Report To The Utah Legislature - A Performance Audit Of The Division Of Housing And Community Development - 2012 Page 22
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33HCD Should Develop Guidelines
For Internal Projects
While within the division’s rights, purchasing the South Salt Lake
property has tied up over two million dollars of state low-income
housing funds for nearly five years. By establishing guidelines for
internal projects, HCD could have avoided some costs and concerns
arising from the project. Since approval of the plans for the project
was never granted, the property has been considered land-banked,
which is a legitimate practice in the real estate development
community. However, land-banking is less common in low-income
housing development and the Legislature may want to consider if the
use of land-banking is consistent with legislative intent.
Some Costs Could Have
Been Avoided with Guidelines
The division has developed an OWHLF Program Guidance and
Although rules exist to
Rules manual that is used to evaluate projects proposed by private
guide private or
developers. However, these rules are not specifically written to
nonprofit development,
evaluate HCD’s own land purchases, and were not fully applied to the
there are none to guide
HCD’s purchasing of
South Salt Lake land purchase. By creating rules for evaluating their
land for its own
own projects, HCD should be able to avoid unnecessary costs, better
projects.
align projects with legislative policy, and maintain goodwill with those
in the low-income housing community.
Statute for the distribution of OWHLF monies requires that the
executive director “establish the criteria with the approval of the board
by which loans and grants will be made”. The OWHLF Program
Guidance and Rules manual satisfies this requirement. These rules cap
the amount of loan monies for any one project at $1 million and
require that the money be leveraged with private funds. The purchase
of the South Salt Lake property did not satisfy these rules which were
OWHLF rules
intended for evaluating the projects of private developers rather than
customarily cap
funding for a single
HCD’s in-house development projects. Rules for evaluating HCD’s
project at $1 million.
own land purchases would be different because these developments
would occur in stages, with a private developer seeking OWHLF
funding after much of the planning, designing, zoning approval, and
property purchase was complete.
A Performance Audit of the Division of Housing and Community Development (February 2012)
12
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