The city has more than 50,000 affordable housing units behind what is needed for people earning less than 60% of the region’s median income, Denver Housing Authority Executive Director David Nisivoccia told Denverite in January. (The area’s median income was $94,320 for a family of three in 2021.)
That’s a daunting number of units to build, land to secure and financing to raise, especially with the current strategy of building more affordable housing: a patchwork of public and private partnerships with government groups like the Department of Housing Stability, quasi-government organizations such as the Denver Housing Authority, non-profit organizations, banks, and other lenders. All of this takes time, resources and deep connections.
“If you can get the financing in different ways, you can cover your costs,” said Kimball Crangle, local president of low-income housing developer Gorman and Company. “But if you can’t cover the costs, you’re dead in the water.”
So when a project like The Stella, Gorman’s 131-unit mixed-use low-income housing development, comes to Globeville, it’s a big deal – even if 131 new units are a pittance of what’s needed. .
The project celebrated its opening on Wednesday, although people have been living there since late August. The building includes space on the first floor for the non-profit organization that donated the land. This group, Laradon, which has been providing services to people with developmental issues since 1950, donated the land for the project.
Above the Laradon space, there are one- to four-bedroom units. Multi-bedroom units are rare in new construction, and adding them to the project helps ensure that at least some families can stay in the city.
“We see a dire need for family housing units,” Crangle said.
The Stella will serve people earning between 30% and 80% of the region’s median income. Of the 131 units, 16 will be dedicated to residents with intellectual and developmental disabilities who are at risk of homelessness; 97 will be for people earning up to 60% of the region’s median income; and 18 will go to people earning up to 80% of the AMI.
Gorman found funds for the project from a variety of sources: low-income housing tax credits from the Colorado Housing Finance Authority and the National Equity Fund, funding from the city and the Colorado Division of Housing, loans to the construction, permanent loans and support from the Denver Housing Authority to help pay for housing for people coming out of homelessness.
“The Stella is a testament to the power of partnerships and what’s possible when a longtime nonprofit service provider partners with an affordable developer to create affordability for current and future generations in Denver,” said Britta Fisher, associate and executive director of the Department of Housing Stability. A declaration.
These types of private-public collaborations are the primary means of building any low-income housing. Establishing financing for limited-income projects has been Gorman’s goal and, unlike market-rate developers, the company’s mission is to address housing affordability.
“Our core philosophy as a company is really to provide this type of housing,” Crangle said. “We are not going out of our way here. You know, there are other developers who focus on market rate and other developers who focus on other things. What we are really passionate about is trying to figure out how we can add very good quality, sustainable, sustainable and affordable housing communities in prime neighborhoods.
There are only a limited number of sources for this funding, and the main ones at the regional level are working at the limit of their capacities.
Colorado Housing Finance Authority tax credits have been one of the primary mechanisms for financing affordable housing, but the group’s money is limited and competitive for developers. Because CHFA is committed to funding projects across the state and spreading its resources, its ability to fund a massive amount of new housing in Denver is limited.
Denver Housing Authority, the city’s largest affordable housing developer, has the capacity to fund about 300 units a year, Nisivoccia said, so the group can’t keep up with demand.
The lack of affordable housing has been worsening in metro Denver — and Colorado as a whole — for years.
“That demand has grown since our last recession,” Crangle said. “And there will never be enough resources to solve this problem the way we have tried to solve it. We really have to get creative. There must be funding. There must also be political initiatives. We really need to work around the edges to add as much supply as possible because the problem will get worse.
What are these solutions? For Crangle, it all starts at the neighborhood level.
Rezoning communities to allow secondary suites is a starting point. She thinks neighborhoods could push for bigger revenue-limited development projects.
Ultimately, she hopes Denver generates more funding for affordable housing through new construction — the kinds of ideas pioneered in the city’s new housing affordability expansion process that aims to change the amount of money developers need to invest in low-income housing. It’s a trend she sees resonating throughout the metro area.
“A lot of jurisdictions have come to the point now that it’s something we have to have,” Crangle said. “So the political will is there. Some resources are there. I think more jurisdictions are going to be more creative in creating additional resources through likely taxation mechanisms. You sort of pool the funding to enable the development.
But it’s not just large-scale developers who can have an impact on creating more housing.
“Our Denver neighborhoods have the power to create affordable housing opportunities for all incomes,” she said. “They don’t always have to be huge developments. They can fit into the character of the neighborhood.
Many of these ideas would require a shift in how people perceive their neighborhoods and who deserves a home in them.
“It takes the political will to say that people who live in affordable housing are important enough to our community that we include them in our developments going forward,” she said.