CREJ - Multifamily Properties Quarterly - November 2021
At this point, Colorado’s growing housing crisis is no secret. The state’s popularity on the national stage, combined with development challenges and materials scarcity, led to a stark imbalance between housing supply and demand even before COVID-19. The issue is only getting worse. As of this summer, Colorado ranked first in the nation for housing instability, per the U.S. Census Bureau’s weekly household survey. Older adults in particular are feeling the pinch, with more than a third reporting they had slight or no confidence they could make their rent. Headlines about the challenges we face to create and preserve affordable housing for our aging population are abundant. They all boil down to one simple fact: Metro Denver must prioritize attainable senior housing and work to protect and improve the existing stock of housing reserved for these populations. Examples of replicable solutions in the news are far less frequent. That doesn’t mean they are not out there. Our firm recently celebrated the renovation of Denver Metro Village in the Sloan’s Lake neighborhood of Denver. One of the first affordable housing communities in Colorado serving vulnerable seniors 62 and older, the community also has the distinction of being located in one of Denver’s hottest real estate markets. We worked closely with Metronomy Inc., a nonprofit organization created to manage Denver Metro Village, to complete the renovation with the help of government programs aimed at assisting in the development of affordable housing and to minimize disruption to existing residents. In addition to it being a rare story of affordable housing preservation in one of Denver’s most popular neighborhoods, this project offers several lessons in the power of for-profit/nonprofit collaboration to address some of the bigger challenges we face in housing. Harnessing individual strengths. Most professionals who serve the aging adult community are not, by nature, development experts, and it’s unrealistic to expect them to know how to most effectively navigate the complicated process of building or renovating a community. Partnership between nonprofits and the development community is one of the most-effective approaches to meeting the challenges we face in housing – especially when it comes to areas outside of traditional market-rate work. By harnessing Metronomy’s strengths in senior care alongside our expertise in development and renovation of this particular housing type, for example, we were able to update Denver Metro Village in a way that left the nonprofit in a financial position to effectively preserve and maintain this essential asset in the community for years to come. Leveraging available resources. Awareness of and experience with the various financing mechanisms available for building or renovating affordable senior housing is a huge part of the battle and a big area where the private development community can support nonprofits. The renovation of Denver Metro Village was primarily financed through the Colorado Housing and Finance Authority’s noncompetitive federal 4% low-income housing tax credits. These credits are awarded to developers by the government and can then be sold to investors to obtain funding for the development and maintenance of incomed-restricted housing. With Section 8 vouchers through the U.S. Department of Housing and Urban Development used on more than 50% of the units, the nonprofit was able to establish cash flow that helped it maintain the building over time and enabled it to take on the renovation. More than 120 of the units in this community are and will remain eligible for Section 8 assistance going forward, providing future predictability for the operators. The remaining units are available for seniors earning between 40% and 80% of area median income. Enhancing and preserving existing housing stock. In addition to adding more units to our affordable age-restricted housing stock, ensuring the units we do have are equipped to meet modern needs is vital. Here again, collaboration with the right partners is essential to ensuring strategic, quality upgrades that will stand the test of time without breaking the budget. Engaging with Santulan Architecture and Milender White Construction, Denver Metro Village was able to add a new 185-space parking structure, 8,123 square feet of commercial space and 19 additional residential units. The renovation also included significant upgrades to the 191 existing units and amenity spaces. And all work was completed without displacing the existing residents. We have a similar partnership in place with Silver Key Senior Services, Golden West and Senior Housing Options to bring new affordable senior housing to Colorado, and overall these affiliations between for-profit and nonprofit organizations are increasingly common. Issues as big and complex as Colorado’s housing challenge won’t be solved by one type of enterprise working alone. Providing accessible, quality housing to seniors and income-restricted people of all ages in metro Denver and across the state will require a joint effort with partners who are willing to lean on and learn from one another.