The Utah government plans to initiate a pilot program aimed at selling select parcels of state-owned land primarily for the development of owner-occupied condominiums.
According to Steve Waldrip, the senior advisor for housing strategy under Gov. Spencer Cox, the program will target vacant and unused properties owned by the state, starting with land managed by the Utah Department of Transportation (UDOT).
During a recent panel discussion at the Urban Land Institute Utah’s 4th annual Housing Summit, Waldrip shared this new initiative.
“UDOT has prepared a list of available properties,” he stated.
“We’re doing this as a pilot, a very limited pilot, to start, and hopefully over the next six to 12 months, that very limited pilot will expand to include greater opportunities with other state agency lands.”
The program aims to utilize underutilized government properties that currently provide no value to the area’s tax base.
Waldrip clarified that the land selections would span the Wasatch Front and not be confined to a single city, like Salt Lake City.
“These aren’t parks,” he emphasized.
“These are dirt lots, these are parking lots.
These are places that are just sitting vacant and not providing any public benefit, either direction, either as a public amenity or in the private market.”
UDOT often owns parcels of land adjacent to its roads that remain unused.
In the past, some of these parcels have been repurposed for community gardens and other temporary uses, but Waldrip’s announcement signifies a new direction for these lands.
In an interview with Building Salt Lake, he elaborated that the program was made possible by House Bill 360, which allows the selling, leasing, or repurposing of surplus state properties for moderate-income housing.
According to the bill, moderate income housing refers to homes sold to owner-occupiers at prices affordable for households earning no more than 120% of the area median income for their respective counties.
These units must also be deed restricted for at least five years.
The legislation also defines moderate income housing as rentals priced at or below 80% AMI.
Waldrip further mentioned that HB360 permits deferred payments for the property until after project completion.
This approach ensures that UDOT and other public agencies can recover their investments in the land, albeit without any excessive financial gains.
“That windfall is going to be passed through to the public,” he remarked.
The primary aim of this pilot program is to facilitate the creation of for-sale condominiums.
However, depending on the size of the parcels, there may be potential for other housing types to be constructed on the land.
Waldrip noted that, given UDOT’s extensive ownership of land near transportation corridors, many of these parcels will serve as infill lots.
He stated, “The primary use of this will be for those infill pieces.
There will be projects that will have, potentially, townhomes and even some single-family housing on it, where appropriate.”
Nevertheless, it is worth noting that homes developed through this pilot program are likely to be adjacent to busy roads, as UDOT manages some of the most heavily trafficked routes on the Wasatch Front.
As of now, Waldrip confirmed that the pilot program remains in development, as the state government intends to limit the pilot’s scope and ensure a comprehensive review process prior to the launch.
Developers will be required to submit proposals, which the state will evaluate to ensure each parcel is used effectively.
The price for each land parcel will be determined through an appraisal that assesses the market value, allowing the state to sell the land at below market rates.
Waldrip added, “What we’re targeting is the delivery of units that are between 10-25% below market, and then preserving that value long-term so that the people who buy those units will be able to get the full value of what they purchased, but they won’t necessarily get a windfall of public funding.”
He expressed hope that the pilot program could commence by September.
“We’re going to keep it fairly limited.
We’re not going to open up to the entire world, because that would be far too difficult to manage on a pilot program,” he said.
“But we’ll have enough there that no one will have any concerns that there’s any favoritism going on.
It will be an open process that we can then use to establish the best value on each of those parcels.”
This initiative marks a new strategy for utilizing state land for housing development in Utah, following recent discussions about land use from both state and federal officials, including efforts by Utah U.S. Senator Mike Lee and former Congressman Jason Chaffetz to enhance housing availability through land sales.
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