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— Multifamily Properties Quarterly — July 2015
L
ast year, in recognition of
Colorado’s growing need for
affordable housing, and to
respond to the need for more
housing in Northern Colorado
following the 2013 floods, the Colo-
rado General Assembly took a bold
step in renewing Colorado’s Low
Income Housing Tax Credit program.
Modeled after the successful federal
LIHTC program, state tax credits are
used to incentivize private sector
investment in the development of
affordable rental housing. Since its
creation in 1986, the federal LIHTC
program supported the development
or preservation of 46,000 affordable
multifamily units across Colorado.
In only one year, the newly renewed
state LIHTC program is making a
significant positive impact in Colo-
rado’s housing landscape.
State and federal tax credits are
allocated to affordable housing
developers by the Colorado Housing
and Finance Authority. Developers
who are awarded tax credits sell
them to investors to raise equity
for the development of multifamily
properties. LIHTC-supported proper-
ties are targeted to serve low-income
households, and many serve the
state’s most vulnerable populations,
including seniors, veterans and the
homeless. The tax credits serve a
critical role in helping generate suf-
ficient up-front equity to allow a
development to proceed with signifi-
cantly less debt financing. This equi-
ty enables the property to operate
successfully despite having reduced
cash flow, given the rent restrictions
designed to ensure that residents
only pay 30 percent of their income
toward rent.
In order to
ensure that the
new state LIHTC
was deployed as
efficiently as pos-
sible, CHFA lever-
aged it with federal
LIHTC. The results
are significant. As
of June, by com-
bining state and
federal tax credits,
CHFA already has
supported 1,802
units, with one
more round of tax
credit allocation to
be conducted later this year. CHFA
estimates 3,000 affordable rental
housing units will be supported with
LIHTC by year end, an increase of
nearly 90 percent compared with
the most recent five-year average of
units supported annually.
State LIHTC recipients in 2015
include for-profit and nonprofit
developers, as well as housing
authorities. Every development
receiving 2015 state tax credits is
located in an area where vacancy
rates are below 5 percent. Many of
the developments supported with
state LIHTC are located in the coun-
ties most impacted by the 2013
floods. These communities already
suffered tight rental housing mar-
kets, which were then exacerbated
by the loss of housing due to the
floods. To most effectively address
this affordable rental housing need,
CHFA partnered with the Colorado
Division of Housing to jointly review
applications and select projects to
receive tax credits and Community
Development Block Grant-Disaster
Recovery funds.
The following developments were
awarded state LIHTC in CHFA’s
first allocation round completed in
March:
Ash Street Apartments, Denver.
Sponsored by Mile High Develop-
ment and Koelbel and Co., Ash
Street Apartments is a 112-unit
project serving workforce individu-
als and families, and located at the
redevelopment site of the former
University of Colorado Health and
Sciences Center.
Broadway Station Lofts, Englewood.
Sponsored by Medici Communities,
Broadway Station Lofts is a 111-unit
project serving individuals and fami-
lies, and located on South Broadway
in the heart of downtown Engle-
wood.
Montbello VOA Elderly Housing II,
Denver.
Sponsored by Volunteers
of America, Montbello VOA Elderly
Housing II is an 86-unit project serv-
ing seniors in northeast Denver.
13th Avenue Apartments II, Aurora.
Sponsored by Solvera Developers,
13th Avenue Apartments II is a 177-
unit project serving individuals and
families, and located on the south-
ern boundary of the Anschutz Medi-
cal Campus and the Fitzsimons Life
Science District.
Steve Johnson
Community
development
director, Colorado
Housing and
Finance Authority,
Denver
Taxes
Centennial Park Apartments in Longmont is one of many Colorado communities award-
ed a low-income housing tax credit.
