The Road Home is seeking assistance from the Salt Lake City Community Reinvestment Agency (CRA) to transform a parking lot in the Central 9th neighborhood into new deeply affordable housing units. A proposal regarding the redevelopment of Palmer Court—a permanent supportive housing facility located at 999 S. Main St.—is set to be presented to members of the Salt Lake City Council, who will act as the CRA board during their meeting this week.
The Road Home, which currently operates Palmer Court, aims to redevelop the remaining vacant space on the property by constructing a new facility named the Gardens at Palmer. According to a staff report, the existing Palmer Court, which was originally a converted motel, would eventually be demolished in a second phase of development.
The proposed new building will consist of 187 housing units designed for families and individuals earning at or below 30% of the Area Median Income (AMI), which is classified as “deeply affordable.” With Salt Lake City’s current AMI at $122,700, a family of four would need to earn less than $36,800 annually to qualify for these units.
Deeply affordable housing serves as a critical resource for those attempting to escape homelessness, making the need for such units especially pressing in and around Salt Lake City, where options at this price point are currently scarce. The staff report emphasizes that the Palmer Court site is underutilized, with approximately 60% of the land being allocated for parking lots or landscaping.
If approved, the plan would allow all residents of Palmer Court to relocate to the new Gardens at Palmer, after which the existing facility would be demolished and redeveloped. This could potentially occur as early as 2028, provided all processes go smoothly.
However, to enable this redevelopment, adjustments to the terms of an existing loan for Palmer Court are necessary. Originally, when the project was initiated in 2008, the CRA (then functioning as the Redevelopment Agency of Salt Lake City) approved a $3 million forgivable loan to assist with the development of Palmer Court. This loan is scheduled to mature in 2033.
Currently, the loan terms allow for $300,000 in annual loan forgiveness, starting in 2023, provided that Palmer Court maintains 60 rooms designated for Single Room Occupancy (SRO) short-term rentals available on a weekly basis. These SRO units were established to compensate for the CRA’s decision to demolish two SRO hotels at the current site of the Aster Apartments located at 265 S. State. Residents of those hotels were given priority access to rooms at Palmer Court once it was finished, as indicated in the staff report.
To successfully build the Gardens at Palmer and redevelop the existing Palmer Court building, the CRA board must approve modifications to the existing loan terms. The staff report mentions that the weekly rental model for SRO units may complicate funding strategies, stating, “SRO units rented on a weekly basis may cause issues if transferred to the new development, due to incompatibility with LIHTC regulations and Project-Based Voucher requirements, which mandate initial minimum lease terms of six months and one year, respectively.”
In response to these challenges, The Road Home has requested a change that would transition the short-term SRO units from weekly rentals to long-term leases. This change would apply to both the existing Palmer Gardens units and the upcoming units at the Gardens at Palmer. While initially designed for short-term occupancy, the average length of stay for a tenant in an SRO unit is typically over three years, according to the staff report.
The modification is essential for unlocking critical capital and operating subsidy resources necessary for the project’s success and to ensure optimal operational viability for the new facility. The change would also enhance existing operations at Palmer Court by allowing The Road Home to fill vacant units with residents who have vouchers.
The focus on deeply affordable housing aligns with Salt Lake City Mayor Erin Mendenhall’s commitment to addressing housing shortages, particularly as highlighted in her 2025 State of the City address. Current metrics indicate a significant deficit in achieving the city’s goals for deeply affordable housing, as outlined in the Housing SLC plan.
Although Salt Lake City has moved forward with a substantial amount of affordable housing categorized at or below 80% AMI, it falls significantly short of its targets for deeply affordable units. The subject of loan term modifications will be discussed during the upcoming CRA meeting at the Salt Lake City and County building, where board members have the authority to vote on the proposed changes.
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