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Page 6B — COLORADO REAL ESTATE JOURNAL — March 18-March 31, 2015
W ith vacancies
dropping, rents
rising and the baby
boomers aging, the need for
affordable rental senior housing
is more essential than ever.
Senior tenants on fixed incomes
struggle with market-rate rent
increases and must seek out
affordable alternatives, typically
in scarce supply. However, recent
legislative and funding changes
have provided new capital
sources for affordable housing,
including senior housing
projects to help increase the
supply of affordable housing
in the Denver metro area
and across Colorado. Taking
a look from this perspective
can augment the ongoing and
necessary discussion of how to
best provide affordable homes
for seniors.
The Colorado Legislature
sponsored the reinstatement
of the Colorado state low-
income housing tax credits
as an additional tool to
provide adequate financing
for affordable housing
communities across the state.
As the agency overseeing the
state credit, the Colorado
Housing Finance Authority
matched the reimplemented
Colorado state low-income
housing tax credit program
with its noncompetitive federal
4 percent low-income housing
tax credit process. The goal is
for more projects to be financed
viably with the noncompetitive
4 percent credit, relieving some
of the competitive pressure for
the valuable, but very limited,
federal 9 percent low-income
housing tax credit. Under the
new state low-income housing
tax credit program, up to $5
million of annual tax credits
can be awarded for 2015 and
2016 with the hopes that the
Legislature will extend the
program in future years. The
credit is earned over six years
and can result in $1 million to
$2 million of additional equity
investment in a typical 60- to
90-unit affordable project. The
per-credit pricing of the state
low-income housing tax credit is
typically lower than comparable
federal low-income housing tax
credit pricing. The results come
from the tax credit partnership
deducting state income taxes
from federal taxation, thereby
reducing the state credit value
(e.g., 50 cents per $1 of state
low-income housing tax credit
compared to 95 cents to $1 per
$1 of federal credits).
On Feb. 6, Denver’s mayor
announced a $10 million
revolving loan fund to address
the city’s crisis of available
housing. The Denver Post
reported, “[t]he new loan
program is funded by $6 million
from the city and county of
Denver, $3 million from the
Colorado Department of Local
Affairs and $1 million from
the Colorado Housing and
Finance Authority … The new
fund will target projects that are
eligible for but may not receive
[competitive] low-income
housing credits from CHFA.”
For senior affordable
developers these new sources
are potential incentives for
accelerated development.
However, a corresponding
increase in construction costs,
as much as 1 percent per
month over the past year, has
taken away from the incentive
provided by these new capital
sources. The most competitive
affordable developer continues
to be one who can differentiate
his project from other
projects by being responsive
to and integrated into the
local community. This entails
neighborhood collaboration
from the project genesis, and
a project that originates from
a series of defined community
needs, which will achieve the
desired outcomes needed by
federal and state financing
programs.
Differentiated projects are also
well-designed projects. Projects
designed for senior tenants
take into account the specific
needs of the aging population.
Identifying and working with
experienced architects and
builders who understand the
senior demographic expresses
well-thought-out and targeted
ideas to the funding agencies.
Seeking to use low-income
housing tax credit financing
requires a developer to learn
the competitive CHFA process,
and ongoing compliance
requirements, while also
considering the low-income
housing tax credit investor’s
underwriting needs. Low-
income housing tax credit
applications are strengthened
as much as possible if CHFA
can establish that the investor
vetted the developer and that all
underwriting assumptions are in
accord with CHFA’s published
thresholds.
Developing housing for
special needs populations also
can be key to competitiveness,
and having a portion of the
units specifically set aside
for veterans or seniors with
disabilities may distinguish
a given project from its
competition. Target specific
groups with caution, however,
because if you set aside units
for households with a very low
area median income or a special
needs population, the project
sponsor must include robust
resident services to successfully
integrate these tenants into the
development.
T he shipping container
trend has arrived
in Colorado. The
time is right to start using the
tremendous oversupply from
importing foreign goods.
(Ironically, at the time of this
article, a dock worker union
strike has resulted in thousands
of shipping containers stranded
on ships off the coast of
California and threatens East
Coast trade.) The piles, literally
walls, of shipping containers are
transforming Los Angeles docks
and neighborhoods. They are
attracting undesirable activities,
vermin and have become quite
a nuisance. So the question is,
how can we solve the senior
housing crisis while benefiting
the environment? Shipping
container homes!
Architects across the country
and around the world are
coming up with ways to create
inexpensive housing alternatives
for seniors (and others, like the
millennials) who don’t want a
large living space or the cost
associated with it. Relevant
designs have resulted in award
winning homes. Areas with
low-cost land are experiencing
new levels of interest as more
seniors are thinking outside the
box and researching previously
overlooked towns.
What Seniors Look
for in Housing
• Cost. This isn’t a deal breaker
for some seniors who drift
toward active adult communities
starting in the $400,000 range.
But for a majority of Americans
who are counting dollars or on
a fixed income, an inexpensive
community is attractive.
• Size. Many seniors are
downsizing at this stage in their
lives, either because they became
empty nesters or had other
lifestyle changes.
• Community. Being part of a
community is key to a healthy
balance. Seniors have more
time to give to the community
and benefit the most from the
support. A diverse community
serving all age groups is vibrant
and attractive.
• Health services. Seniors
enjoy being close to basic health
services, such as doctor, dentist
and hospital facilities. Many are
members of health clubs, and
believe staying active is key to
longevity.
• Culture and entertainment.
Dining out, seeing a play,
attending a concert, joining
clubs and frequenting events are
all ways seniors stay social and
engaged.
• Climate. Most seniors are
excited to be outdoors and enjoy
nature. Gardening is a big trend
for retirees as well. A climate that
allows outdoor activities much of
the year with a decent growing
season is very attractive.
• Transportation. Although it is
still a challenge to get on a bus
or train and be shuttled to some
favorite venues in Colorado, the
easy access to airports is a plus.
Colorado – Your
Next Hometown
Colorado towns offer most of
the items listed, as evidenced by
the steady increase in population.
According to the Colorado
Climate Center, the state boasts a
majority of days throughout the
year that are either clear or partly
cloudy, averaging 300 days per
year that the sun shines at least
one hour, and monthly mean
temperatures between 30 and
75 degrees Fahrenheit. Due to
the high cost of housing in the
urban centers, many rural areas
are seeing an influx of fixed-
income seniors. Infill city lots that
have infrastructure in place are
being redeveloped into senior
subdivisions. Small senior houses
fit into this type of development
due to their proximity to
amenities and easy emergency
access.
Steel Construction
Shipping container homes
are a method of saving precious
natural resources by using a
structurally sound material
that the United States has in
abundance. It is a way to reuse
an already manufactured module
and turn it into a “dream
home.” According to Trulia,
the average construction cost
of a 2,000-square-foot stick-built
house in the Denver metro area
is $130 per sf. Compare that to
a used 40-foot-long, 8-foot-wide
and 8.5-foot-high steel shipping
container, which costs $2,000
to $4,000. The steel container
provides a strong, cheap building
material that can be redesigned
and stacked.
Containers can be connected
and the area can be readily
modified for efficient use of
space. Most of the time the
exterior will be cocooned with
insulation followed by an outside
finish, like HardiePlank. Other
noncombustible materials may be
used on the exterior, allowing the
house to be utilized in wildfire
interface areas. The interior walls
are simply the steel container,
giving the home a modern,
“industrial chic” appearance,
which is a popular design. Simple
interior finishes can keep the
cost down significantly. Some
builders will reuse features of
the container to accentuate the
unique design. In some cases,
shipping containers come with
wood floors already installed.
In the home designed in
Denmark, passive solar features
were incorporated into the
home, using solar panels on
the roof, in addition to tapping
the sun’s power through the
angles of the windows and
roofline. Constructing the home
on pedestals or peers allows
development of land within
a floodplain, and with other
modifications, areas that were
otherwise constrained due to
natural features now can be used.
Many “kits” or “prefab”
buildings are available via
the Internet. The unlimited
configurations of containers can
be designed to suit all senior
needs. Putting the homes on
trailers allows for mobility if the
occasion arises, giving more
flexibility for those seniors who
prefer to be “snow birds.”
As housing and basic material
prices continue to rise, finding
adequate senior housing
becomes more difficult, which
makes shipping container
construction worthy of
consideration.
Stephen B. Clark
Principal, S.B. Clark Companies,
Denver
Patricia Parish, AICP
Land planning service line director,
Rocky Mountain Group, Monument
This project in Denmark demonstrates how shipping containers can be
configured to create a unique home.