ADU," said Lehi Mayor Mark Johnson. "But there’s going to be two families in those homes, and that’s going to have double the impact on our sewer system, water, irrigation, and most importantly, on our transportation system."

To offset those costs, the city of Lehi has been collecting impact fees to the tune of nearly $5,000 for those who want to convert their basements into apartments.

Under a bill just passed by the state legislature, House Bill 462, they can no longer collect those fees. The bill is focused on expanding the availability of affordable housing and avoiding homelessness.

Johnson says existing citizens should not have to pay for new growth, and he says additional ADUs accelerate the need for more infrastructure.

“We see an increase of about 150 percent of the density of the number of people living in those units,” he said.

He says those increases come at a price.

“We still have to widen the roads when traffic increases, we still have to run a parallel sewer line when the flow increases, we still have to find and deliver water when the demand increases, so as public servants, we still have to respond to those demands," Johnson said. "The problem is now if no one is paying impact fees, that has to come from the existing citizens."

The debate over ADUs isn't limited to Lehi.

A proposed development of 14 homes in the Avenues area of Salt Lake City has received major pushback from a group of citizens.

Ivory Development is looking to build 14 homes with internal ADUs on a 3.2-acre vacant piece of property on F Street.

Chris Gamvroulas, the president of Ivory Development, says they built three homes with internal ADUs in Midvale as a test case. Now they are proposing this 14-home development that they’re calling Capitol Park Cottages.

To build, they’ll have to change the zoning. The current zoning only allows for large, expensive homes.

“We’re proposing to change that to add more homes and ADUs,” Gamvroulas said.

Ivory Development will be going before the Salt Lake City Planning Commission in the coming weeks to have the first public hearing on Capitol Park Cottages.

Not everyone is a fan. A citizen group called "Preserve Our Avenues Zoning" has made signage opposing the new development.

“We hear this a lot from opponents: 'We know there is a problem, this just isn’t the right place for it. Would you mind putting it somewhere else?'" Gamvroulas said.

Gamvroulas says he’s glad the legislature passed the bill and hopes this encourages more homeowners who are becoming landlords to get a business license.

“They should come out of the shadows and make sure their homes are safe, that they’re being good landlords,” he said.

The Lehi City Council will deliberate next week whether to increase utility rates or property taxes if needed to make up for the loss of revenue from impact fees.