Although The Point is well introduced in the first two Salt Lake Tribune articles discussed in the January 29th. 2024 UPDATES, much remains to be learned about the details. With that in mind, I will express some initial thoughts and speculation concerning how The Point might benefit from the ideas in “A Solution to Affordable Housing”. I believe the fact that this 600-acre project will be built in phases over many years on state-owned land and will receive a $165 million state infrastructure contribution opens up exciting possibilities for making a significant contribution to providing quality affordable housing for Utah residents and a blueprint for similar projects throughout the country.
It seems the Innovation Point Partners who hold the 99-year ground lease on the 98.5 acre central core phase do not expect to realize the affordable housing potential or even recognize the real housing needs this project can satisfy with a little added flexibility looking beyond phase one. Consider the possibility that the entire 3,300 new housing units planned in the initial phase could be affordable. If developers move away from defining affordable housing as being affordable to someone making 60 – 80 percent of the area’s median income and move toward defining affordable income as being housing that costs no more than 30 percent of owner’s or renter’s income. Directing sales efforts to employers who may have an interest in locating within The Point or owners of businesses who currently operate or plan to operate within easy commuting distance of the development, the developers could target specific affordable housing needs for employees now suffering from cost-burdened housing, no matter what their wages are now. Compounding the inadequate response to providing affordable housing as noted by the Tribune Editorial Board, is the fact that a key group of wage earners has not been considered – a costly omission that will have a negative impact on developer profits and the long-view public interest. Those forgotten wage earners are the workers who will build the homes, the high-tech office towers, public amenities, and future phase infrastructure as construction moves forward for many years. First completions will generate the need for a new army of maintenance and support personnel who will also need affordable housing.
Consider the possibility of utilizing some part of the 500 acres planned to follow phase one which will also benefit from the $165 million infrastructure improvements made possible by the state. This would create an opportunity for the type of housing described in Chapter 14 of A Solution to Affordable Housing. It may even open up a path to recruiting the rapidly expanding company manufacturing the homes discussed in Chapter 14. If the workforce can be assured of affordable housing and easy commutes to construction sites, they will be more productive and have less impact on initial residents, office workers, retail employees, and their customers.
Based on the current rumors surrounding the possibility of NHL, MLB, and NBA stadiums of the future, it is a pretty safe bet that the signature elements of phase one based on public input do not see such huge sports facilities as suitable substitutes for the 3,000 seat entertainment facility or a good neighbor for the other elements listed. If such projects have potential in distant corners of the project site, they would have major construction labor demands.
I must admit to very limited knowledge of any project of this scope to be built on 600 acres of land owned by the state and made available to private developers under terms of a series of 99-year ground leases. My first impression is that this unique project may lend itself to accelerating sales and construction schedules and lower the cost of production. It also seems very compatible with 15-year employer/employee partnerships functioning as sub-leases. Although my 99-year crystal ball is a bit foggy, I expect that early product will not be a perfect fit for the residents and businesses at some point in the future. Individual employer/employee partnerships would be well suited to repurposing an aging housing stock to accommodate the demographics that evolve in something like 15-30 years in order to capture the benefits of new design and technology.
My research in writing A Solution to Affordable Housing included a 12/20/2022 Atlantic Magazine article by Jerusalem Demsas entitled “The Homeownership Society Was a Mistake”. When the article was published it made a well-reasoned argument that it was impossible to reconcile the need for homes to increase in price to build homeowner wealth while remaining at prices that stay affordable for new owners and renters. The article cautioned that advice that amounts to “buying low and selling high” makes little sense when the asset in question is the home you live in. It contended that people should not assume they can buy at the right time, in the right place, get a fair deal on financing, and not be excessively vulnerable to market fluctuations The personal example I included in Chapter 12 can be criticized for containing almost all of the best-case elements of success outlined in the Atlantic article, but it was included as a warning that success was a matter of some skill and lots of luck.
Since the problems and possible solutions put forth in my book are intended for the real world of the lenders and landlords we see today, they only apply to the development of single-family homes that developers at The Point intend to sell outright, land included, following phase one. I would expect the housing built on 99-year ground lease property to offer the possibility of a lower rate of home price inflation ( a test of the old saying “land appreciates, buildings depreciate”). Adjusting the employer/employee partnerships to keep partner benefits balanced is certainly possible as long as employers charge rent of no more than 30 percent of an employee’s wages together with a “no renter abuse” lease, and employees expect no cost of living raises. The underlying message is that The Point may be able to shift away from understanding housing as an investment for those who occupy or build that housing, and toward treating it as consumption. Employees of businesses in The Point and neighboring communities should be offered housing that is worth the use they get out of their homes. Policymakers should focus on making possible affordable and diverse housing types able to satisfy the needs of people at every income level and stage of life. If The Point can deliver quality housing that provides shelter, access to good jobs, and education, in a safe and healthy community, sustainability will be assured.