CB council examines ways to fund Sixth and Butte affordable housing

Getting another Anthracite Place to address lower income workers?

[ By Mark Reaman ]

With the continued focus on planning for an affordable housing project in Crested Butte at the corner of Sixth and Butte, town council received a financing primer from local housing consultant Willa Williford on Monday, August 16.

The basic conclusion is that the town will end up subsidizing any project that is expected to include a lot of rental units in order to keep rents reasonable for those making below the area median income (AMI). Williford highlighted people making between 50 and 80 percent of AMI and pointed out at the 80-percent level rents should be under $1,266 a month. Right now, she estimated a typical two-bedroom unit in the North Valley was renting for $1,500 a month and a one-bedroom for $1,100. Councilmembers Will Dujardin and Jason MacMillan said they felt those estimates were low.

The goal is to come up with a plan for the site later this fall and then start construction next spring with potentially having people move in by 2023.

Williford went through a number of ways to finance housing projects using state and federal money. Using a LIHTC (Low-Income Housing Tax Credit) mechanism like what was done with Anthracite Place is probably the most financially beneficial for a big project. Williford dispelled the myth that tenants in such buildings can never exceed the original income limits without being forced to leave. “They have to meet income eligibility at the time of the application but can grow their income without penalty after that. They don’t have to turn down raises or bonuses for fear of getting evicted. That’s a myth.”

LIHTC brings in private investors by giving them 10 years of credits against federal income taxes. That provides the cash to build a project, but it comes with many federal strings. Williford provided several examples of budgets using LIHTC funds and it appeared that a 40-unit rental project might provide the best initial bang for the buck.

“Spoiler alert! There is no silver bullet,” Williford emphasized. She said the number of units could vary but investors wanted to minimize their risk with filling the units so the 40-unit project might be best suited for a LIHTC project. She indicated investors are wary of big projects in counties the size of Gunnison but also said some resort communities like Steamboat Springs and Summit have been successful building larger developments recently. In that scenario, all the people living there would start off making less than 80 percent AMI and average about 60 percent.

Williford told the council that all strategies should be pursued to get affordable housing in the region. Building a project in town was just one element of a strategic plan that included potential projects in the county and Mt. Crested Butte, buying deed restrictions on free market homes and looking for creative funding mechanisms.