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Builder describes starter‑home pilot: smaller lots, 10‑year owner‑occupancy deed restriction and priority presale
Summary
Jed Nielsen of Nielsen Homes described a pilot to build lower‑cost starter homes (roughly $350k–$450k) in Weber County under the governor’s initiative; the model mixes smaller detached homes in market communities, includes a 10‑year owner‑occupancy deed restriction and presale priority for first responders, teachers and active military.
Jed Nielsen, president and CEO of Nielsen Homes, briefed the council on a pilot the company carried out under the governor’s starter‑home initiative. Nielsen said Utah has become one of the least affordable states for first‑time buyers because median house sizes and prices have risen while supply is constrained.
Nielsen described the product mix: single‑ and two‑story detached homes with footprints in the ~1,100–1,400 square‑foot range, landscaping and one‑car garages included in sales prices, and unfinished basements or optional future garages to allow buyers to add “sweat‑equity” improvements later. He said the first phase encountered a high water table so basements were omitted for those lots but could be included in other phases. Sale prices achieved in the pilot were roughly $370,000 for smaller plans and about $400,000 for two‑story plans; Nielsen said the homes sold quickly once marketed.
To reduce the risk that institutional investors convert the homes into rentals, the development includes a recorded 10‑year deed restriction (owner‑occupancy requirement) enforced through the community’s covenants and monitored by the HOA; purchasers also signed affidavits. Nielsen and development staff explained that HOAs traditionally enforce occupancy and maintenance provisions and that the county retains auditing authority, if desired. The developer also implemented a priority presale window for target buyers — teachers, first responders, active military — to increase the chance homes go to primary occupants.
Nielsen told the council that the pilot required collaboration among local government (to grant density bonuses), builders (to accept lower margins), lenders (to support financing) and sellers of land who accepted lower land prices tied to the approved density. He said the project shows that a mix of smaller homes, integrated within market neighborhoods rather than segregated into one pocket, can be attractive and maintain neighborhood quality, provided landscaping, architectural variety and HOA maintenance are included.
Ending: Nielsen offered to share the playbook with Provo staff if the city wishes to pursue starter homes, and council members requested additional detail about land‑cost mechanisms and deed‑restriction monitoring. No council action was taken at the work session.
