First Home Investment Zones (FHIZ)
The First Home Investment Zone Act (S.B. 268) was adopted in the 2024 general legislative session to address housing affordability challenges in Utah’s communities. It allows cities to strategically plan mixed-use, medium-density city or town centers, accompanied by surrounding single-family homes.
FHIZ is a strategic tool that enables a portion of incremental tax revenue growth to be captured over time to accommodate project and system infrastructure costs of the center, and requires certain densities, affordability, deed restrictions, and other requirements.
Contact us at [email protected] to learn more and request access to the FHIZ application portal.
Key Information
The FHIZ Act establishes the following objectives:
- Encourage efficient homeownership development opportunities by providing a variety of housing options, including affordable and for sale, owner-occupied housing
- Improve availability of housing options
- Overcome development impediments and market conditions
- Help conserve water through efficient land use
- Improve air quality by reducing fuel consumption and the number of vehicle trips
- Encourage transformative mixed-use development
- Strategic land use and municipal planning in major transit investment corridors
- Improve efficiencies in parking and transportation, including
- walkability of communities
- street and path interconnectivity within the proposed development and connection to surrounding communities
- access to roadways, public and active transportation
- Increase access to employment and educational opportunities
- Increase access to childcare
Municipalities are encouraged to consult Utah Code (63N-3-16) to ensure their proposal meets statutory requirements before submission.
Requirements for a FHIZ include:
Size
- Minimum of 10 acres and a maximum of 100 acres of developable area
Density
- The residential density requirement for a FHIZ is 30 dwelling units per acre in at least 51% of the zone’s developable areas
- Up to half of these homes can be outside the FHIZ zone but must be within the proposed city boundary (“extraterritorial homes”)
Owner occupied
- At least 50% of homes in the FHIZ must be deed-restricted and owner-occupied for at least 25 years
- Extraterritorial homes can “count” towards the owner occupancy requirement inside the FHIZ
- All of the extraterritorial homes must be owner-occupied
- A city may limit short-term rentals of homes included in a FHIZ
- The FHIZ proposal must include an owner occupancy plan to ensure homes remain owner-occupied throughout the term of the FHIZ
Extraterritorial homes
- Extraterritorial homes are new single-family homes outside of the FHIZ zone, but within the proposed city boundary
- Extraterritorial homes can count towards the density and owner-occupied requirements if they are:
- Owner-occupied (deed restricted for at least 25 years)
- Minimum density of six units per acre
- Single-family
- At least 80% are detached
- Included as part of the overall FHIZ proposal
Affordable Housing
- At least 12% of owner-occupied homes and 12% of rental homes must be affordable within the FHIZ zone
- At least 20% of the related homes (“extraterritorial homes”) outside the zone must be affordable
- Owner-occupied homes are affordable at 80% of the county median sales price
- Rental homes are affordable at 80% Area Median Income (AMI)
- Affordable homes must be spread across the development
- The FHIZ proposal must include an affordable housing plan to meet housing requirements as outlined in the FHIZ terms
Mixed-use
- A FHIZ should be a transformative mixed-use development with dynamic opportunities for the community
- Mixed-use is needed to generate value
Eligibility limitations
- A FHIZ cannot be proposed around a transit station where a Housing and Transit Reinvestment Zone (HTRZ) may be proposed
- A FHIZ cannot overlap with an existing Community Reinvestment Area (CRA)
- There is also a limitation on FHIZ if a municipality’s CRA funds are more than 20% of its ongoing, unencumbered annual revenue
- New homes may not yet be permitted by the city, and the relevant areas may be zoned appropriately, before the FHIZ is approved
The office has been tasked with administering the FHIZ program, conducting the independent “gap analysis,” and managing the HTRZ committee, which reviews FHIZ proposals.
FHIZ follows a similar timeline and process as a HTRZ. The FHIZ process is initiated when a municipality submits a detailed and extensive proposal to the office. Below is the FHIZ proposal process timeline:
Interested municipalities should contact the office at [email protected].
The HTRZ committee has been tasked with reviewing FHIZ proposals. The FHIZ proposal and the corresponding gap analysis are sent to the HTRZ committee for review and consideration.
The committee consists of representatives from interested parties, including taxing entities. The list of committee members is outlined in 63N-3-605 (2). The composition of each HTRZ committee will vary depending on the taxing entities associated within the proposed FHIZ.
Frequently Asked Questions
The Legislature passed S.B. 23 First Home Investment Zone Amendments 2025. This bill provides changes and additional clarity to the FHIZ process, including:
- Requires 50% of housing units within the FHIZ to be owner-occupied
- Clarifies how extraterritorial homes may be included in density and owner-occupancy requirements
- Modifies definitions and makes technical changes
These changes are effective May 7, 2025.
Interested municipalities are encouraged to consult Utah Code (63N-3-16) as to how a FHIZ plan can be developed that meets statutory requirements prior to official proposal submission. The following application best practices include proposals that outline and consider the following:
- An executive summary that includes the number of acres, number and percentage of affordable housing units, and the percentage, duration, and amount of tax differential of funding proposed
- An outline of how the FHIZ proposal demonstrates the statutory objectives outlined in 63N-3-1602(1)
- An outline that explains how the FHIZ proposal will achieve the statutory requirements outlined in 63N-3-1602(2)
- A site plan overlaying the location and defines the boundaries of the FHIZ (including the extraterritorial homes) and the parcels of land within the proposed area
- Visual renderings or other visual aids to assist with how the FHIZ area will look and function with the various aspects of FHIZ, including housing density within the FHIZ, extraterritorial homes relevant to the FHIZ, the density of the extraterritorial homes and existing zoning and proposed zoning changes related to the FHIZ
- A proposed development plan that includes an affordable housing plan, an owner occupancy plan, and demonstrates how the FHIZ proposal complies with the municipality’s moderate-income housing plan and general plan
- An evaluation of the possible benefits of active transportation, public transportation availability and utilization, street connectivity, and air quality
- A summary of how a status quo or market-driven plan would be different as compared with the FHIZ proposal, according to the number of units per acre for residential and commercial use
- A finance schedule to align expected revenue with required financing costs and payments
- A summary of how the amount of tax differential would address costs directly associated with development impediments and other FHIZ requirements
- A summary of the amount of tax revenue generated between the status quo or market-driven plan as compared with the FHIZ proposal
- A list of assumptions of market rates, such as material and labor costs, vacancy rates, costs of capital, and other information useful for assessing the plan
- A pro forma estimating the gap between status quo or market-driven plan, used by reference to the summaries found in the narrative sections
- Provides estimated budgets and construction costs, anticipated revenue, financing, expenses, and other sources and uses of funds for the project area
- Other information relevant to the support of statutory requirements
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"Extraterritorial home" means a dwelling unit included in the FHIZ proposal. These homes are outside the FHIZ area but within the proposed city boundary.
Extraterritorial homes can “count” towards the FHIZ density and owner-occupancy requirements if they are
- A minimum density of 6 units/acre
- Single-family homes
- Owner-occupied (deed-restricted) for at least 25 years
- Has not been issued a building permit as of the date of approval of the FHIZ
At least 80% of the extraterritorial homes must be detached.
Yes. The office also administers the HTRZ program. The FHIZ and HTRZ programs follow similar timelines and processes and are both reviewed by the HTRZ committee.
Click here for more information about HTRZ.
Click here to see Wasatch Front Regional Council (WFRC)’s HTRZ & FHIZ comparison sheet.
Utah municipalities have access to other state programs that promote affordable housing, not administered by the office, including the Home Ownership Promotion Zone (HOPZ).
Click here for the Utah League of Cities and Towns’ comparison of affordable housing funding tools sheet.