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Utah City Works Hard To Increase Opportunities For Home Ownership

May 10, 2004

Nestled between the majestic Wasatch Mountains and Utah Lake, the city of Provo (UT) is known for its beautiful and natural setting. Provo is also recognized for its entrepreneurial and pioneering spirit, its low crime, and as the home of Brigham Young University.

Similar to many college towns, Provo enjoys a unique demographic and population spread. Out of a total population of 112,000, more than 37,800 of those residing in Provo are college students attending either Brigham Young University or Utah Valley State College in neighboring Orem (UT). The city is also experiencing a rapidly expanding population of first-generation Americans. Many from each of these groups traditionally have not had access to home ownership and the associated benefits.

In the last several years, local elected officials and other community leaders have sought to foster greater opportunity for home ownership, especially in the historic central neighborhood areas of the city.

While Provo's overall owner occupancy rate increased from 40 percent in the 1990 census to 42 percent in the 2000 census, the large majority of housing properties in the Pioneer neighborhoods were not owner-occupied. Single family housing costs within this area remained high due to homes valued as rental properties. Consequently, many traditional single-family residences had been converted over time and sold as duplexes or triplexes. These significant neighborhoods were experiencing a new out-migration of core families, as people left the central city area and moved into less expensive, newly constructed housing in surrounding areas. The loss of long-term families and residents led to challenges for area schools, churches, and community organizations.

In the Fall of 2001, Provo city created a new program that has now become widely known as the "80/20 Program." Intended to turn the tide toward homeownership in six specific central neighborhoods, this program has helped many to overcome the financial barriers normally associated with their quest of the American dream of homeownership. The program offers a zero-percent deferred loan up to $24,000, for a portion of the purchase, which is due and repayable only if and when the property is no longer owner-occupied or when a change in ownership occurs. The balance of monies borrowed for each home purchase is provided by a local commercial lender or banking institution. A restrictive covenant is recorded that runs with title, requiring owner-occupancy for a period of at least 15 years.

One of the challenges working against the goal of creating longer-term owner-occupied housing in Provo is the smaller size and functional obsolescence that is typical of many of the older homes in these historic neighborhoods. The average age of the housing stock within the 80/20 target area is 65 years and typically, these older homes do not have the amenities that growing families may be looking for when buying homes. Because the 80/20 Program reduces the monthly housing expense, it enables new, lower income homeowners to make needed changes, which may include finishing/adding space or remodeling/modernizing the kitchen or bathroom. They may want to replace old inefficient windows or furnaces with new ones to increase energy efficiency, or replace sprinkler systems that can increase the efficiency of water usage.

The 80/20 Program also provides a Reinvestment Credit to homeowners who reinvest in the property by making capital improvements that increase livability, energy efficiency, and modernization. Homeowners may receive a credit of up to $5,000 on their original loan. The intent is to encourage owner reinvestment with sweat equity and private funding to upgrade and protect the existing housing stock, while increasing owner pride and commitment.

The Reinvestment Credit portion of the 80/20 Program rewards private reinvestment back into the property. The improvements made to the property make it more attractive and functional for a future family. It is a "win-win" for the homeowner as well as the city. The homeowner, usually through sweat equity, enjoys the benefits from the improved livability while experiencing financial benefits from the increased value of the home and is rewarded by the city with a reinvestment credit of up to $5,000. Through private reinvestment, the city is able to accomplish its goals which include improving physical housing conditions within these neighborhoods, increasing levels of home ownership, and increasing commitment and emotional investment in the neighborhood. Provo city hopes to create a ripple effect when improvements to one or two properties within a block are apparent.

Neighbors see the value in reinvesting and improving their property as well. Neighborhood pride and reinvestment can be contagious. A healthy neighborhood has been described as a place where it makes economic and emotional sense for people to invest their time, money, and energy, in a place where neighbors successfully manage related issues and neighborhood change. Provo does more than just encourage neighborhood investment; it has provided a valuable mechanism to "jumpstart" a change for good by providing new homeowners with the means to invest.

City officials report that, to date, more than 125 families and individuals have become homeowners as a result of the 80/20 program. Commenting on this success, Mayor Lewis K. Billings said, "This unique public and private partnership has created a new energy and appeal for neighborhoods previously completely overlooked by those seeking to purchase their own home. Now many of these neighborhoods are beginning to enjoy the benefits associated with new residents who are committed to the care and maintenance of their own property as well as with what is going on in the neighborhood. There is real value in the pride people feel for a home they own."

For information on the Provo 80/20 Program, contact Georgia Drake at the Provo Redevelopment Agency by telephone at 801-852-6164 or by email to