CREJ - 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 Colorado 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 Colorado’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 properties 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 sufficient up-front equity to allow a development to proceed with significantly less debt financing. This equity 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 possible, CHFA leveraged it with federal LIHTC. The results are significant. As of June, by combining 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 counties most impacted by the 2013 floods. These communities already suffered tight rental housing markets, 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 Development and Koelbel and Co., Ash Street Apartments is a 112-unit project serving workforce individuals 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 families, and located on South Broadway in the heart of downtown Englewood. Montbello VOA Elderly Housing II, Denver. Sponsored by Volunteers of America, Montbello VOA Elderly Housing II is an 86-unit project serving 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 southern boundary of the Anschutz Medical Campus and the Fitzsimons Life Science District. Northfield at Stapleton Apartments, Denver. Sponsored by Northeast Denver Housing Center, Northfield at Stapleton Apartments is an 84-unit project serving individuals and families, and located in Stapleton’s newest redevelopment area, Conservatory Green. Morrison Road Apartments, Denver. Sponsored by St. Charlestown Co., Morrison Road is a 197-unit project serving individuals and families in the Westwood neighborhood of southwest Denver. The following developments were awarded state LIHTC in CHFA’s second allocation round completed in May. All of these developments will give preference to households displaced by the 2013 floods: Kestrel, Louisville. Sponsored by Boulder County Housing Authority, Kestrel is a 70-unit building serving seniors, with an additional 120 units in multiple buildings that will serve low-income families and individuals. This is the first LIHTC-supported project constructed in Louisville in more than 15 years. Centennial Park Apartments, Longmont. Sponsored by Summit Housing Group Inc., Centennial Park Apartments is a 140-unit project serving families, and located adjacent to Longmont’s Rough and Ready Trail. Copper Peak, Longmont. Sponsored by the Inland Group, Copper Peak is a 240-unit development serving families. It is located across from a neighborhood grocery and department store, and is within walking distance to local retail and restaurant providers. Crisman Apartments, Longmont. Sponsored by Solvera Advisors, Crisman Apartments will provide 114 units, serving families in Longmont, and will work with local nonprofit organizations to provide resident services such as job skills and financial assistance. Oakridge Senior Apartments, Fort Collins. Sponsored by McDermott Properties, Oakridge Senior Apartments is a 126-unit property that will serve seniors 62 years of age and older, with preference given to households displaced by the 2012 High Park fire. Village on Redwood Apartments, Fort Collins. Sponsored by Fort Collins Housing Authority, Village on Redwood Apartments will provide 72 units of affordable rental housing for individuals and families, and will be located in a single-family oriented neighborhood in northern Fort Collins. Guadalupe Apartments, Greeley. Sponsored by Archdiocesan Housing, Guadalupe Apartments is a 47-unit project providing permanent supportive housing with services for formerly homeless individuals and families, constructed on a part of the campus where the sponsor’s existing Guadalupe Shelter is located. The Edge, Loveland. Sponsored by city of Loveland Housing Authority, The Edge is a 70-unit project providing workforce housing for families, as well as 10 units for formerly homeless veterans, and is located adjacent to open space and Boyd Lake State Park. Windsor Meadows II, Windsor. Sponsored by Windsor Housing Authority in partnership with the city of Loveland Housing Authority, Windsor Meadows II is a 36-unit property that will serve families, and is located at the east end of the Windshire Park subdivision. CHFA received 31 applications seeking federal tax credits in the third and final allocation round of the year. CHFA has $13 million of federal LIHTC for the final allocation round. An announcement for these awards is expected in late July.