Utah’s home prices are on a multiyear climb and well-heeled buyers, at least, are still snapping up houses. You would think these would be heady days for the state’s homebuilders.
More and more Utahns can’t afford to buy and many struggle to pay rent. The state, he and others say, is in dire need of more affordable options.
Unless conditions change, Ivory also sees trouble looming for the state’s economy and for his homebuilding business, which his family has run since 1983. Even at a time when Ivory Homes is posting record revenues, Utah’s largest homebuilder is shifting toward building more condominiums and town houses, traditional homes with smaller yards, and multiunit apartment complexes.
Big picture, Ivory sees himself as siding with future generations and as part of the solution to one of the state’s most vexing economic and policy challenges.
But plenty of existing homeowners see Ivory Homes as a problem all its own — a homebuilder eager to cash in by packing people into high-density developments that, in some cases, threaten to overwhelm their tranquil communities.
Since Holladay residents rose up to stop a huge Ivory project at the site of the old Cottonwood Mall last fall, company officials have taken up tougher tactics in battling grassroots groups opposed to their developments.
Clark Ivory, the firm’s 54-year-old CEO, doesn’t see it as a property-by-property battle. He’s also thinking more broadly. He’s speaking out on the issue of affordable housing generally and says he is “pushing on all fronts” to ease the trend. He’s backed a new program to help teachers and police get homes and is funding a prize seeking the most innovative ideas in affordable housing design, policy and financing.
Ivory Homes soon will announce it has built more than 20,000 houses in Utah and for decades, the company’s model has been to move buyers up from starter homes to pricier places, usually on bigger lots. But now, its CEO says, its focus is “workforce” housing.
Yet as 2019 unfolds and monthly home sales for the company have come in higher than expected, Ivory Homes “has no alternative but to start to slowly raise prices,” Ivory said.
(Christopher Cherrington | The Salt Lake Tribune)
Michael Parker, senior economist and vice president for public affairs for Ivory Homes, called the price hikes “the antithesis of what we’re trying to accomplish, but we’re stuck.”
“Pricing has got to level,” Ivory added last week in an interview at his curio-filled office in Murray. “If we don’t change, we’re going to be struggling.”
Clark Ivory bought and took over Ivory Homes from his father, Ellis, in 2000 and is widely credited with seeing the U.S. real estate crash and Great Recession coming as early as 2005.
He warned at the time that speculative homebuying threatened the nation’s economy while in his early days as director of the Salt Lake City branch of the Federal Reserve Bank of San Francisco. The family company even began requiring buyers to sign pacts not to resell their homes for at least a year.
Ivory said he now views the housing affordability crisis in Utah and nationally with similar alarm — not least for its potential impact on the company’s nearly $500 million in yearly sales.
“We want to maintain the momentum in our business,” he said. “With interest rates on the rise over the next couple of years and with costs going up, we have to figure out new solutions.”
Last May, when the University of Utah’s Gardner Policy Institute first issued a seminal study highlighting a shortage of affordable homes in Utah, Ivory backed its findings and joined Salt Lake Chamber officials in campaigning on the issue.
He has also blasted “not in my backyard” attitudes by some residents against denser housing, while also lamenting efforts to torpedo projects by using the state’s referendum process, as happened in the Cottonwood Mall case.
Ivory Homes has been at the center of controversy of late. Residents in several communities who have opposed some of its high-density developments declined to comment, saying they feared retaliation.
The company’s recent fight to build a massive housing and commercial project at the old Cottonwood Mall site in Holladay went all the way to the Utah Supreme Court. And when the court ruled last fall against Ivory Homes and in favor of a grassroots group called Unite for Holladay, Ivory went so far as to file a rare and unsuccessful motion asking the justices to rethink their reasoning.
The company was stung by the failure of its bid to build Holladay Quarter, a $560 million mixed-use development it had proposed with Utah-based builder Woodbury Corp. at the Cottonwood Mall site, near 4800 S. Highland Dr.
After nearly two years of public hearings, the companies won city approval to build the 57-acre project, which was to include several office towers, shops and restaurants along with a 775-unit high-rise apartment complex and 210 single-family homes, luxury condominiums, brownstones and manor houses.
Clark Ivory warned at the time the high court’s ruling could harm the cause of affordable housing statewide, calling it “zoning by referendum.” He acknowledges that the Holladay project’s housing was “not super affordable,” but said the company had hoped “to deliver quality housing in a new approach.”
And after first leaving open the possibility he would pursue a revised version of Holladay Quarter, Clark Ivory said earlier this month that Ivory Homes has officially pulled out. The cash the company had invested in the project, he said, has since been reinvested in buying land for three other developments.
There are signs Woodbury Corp. may still be pursuing a project at the mall site, though with fewer residential units.
A reprise of the Holladay battle has been underway for months in Cottonwood Heights over a separate Ivory Homes proposal for an apartment complex at 6784 S. 1300 East, on a piece of land known as Walsh Farm.
Some neighbors oppose a city ordinance passed in connection with the project, fearing it could allow high-density construction across Cottonwood Heights. And as the dispute has progressed, both Ivory Homes and a grassroots group organized to block the proposal appeared to have drawn lessons from the Holladay conflict.
The opposition group in this case is called Unite for Cottonwood Heights. Earlier this year, organizers circulated a petition seeking to gather enough signatures to put the city zoning ordinance to a vote at the polls.
Jared Crocker, an organizer with the group, said Ivory Homes ran its own petition drive in Cottonwood Heights at the same time — an assertion the company confirmed, though it wasn’t trying to get anything on the ballot.
That second petition, Crocker said, spawned confusion. The group’s signature gatherers were repeatedly rebuffed by residents who thought they’d already signed on.
In an April 25 letter to elections officials with Salt Lake County and Cottonwood Heights Recorder Paula Melgar, an attorney for Unite for Cottonwood Heights alleged the Ivory Homes petition amounted to “unlawful interference that confused the residents of Cottonwood Heights,” resulting in far fewer signatures for the group’s referendum petition.
Unite for Cottonwood Heights sought an extension in its petition drive from county officials but was denied. Crocker said members are now reviewing legal options.
Parker, senior economist at Ivory Homes, said the Holladay case led the company to up its game in Cottonwood Heights, with more public outreach in pressing for support, including the petition effort.
“We’re not going to be surprised anymore,” Parker said. “We’re just going to plan every time that someone is going to try to derail us and have a toolkit in place in case that happens.”
But Parker said Ivory Homes’ fight over affordable housing goes far beyond a few contentious projects. He noted that Ivory has put nearly $1 million in charitable donations toward the cause so far, adding that Clark Ivory “is on a warpath when it comes to affordability.”
Ivory Homes launched a new line of more affordable homes for nurses, teachers, construction workers, cops, firefighters and members of the military — with added incentives to help them with credit, closing costs and buying appliances.
The company’s Utah Workforce Housing Priority, launched in February, will reserve about 150 of its newly built homes in 19 Utah cities. Ivory Homes will also provide landscaping and $2,000 toward closing costs or appliances.
Gov. Gary Herbert praised the set-aside as an innovative approach “to ensure those who make our communities great can afford to call them home.” Salt Lake City recently put $100,000 toward a similar but unrelated workforce housing program.
Ivory Homes already has a waiting list of more than 500 families who want to participate, Clark Ivory said.
And while the program does offer much-needed relief to some would-be homebuyers with earnings just below Utah’s median wage levels, housing advocates say Utah’s need for affordable housing is greatest for those at much lower incomes. Those ultra-affordable projects, though, are much harder to finance and build.
Through his family foundation, Clark Ivory also created the Ivory Prize for Housing Affordability, a $200,000 national award to be shared each year among those offering top innovations in housing design, financing and policy that bring costs down.
Prizes went to Factory OS, a San Francisco company pioneering modular building techniques for apartments; another San Francisco firm called Landed, which helps public school teachers with down payments; Home Partners of America, which offers lease-purchase programs to buyers struggling with credit; and The Alley Flat Initiative, which successfully pushed a new zoning approach in Austin, Texas, for so-called mother-in-law apartments.
Ivory said the company will take an open-source approach to these and other housing innovations generated by the prize, by publicizing them and offering them to the wider industry in hopes of improving affordability.
“It’s been a great crowdsourcing thing for us,” Parker said. “The question now is, how do we use our market power here to further these ideas?”
The company continues to press for more robust job training and clearer career pathways into Utah’s construction sector, hoping to bring a wave of new workers into the field to alleviate an ongoing and costly shortage of skilled labor.
“Clark Ivory and the entire Ivory team have been steadfast in not only bringing awareness to our state’s housing affordability issue, but also problem-solving to find real, attainable solutions,” said Derek Miller, president and CEO of the Salt Lake Chamber.
With a portfolio of nearly 200 floor plans for its homes already, the company is unveiling a new line of smaller, more affordable town homes and attached housing this year. It’s also introducing new housing development layouts that allow for higher residential densities and more dwellings per project, Ivory said.
“That doesn’t mean that we won’t still build big houses on bigger lots,” the CEO said. “We’re probably doing more really expensive homes this year than we’ve done in a long time.
Ivory added: “But we have an appetite to find every opportunity we can that will present us with affordable options.”