Report To The Utah Legislature - A Performance Audit Of The Division Of Housing And Community Development - 2012 Page 15
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33Chapter II
Policy for HCD-Driven Projects
Needs to Be Strengthened
The Division of Housing and Community Development (HCD or
division) has detailed guidelines to evaluate low-income housing
projects proposed by private developers, yet lacks policies to evaluate
HCD’s nontraditional
its own in-house development projects. In 2007, HDC used the
approach in land-
banking should have
Olene Walker Housing Loan Fund (OWHLF or fund) to purchase
had internal guidelines
6.9 acres of land in South Salt Lake with the intent to develop housing
to direct it.
for homeless veterans. We found nothing to indicate that this
purchase was contrary to any laws or the division’s authority.
However, it was a non-traditional approach compared to HCD’s
routine use of private developers that does not appear to have limited
OWHLF’s ability to contribute to other projects. To better align
department practice with legislative intent and avoid unnecessary
costs, HCD should create guidelines for projects where HCD’s
participation goes beyond that of a funding source.
The South Salt Lake City Council did not support more property
being taken from the city’s tax roll and so refused to approve the plans
for the property, resulting in the project not moving forward. Since
2007, HCD has been holding the land in reserve, so the funds
invested in the property are considered to be land-banked. Land-
banking is an unusual practice with this particular fund (the HOME
fund), but is a common practice of other federal housing funds,
Utah Code does not
educational institutions, and private developers. Utah Code does not
forbid land-banking,
appear to forbid the practice for low-income housing, but is
although it delays the
ambiguous on the matter. Land-banking delays funds from use and
use and leveraging of
funds.
leveraging, while still retaining the value of the asset. The Legislature
may want to consider if and how land-banking for low-income
housing aligns with legislative intent.
South Salt Lake Property Purchase Was
Unusual, But Within Statutory Guidelines
Except for the purchase of and intent to develop the South Salt
Lake property, HCD uses the private sector and nonprofit
Office of the Utah Legislative Auditor General
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