Affordable housing solutions for young Utahans offered by college students

This story is part of The Salt Lake Tribune’s ongoing commitment to finding solutions to Utah’s biggest challenges through the work of the Innovation Lab.

Kevin Fagundo Ojeda and Cole Knuckles had just one night to find a solution to one of Utah’s most enduring problems: the affordable housing crisis.

They took on the challenge at Hack-A-House, a 24-hour online hackathon that took place in late September. For the uninitiated, a hackathon is usually a competition related to the development of computer software, mobile apps, operating systems, and other development projects. In this case, Ivory Innovations, a nonprofit organization at the University of Utah’s David Eccles School of Business, invited students from across the country to brainstorm ideas on how to address one of three issues: homelessness, environmental issues and building technology, or sustainable renting and affordable home ownership.

Other universities joined as co-sponsors, including the University of California at Berkeley, the University of Arizona, Harvard University, the University of Denver, and Howard University.

Fagundo Ojeda and Knuckles are students at the University of Utah. Fagundo-Ojeda, 30, is a graduate student in urban planning and architecture, and Knuckles, 21, is completing his undergraduate degree in finance.

The Salt Lake Tribune interviewed the couple and other Utah students about their projects, experiences with housing challenges, and what they would like to see differently in leaders.

Reduction of additional costs

Fagundo Ojeda and Knuckles’ project focused on reducing utility costs for low-income Utahns.

They found that the burden of utilities, which is the amount of money tenants spend on utilities as a percentage of their rent, plays a large role in housing affordability. Her goal was “to help people not fall through the cracks,” said Fagundo Ojeda.

So they created a “rainy day fund” for those struggling to pay utility bills — including water, internet, garbage collection, electricity and heat.

The fund would be supported by a progressive non-profit tax. They estimated that taxes alone could finance most of their rainy day fund, but also noted that additional funds could come from increased taxes on excessive water use.

Affordable housing is not just an abstract topic for Fagundo Ojeda and Knuckles.

Fagundo Ojeda wanted to live off campus, but found that an apartment in downtown Salt Lake City, including utilities, would cost almost $2,000 a month. Even if he lives in one of America’s affordable housing units, about 60% of his income goes into rent, he said.

Knuckle lives with his parents. “If I’m working full-time and going to school,” he said, “I just don’t see moving out with the rent right now as a viable option for me.”

(Trent Nelson | The Salt Lake Tribune) Cole Knuckles, a University of Utah student, on Friday, November 4, 2022 in Holladay.

“I’m hopeful about some things,” Knuckles said, “but I think there’s a huge demographic that I used to be a part of that just doesn’t really see these issues.”

Improving awareness and empathy for affordability, Knuckles said, “would be the best way to make these plans politically enforceable.”

“I don’t think these ideas will translate into electoral politics,” said Fagundo Ojeda. “I’m very optimistic about Gen Z and the things Gen Z can do.”

However, he continued, “There are still a lot of people who are opposed to new ideas.”

Down Payment Financing

Ian Cahoon, 23, Sydney Donovan, 20, and Mario Ayala, 33, looked at home ownership affordability.

They wanted to help buyers “buy a home in an area where the schools are better, or the neighborhood is better, or the actual building itself is better,” Ayala said.

Saving enough for a down payment is both difficult to achieve and crucial in determining the affordability of monthly mortgage payments.

In Cahoon, Donovan and Ayala’s plan, a homeowner would contribute just 5% and an outside investor would contribute 15%. The owner would then live in the home for five years, and over that period the investor would receive a 7% return on investment while the owner would receive the remaining profits.

“The biggest risk I think,” Cahoon said, “is the person not being able to make the payments or the house going into foreclosure.” Or there’s a natural disaster, “where the homeowner loses value in the house. But that also makes the investment riskier for that investor.”

Reining into the vacation rental market

Emanuel Garcia Flores, 21, Nolan Martin, 20, and Jeremiah Munn, 25, recognized that vacation rentals posed a major threat to housing affordability.

Munn noted that other cities have attempted to restrict vacation rentals by imposing restrictions, but this solution only resulted in “illegal short-term rentals.”

“What we ended up with was a fund that would allow Utah to tax vacation rentals and curb vacation rental demand in the state,” Munn said. “And create an affordable housing fund, specifically for people with an average income of 60% and below.”

Under their proposal, they would tax short-term rental gains at 20%. Those taxes would then be used to fund new affordable housing projects in tourist towns like Park City.

(Francisco Kjolseth | The Salt Lake Tribune) A home for sale in Salt Lake City on Tuesday, April 27, 2021. Although housing demand in Utah has reached historic highs, home sales along the Wasatch frontage fell earlier this year due to a lack of supply return . Meanwhile, single-family home prices continue to rise as razor-thin inventories dampen sales and buyers seek cheaper alternatives like condos and townhouses.

“I think we’re going to have to see some changes,” Martin said. “Especially in a place like Park City, that’s high demand with low supply.”

The three students also noted a generation gap and felt lawmakers might be cautious about taking “too big a step”.

Ultimately, they were optimistic about the ideas generated during the Hack-A-House and about their own housing future.

“Do I see myself as a homeowner? I want to say absolutely,” Garcia Flores said. “I mean, who doesn’t want to own a home?”

It’s just that this will likely be a lot harder to achieve than it was for previous generations.

Editor’s Note • The Clark and Christine Ivory Foundation is a donor to the Salt Lake Tribune’s Innovation Lab. Affordable housing solutions for young Utahans offered by college students

Justin Scacco

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