New state loan fund and a regional tax‑increment tool aim to spur affordable for‑sale housing
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Summary
Speakers at a Utah League webinar described House Bill 492 (a repurposed $100 million revolving loan fund for infrastructure) and House Bill 507 (creating a Regionally Significant Development Zone that consolidates several tax‑increment tools and sunsets older programs by 2028), and outlined how cities can pair those tools with development agreements to support owner‑occupied starter homes.
Carson Eilers, policy director at the Utah League of Cities and Towns, told a March 26 webinar that the 2026 Legislature repurposed roughly $100 million into a revolving loan fund he called the State Housing Infrastructure Partnership Program to help local governments and builders finance system‑scale infrastructure needed for housing. "They repurposed some existing money, a $100,000,000 into a revolving loan fund to help both spur and incentivize more partnership between local governments and the development community," Eilers said. The loans are intended to be well below market and will be administered by a five‑member board with discretion over rates and criteria.
Eilers said the program is not a new appropriation but a reuse of money previously set aside in transportation‑linked accounts; applicants will be judged competitively and loans are capped (individual loans no greater than $20 million). Eligible uses he described include large system investments—water tanks, sewer lift stations and other infrastructure that can serve multiple developments—rather than routine curb‑and‑gutter work.
The webinar also covered House Bill 507, which creates a Regionally Significant Development Zone (RSDZ). Under HB507, local governments can propose projects for regional designation that pool tax‑increment capture for infrastructure and related costs. Eilers explained the RSDZ is a consolidation and expansion of earlier boutique tools (HTRZ, FIS and HOPs), and that projects using those older tools must be in place before a 2028 sunset to continue under their prior rules. "If you have an HTRZ or a FIS or a HOPs that was created prior to that 2028 January deadline, then you will continue to operate under the existing statute," he said.
Eilers advised cities to prepare for additional rulemaking and administrative detail. He said the new loan board will set application criteria, including timelines showing a project will accelerate housing production, plans for deed restrictions where competitive, and a required repayment plan (cities and developers can propose secured revenue sources such as impact fees, property tax revenue or special assessments). He added that the Legislature also provided a Salt Lake County‑specific infrastructure grant program that adds bonding capacity and is administered separately for Salt Lake County projects.
Why it matters: municipal officials and builders at the webinar described the new fund and the RSDZ as tools to lower the upfront infrastructure barrier that can prevent for‑sale housing from reaching the market, particularly in places that want owner‑occupied starter homes instead of investor‑owned rental conversions. Eilers urged cities to watch for administrative rules and to prepare competitive applications that pair local commitments with developer proposals.
Next steps: Eilers said additional guidance and application links will be posted when rules are final. Webinar hosts promised follow‑up materials, toolkits and a white paper summarizing HB507’s structure and the state's intent for regional projects.
