CREJ

Page 34 — Multifamily Properties Quarterly — February 2018 www.crej.com Since 1996, LAI Design Group has been involved in a variety of high density multifamily and attached housing projects ranging from 10 to 300 units per acre. These solutions range from high end luxury urban living environments to a ordable housing strategies. For more information on Real Estate Development Solutions contact us info@laidesigngroup.com R EAL EST AT E DEV ELO PM EN T • Town homes & Condominiums • Urban / Podium • Midrise / Highrise • Suburban • Affordable / Tax Credit • Modular • Active Adult • Visual Media & Marketing • Residential Product Development • Community Design MULTIFAMILY SERVICES T he United States Housing Act of 1937 created a pro- gram for funding public housing authorities autho- rized by cities to provide for the housing needs of the many low-income families displaced from their homes by the Great Depression. The Housing Authority of the city and county of Denver, organized in 1938, was one of the first authorities in the country and its Lincoln Park Homes project was one of the first to receive funding. At that time, the federal govern- ment provided funding not only for construction of the housing, but also provided subsidies to help operate them. Families would pay a portion of their incomes toward the operating costs and the sub- sidies would cover the rest. As time went by, different structural types were used to house fami- lies, including townhomes, walkup apartments and high-rise build- ings. Eventually, it became clear that not all those housing plans worked. Consider, for example, the his- tory of such notable failures as the Cabrini-Green housing complex in Chicago. Begun in 1942 and com- pleted in 1945 on a site cleared of slums and shanties, the project thrived during World War II as its predominantly African-American residents worked in the war indus- try. After the war, they were laid off in favor of returning soldiers and the project became home to drug gangs. It was closed in the early 2000s and finally demolished in 2011. Another example is the noto- rious Pruitt-Igoe high-rise project in St. Louis. Built in the early 1950s on ground for- merly occupied by tenements, the 33 11-story build- ings saw their occupancy peak at just over 90 per- cent in 1957, then became so crime- ridden that police patrolled only in pairs of cars. By 1976, the now-empty buildings had all been leveled by dynamite. None of those problems beset the housing authorities in Colo- rado. Here, they have taken on new roles. While federal funding for housing programs has decreased, the need for affordable housing has increased. To meet their local need, many housing authorities have evolved from agencies that only administer federal housing programs to become developers of affordable housing and, thanks to changes in state statutes, part- ners with other developers. (The General Assembly passed laws allowing property and sales tax exemptions to affordable housing projects where a housing authority has an ownership interest. Other laws allow the creation of regional and multijurisdictional housing authorities.) Several Colorado housing authorities have even changed their name to better reflect their agency’s changing roles. Housing Catalyst, formerly the Fort Collins Housing Authority, and Metro West Housing Solu- tions, formerly the Lakewood Hous- ing Authority, for example, have become market- driven develop- ers of multifam- ily properties. In markets where the rental vacancy rate has remained below 5 percent, local communities have struggled to provide enough housing, especially for their com- munity members whose incomes are less than 60 percent of the area median income. Housing authorities have stepped up to help fill the housing demand for those earning lower incomes. These entities have access to unique funding mechanisms that allow them to finance develop- ments while keeping the rents lower than market rate. To make the math work, they have become sophisticated financial experts who use a complex combination of both public and private funding tools. The biggest pieces in this finan- cial puzzle are low-income housing tax credits. “This investment incentive for private investors is critical for bringing in the funding needed to make our development deals work,” said Chadrick Martinez, Housing Catalyst’s director of real estate development. Depending on the funding struc- ture, housing authorities combine these investor dollars with a vari- ety of other funding sources, such as Community Development Block Grants, HOME and HOPE VI grant funds, private activity bonds, tradi- tional mortgages, etc. With private investors in the equation, these affordable housing developments also need to look like market-rate properties. Exam- ples of such developments abound across the state with the Denver Housing Authority leading the way with its large-scale developments in the Curtis Park neighborhood, its planned redevelopment of the Sun Valley neighborhood and in a nice bit of historical symmetry, the Mariposa Redevelopment and construction of a new office build- ing where the original Lincoln Park Homes project was. The pace for DHA gathered steam in the early 1980s when it used general obligation bond funds from the city and county of Denver originally intended to build hous- ing for athletes and the press who were to come to Denver for the ill-fated 1976 Winter Olympics that was rejected by Colorado voters. Combining those funds with the now-defunct Federal 11(b) bond program and the Section 8 Hous- ing Assistance Payments program, DHA was able to build nearly 1,000 units around the city. Ten years later, many of those buildings were refinanced and upgraded using LIHTC and DHA has gone on to build multiuse mixed-income proj- Recognizing the changed role of housing authorities Affordable Housing Spotlight Rodger Hara Principal, Community Builder Realty Services, Denver Kim Iwanski Manager of communications, Housing Catalyst, Fort Collins Please see Iwanski, Page 35