RE Summit: Multiple layers required to create affordable housing

LOVELAND — Agencies that help to provide affordable housing in Northern Colorado communities are finding ways to provide it, but not nearly at the level that the market might demand.

Participants in a panel discussion about affordable housing strategies at the annual BizWest Northern Colorado Real Estate Summit Wednesday said that being successful requires multiple layers of financing and numerous community partners, not just mandates from local governments.

The panel was moderated by attorney Bob Choate with the Coan, Payton & Payne LLC law firm.

Cheri Witt-Brown, executive director of the Greeley/Weld Habitat for Humanity organization — recognized as one of the most successful in the nation at building affordable units — said that today’s average families have difficulty saving to buy homes because they’re already spending large portions of their income on housing. “One in five Americans pay more than 50% of their income on housing,” Witt-Brown said.

Kristin Fritz, chief real estate officer with Housing Catalyst, the housing authority in Fort Collins, said many people have a misconception about affordable housing. “They think there’s some kind of discount. Our costs [to build housing] are the same as for all housing,” she said. To make rents within housing units affordable requires resources — such as tax credits — that are in limited supply.

Indeed, Steve Boice, manager of business finance for the Colorado Housing & Finance Authority, which funnels federal tax credits to housing projects, said that at one time Colorado did not use all of the federal credits that it had available.

“It used to be that we said [tax credits were] unlimited, because there wasn’t the demand in the state. But now it’s a competitive process. The chances are one in three of getting applications approved,” he said.

When private developers seeking tax credits to support affordable projects required by local ordinances are successful, they sometimes run into difficult-to-meet federal financing requirements placed on contractors, said Ryan Rodgers, senior vice president for development at the private company Pedcor Investments LLC.

Rodgers said that his company typically applies for some of the federal tax credits made available to the states, and then sells those to private developers. Projects built tend to be available on the higher end of affordable housing. Tenants still have to be creditworthy to secure spots in those developments, he said.

Rodgers, and other members of the panel, complained about local governments that don’t understand how affordable housing gets built. Placing requirements into an ordinance to require a certain share of a project to be affordable doesn’t work, especially when there aren’t enough federal tax credits to go around and when other funding resources also are in limited supply. The result is that projects don’t get built or the price of market-rate units in the development go up and perhaps out of reach of people who could otherwise afford them.

Fritz said that tax credits available to projects in Fort Collins would build about 70 units, which isn’t nearly enough to meet community needs. “The market isn’t providing it [affordability] naturally,” she said.

Witt-Brown said Weld County Habitat’s success has stemmed from multiple partnerships with the private sector, the public sector, community funding and more. “We’re looking at first-year teachers, firefighters and other essential workers” and working to provide housing. Projects underway will deliver about 600 housing units over the next seven years, she said. Amenities for those housing developments also stem from partnerships, such as a professional level soccer field built in collaboration with the Colorado Rapids.

“The pandemic taught us for the first time that having a safe place to shelter is important. Everyone understands that now,” she said.

Panelists said that legislative and local policy changes can help provide for more affordable housing. 

“Watch things that add cost to housing, such as impact fees, cost of water, permit fees, design standards, high energy goals,” said Fritz. “It’s always a balance of sustainability and cost. Going through the local entitlement process can add a lot of cost,” she said.

“When workers have to live outside a community and drive in, there are costs to that, too, in roads and infrastructure. If housing was considered part of infrastructure, it would open up a lot of things.”

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