February 1, 1996

Say good-bye to $100k house in Fort Collins

It may not be such a good year for people who’d like to get into a house in Fort Collins for under $100,000. The Group Inc.’s Larry Kendall said that in the third quarter of 1995, for example, homes in the less than $100,000 range sold about 43 percent faster than they came on the market. “If we continue at this rate, you’re going to see, within a year or two, that you won’t be able to buy a house for $100,000,” Kendall said. “We’re heading the direction of Boulder, where they haven’t had a $100,000 property for years. Here, we
haven’t had a $50,000 property for years. The $100,000 house is going to go the way of the $200 apartment. “Fort Collins is becoming a less affordable community.” And that is a worry. The city’s Affordable Housing Board, the Fort Collins Housing Authority and Colorado State University’s Neighbor to
Neighbor program are all mulling ways to provide affordable housing, which is defined as housing that people making less than 80 percent of the
median household income can obtain without spending more than 30 percent of their monthly income. In the meantime, The Group has offered a five-step plan for consideration: 1. Restructure building fees. Currently, permit fees for a two-bedroom apartment or condominium are almost as high as for a $500,000 single-family
house, The Group reports. Fees generally account for between 20 and 25 percent of the cost of an apartment and less than 5 percent for a
single-family house. 2. Educate neighborhood groups. The Group counters the suggestion that apartment or condo development tends to erode single-family property
values because of traffic and crime, with the examples of Parkwood and The Landings/Warren Lake. There, half-million to million-dollar homes rub
shoulders with apartments and condos. 3. Focus on the acquisition of existing housing. Most government agencies and nonprofit groups tend to focus their efforts on new construction,
when acquiring existing homes is more cost-effective. The Group, which has over the years helped the Fort Collins Housing Authority acquire
properties, says new housing runs 20 percent to 50 percent more expensive than existing dwellings. 4. Focus on high-paying jobs. Though Fort Collins’ average home price of $147,159 is near the national average of $144,500 and well below the
$188,800 average for the western United States, the city falls in the bottom quarter for affordability. The Group reports that the average Fort Collins
wage is below both state and national averages. About 47 percent of the employed work in service or retail jobs, where wages run $13,213 and
$20,300 annually. By contrast, manufacturing jobs pay an average of $37,408. 5. Improve education and skills. One of Fort Collins’ major employers recently had 30 job openings, for which 800 people applied. Only 5 percent
had a high school diploma, could do math at a sixth-grade level and could read at the ninth-grade level. Of that pool of 40, only 18 passed the
interview process and were hired. Notes The Group: “We not only need high-paying jobs, we need our people to develop the skills to qualify for
them.” GREELEY GETS IT But Michael Hoffman of the Fort Collins-based Orion Properties is making the idea of affordable housing work – in Greeley at least – without
government subsidies or tax credits. Hoffman and Pro Realty’s Clifford Clift began sales on their second affordable project in Greeley, Parkview, in August. Already, 47 of the 80 lots in
the first phase of the 40-acre, 183-home east Greeley development are sold. Three builders, Gary Schneider and Ed Gibson, both of Greeley, and Jim Sabin’s CBA Development of Fort Collins, are working in the
development, where every home is priced in the $70,000 range. “I was able to buy ground cheap enough, with enough water credits on it that the raw land and raw water costs were low,” Hoffman said. “Plus,
we’ve got three guys willing to come and build, and in exchange for higher volume take smaller margins. No one’s making a 15 to 20 percent margin,
but we’re still retailing for around $70 a foot, so we’re pretty competitive.” Lots sell to the builders for about $16,000. Universal Lending provides permanent financing for sales in the neighborhood. Hoffman said the company has reserved a block of Colorado Housing
and Finance Authority funds but also loans from its own pool at rates competitive with FHA. Located one block east of First Avenue on East 24th Street, Parkview adjoins East Memorial Park and East Memorial Elementary, and is surrounded
by mobile-home communities and subsidized and low-cost housing. But don’t lump the stick-built homes in Hoffman’s development into the
cardboard house category. “To be an FHA-approved, it has to be an Ideal Energy home,” Hoffman said. That means every house in Parkview meets the highest insulation
requirements, is framed with two-by-six lumber, has high R-value windows and FHA-approved carpeting. “It isn’t junk, and it isn’t mobile or modular,” Hoffman said. “They’re all about 1,040 square feet, three bedrooms and single-car garage on a
6,000-square-foot lot. And that’s why we’re selling them: It’s a good value.” Though Hoffman and Clift received no direct government subsidies for the project, the City of Greeley did reimburse Orion for off-site utility
improvements and helped with improvements to 24th Street and assisted with some drainage improvements. City planners also helped Orion navigate
the approval system.” “City of Greeley, hasn’t written me any checks, but getting through the process has been absolutely a breeze,” Hoffman said. “They really wanted to
see this project happen, so they just took me by the hand. “We started in April and had the plat recorded in August. It moved just as fast as our engineer could get it done.” Good thing. The demand for affordable housing in Greeley is high. Orion’s last project was the 50-home Town North, on the west side. “We broke ground in December 1994, and the last home in Town North closed in May or June,” Hoffman said. If all goes according to plan, Parkview won’t be the last stop for buyers in the neighborhood. The first house under contract in Town North sold for
$69,000. The same house resold in the summer of 1995 for $80,000. “So that’s pretty exciting,” Hoffman said. “Without seeing it, a lot of people’s impression is that this is a tenement-type situation,” Hoffman said. “But it’s not easy to qualify for a $70,000
loan. These aren’t rich people, but they are solid citizens, and you end up with people who plant trees, get the grass in and keep things looking nice. “Most of our buyers are dual-income people with a fixed hourly wage. They have had good jobs for a long time and are a good credit risk, but can
never ever get ahead enough to buy a home.” Hoffman is no stranger to low-end development. His father developed area mobile-home parks in the 1970s and later converted several hundred
trailers to permanent housing stock. Orion also has worked the mid-range with US Home in Denver, Lafayette, Westminster and Aurora. Orion would like to extend the Parkview concept to other Front Range communities. “All of the towns on the Front Range are really needing this right now, but we haven’t been able to go anywhere else and buy a piece of ground at a
reasonable rate,” Hoffman said. “But I still haven’t given up hope on doing something like this in Fort Collins.”

It may not be such a good year for people who’d like to get into a house in Fort Collins for under $100,000. The Group Inc.’s Larry Kendall said that in the third quarter of 1995, for example, homes in the less than $100,000 range sold about 43 percent faster than they came on the market. “If we continue at this rate, you’re…

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