It’s widely acknowledged that we are in need of more affordable housing. Here’s one partial solution already in play, explained with a real-life example in Murray. The redevelopment of blighted land helps to finance affordable housing. The subject might seem boring, but it’s not. So, keep reading.

Birkhill Apartments and Lofts

In 2005, Murray City created the Fireclay RDA zone. RDA stands for Re-Development-Area (or agency). Fireclay is 99.5 acres, running west of State Street to the Union Pacific tracks, and from Big Cottonwood Creek in the north to 4500 South. The area was determined to be blighted and in need of redevelopment. 

Fireclay is one of five RDA zones in Murray (another example is the smelter site, where Costco and IHC now sit).

To get developers interested in a property, a city will deem an area an RDA zone and determine a base property tax rate for this vacant and blighted property, then freeze the property tax for the number of years the zone is being redeveloped. In the case of Fireclay, this tax-freeze is 19 years.

Hooper Knowlton is the developer of Birkhill Apartments. This development is in the Fireclay RDA zone (though he is not the only developer at work in Fireclay), and he gave a ballpark explanation:

“When we bought the 6.2 acres where Birkhill sits now, it was deemed vacant and contaminated property. We spent half a million to remediate lead and arsenic from the ground. At that time the property taxes on the land were about $50,000 per year.” 

Knowlton said they started building and leasing apartments. As the property went up in value, the property taxes stayed frozen. “Now about a decade later, the property taxes would be, say, $500,000 per year. But they will stay frozen at $50,000 until the redevelopment window is closed, in this case 2033.”

“The difference (the tax savings) is called the ‘incremental tax’ and that is what draws developers, like me, to redevelop an area,” Knowlton said. “This increment provides profit for the developer, but certain percentages of the incremental tax are required by federal law to be used for things like funding for nearby school districts, mosquito abatement, and some of the money is reinvested to support affordable housing, often in the form of grants or preferential loans to help build the housing.”

It should be noted that RDA incremental tax funds are not the only source of monies used to support affordable housing. There are additional local and federal programs focused on the issue that are not highlighted in this article.

Affordable housing at Birkhill

“There is satisfaction in knowing you’re providing a Class A product with great amenities, but more importantly, we provide housing security and safety for families, children and also single adults who have limited and lesser incomes,” Knowlton said regarding the Birkhill development.

In the existing Birkhill Apartment project, out of 307 apartments, 278 are deemed affordable, and the rest rent at market rate. The development has been leasing apartments since 2017 and is at a 95% to 97% occupancy rate.  

The Birkhill Apartments are a blend of socioeconomic housing. No one building, or even one particular apartment, is deemed “affordable” with minimal finishes or landscaping or less access to amenities. All apartments in the development are equal and the development is well-maintained and thriving.

“The driver in this particular development is TRAX,” Knowlton said. “We are 800 feet from the platform and people can easily get from here to downtown or Draper without a car, and the IMC is a stop away.” 

The apartments have secured parking with high-speed gates for safety, but Knowlton believes about a quarter of residents use TRAX as their main mode of transportation.

“Here’s an affordable housing success story,” Knowlton mused. “We have a single mother with her son at Murray High. She qualifies for affordable housing because she works maintenance at $32,000 per year. They live securely and affordably for three to five years with subsidized rent. In the meantime, she takes TRAX up the university and finishes her college degree and gets a better job. 

“Now she makes $65,000 per year and she pays the market rate for her apartment. She stays because she likes her home,” Knowlton continued. “The housing stability, meaning she has a safe place she can afford, for her and her children, allowed her to get a better job and better education. Her child, who has grown up feeling secure, can also concentrate on his education, and get a good job.” 

Final phase at Birkhill - Affordable housing for older adults (aged 62 and older) 

There is one undeveloped parcel of property in the Birkhill development, soon to become the Birkhill Lofts.

When completed, it will provide 67 affordable housing units for older adults aged 62 and older, in studio, one-bedroom and two-bedroom units. Construction is slated to begin by the end of 2024.

Birkhill Lofts will have amenities desired for older adult living such as a community kitchen and meeting spaces for entertaining, workout facilities, accessible floor plans and easy parking. 

The building will contain 10 units to house those older adults with a 50% AMI, 42 units for those with a 45% AMI, seven with a 35% AMI, and 14 with a 25% or less AMI. 

At a 25% or less AMI (though levels fluctuate, this is approximately $25,000 annual income) the occupants would be considered nearly homeless, and as such, the complex will be equipped to provide social services and counseling through First Step House, with no cost to the tenant. 

“In the 1970s and ’80s subsidized housing got a bad rap,” Knowlton said. “The developments were poorly built with minimal landscaping. They weren’t maintained and kept in compliance. They weren’t an integrated mix of socioeconomic housing. 

“This development is not a homeless shelter,” Knowlton continued. “This is quality housing for low-income seniors, with no stigma. These units will provide secure senior housing and services. The development grounds and units are inspected at least twice a year, with proper notice to the tenants, to be sure the housing continues to be in compliance.”

How to qualify for affordable housing

There is a bit of a process to qualify to lease an affordable unit, which will be explained in more detail below. But applicants don’t need to sweat the details on their own. They can simply go into the Birkhill Leasing Office (or any leasing office at a development that offers affordable options) and a leasing agent will help with the application process. The fee for application is about $25.

The process is like qualifying to buy a home, meaning proof of income and bank statements will be required. Leasing agents help the prospective client work through the process and applicants must requalify for the subsidy each year.

Qualification for subsidized housing is based on the Average Median Income (AMI) of a family. So, based on a family of four, the AMI in 2023 in the SLC Metro area (which includes Murray) is $115,000. Click on QR code to see the official chart. https://www.saltlakecounty.gov/regional-development/housing-community-development/apply-for-grant-funding/income-guidelines/.

The amount of an applicant’s qualifying income will determine how much they will pay. 

“In Salt Lake County, let’s say a one-bedroom at market rate is running $1,300 to $1,400 per month. A renter would pay market rate if they had a 90% AMI. But if they qualify at, say, 30% AMI, that same one-bedroom would rent for $475 per month. Higher AMI, maybe $825 per month,” Knowlton explained. 

There is a real need

Murray councilmembers and RDA staff are excited for this last phase of the Birkhill project.

Paul Pickett, District 1 councilmember, said, “This development is in my district and we have much need because with rising housing costs, many seniors are priced out. We are looking forward to it.”

Rosalba Dominguez, former District 3 councilmember, said. “This type of development is honorable, serving this transitional, and at times underserved, demographic. I wish more developers would come forward with projects like this.”

Phil Markham, Murray City community and economic director, said. “There is a screaming need for affordable housing, particularly affordable senior housing across the whole Wasatch Front. We are very excited to help finance this project in Murray.” λ