CREJ

August 2019 — Multifamily Properties Quarterly — Page 37 www.crej.com Affordable Housing T he closing of the 72nd Colorado General Assembly brought in arguably the biggest changes in affordable rental housing in Colorado since creation of the Federal Low-Income HousingTax Cred- it in 1986. As those that have worked in the affordable housing arena know, Colorado was one of the few states without a dedicated revenue source for affordable housing. That all changed May 3 with the passage of HB1245. In addition, the expansion of the State Low-Income Housing Tax Credits through HB1228 and additional rev- enue provided by HB1332 gave a real boost to funding for affordable housing in the state. Rep. MikeWeissman from Aurora provided critical leadership in getting HB1245 across the finish line. In addition to Rep.Weissman, many other groups and individuals are to be congratulated for the decades-long hard work that made these bills reality. Development of affordable rental housing requires robust state and federal tax credit programs. Since 2002, the sale of these credits to private-sector investors has generated approximately $170 million in equity to develop or preserve over 2,400 units of affordable housing in the city of Aurora. As Aurora grows from its cur- rent population of 375,000 and housing becomes more expensive, the tax cred- it programwill be the workhorse to get new units on line as well as preserve and rehabilitate existing apartments. The cost to develop affordable rental housing in the metro area has been steadily rising due to increased labor, land and material costs. The com- plete cost to develop one affordable rental apartment unit in Aurora runs between $275,000 and $300,000. As all affordable devel- opers know, the impact of these ris- ing costs has placed a higher burden on both the federal and state low-income housing tax credit. The result of these increased costs is smaller projects. Where we could once develop 80 or 90 units, we now are building 50 or 60 units. These numbers contrast with the increased demand for affordable housing. Addi- tionally, the generally stagnant funding from the U.S. Congress for affordable housing has left many of us wondering what the future would provide. Fortu- nately, the Colorado General Assembly and Gov. Jared Polis acted. I’ve been working in the afford- able housing arena in metro Denver since 1993, and I’m still a bit in shock over what transpired this legislative session. We’ve gone from very mod- est state funding that was subject to annual appropriations in the past to money we can plan to use on a pipeline of projects well into the future. The demand for these funds is immense. Recently the Aurora Hous- ing Authority opened our Housing Choice Voucher (Section 8) waiting list for 40 new vouchers and received over 1,000 applicants. Many people contact our office daily looking for help with rental housing and, unfor- tunately, there are few resources to which we can direct them. The challenge now is to deploy these new funds effectively and efficiently in a variety of programs and develop- ments that help meet the range of housing needs from chronically home- less to moderate-income families seeking to buy their first home. The Aurora Housing Authority has three new rental developments that will be able to use the new funds – develop- ments that most likely wouldn’t hap- pen or would be considerably smaller without the infusion of additional funds. These units will provide hous- ing for veterans, seniors, formerly homeless individuals and working- class families. Many of these citizens now are paying a large percentage of their income on housing if they even have housing. Preserving “naturally occurring” affordable housing also will be a focus in Aurora. Our agency has been out bid several times on exist- ing apartment buildings by investors looking to increase rents on older buildings. We are hopeful that some of these units can now be preserved at rents affordable to low- and mod- erate-income families. Estimates place the number of households in Colorado that pay more than half of their monthly income on rent at nearly 197,000. Consequently, it will take a variety of groups work- ing together to create more units of affordable housing. In Aurora, and throughout the state, examples of these partnerships are already work- ing. Nonprofits, housing authorities and for-profits often partner to get affordable units built or rehabilitated. We also are fortunate in Colorado to have two very creative, responsive and responsible agencies in the Colorado Housing and Finance Authority and the State Division of Housing adminis- tering affordable housing programs. All these groups will now have the abil- ity to get projects done that wouldn’t have been completed without what just transpired at the state Capitol. The efficient and responsible deploy- ment of these funds is critical to showing our citizens and elected offi- cials that they made a good choice in providing these valuable resources to address the affordable housing crisis in Colorado. ▲ Perspective of the Aurora Housing Authority THE LOVE FUNDING TEAM WAS WONDERFUL TO WORK WITH. THEY DELIVERED THE LOAN ON SCHEDULE, AS PROMISED, AND WE WERE ABLE TO LOCK- IN ONE OF THE LOWEST, LONG-TERM, NON-RECOURSE RATES EVER ACHIEVED BY OUR COMPANY. I WOULD NOT HESITATE TO recommend love funding for future business. PETER WESSE L 303.777.5016 | pwessel@lovefunding.com L EADERS I N MULT I FAM I LY F I NANCE WWW. LOVE FUND I NG . COM Craig Maraschky Executive director, Housing Authority of the city of Aurora As Aurora grows from its current population of 375,000 and housing becomes more expensive, the tax credit programwill be the workhorse to get new units on line as well as preserve and rehabilitate existing apartments.