Affordable housing project windfall for CB
By Mark Reaman
A significant, multi-million-dollar influx of financial help for the rental portion of Crested Butte’s major affordable housing development was announced last week. According to Crested Butte housing director Erin Ganser, the town was notified by the Colorado Housing and Finance Authority that Mineral Point (formerly Sixth and Butte) has been awarded an allocation of Low Income Housing Tax Credits (LIHTC) for the 34 rental apartments in the project. The LIHTC award should generate approximately $11 million for the estimated $16.6 million project.
“This is a highly competitive resource that will help fund our 34-unit affordable rental development to be built at Sixth and Butte,” Ganser explained. “The experience of project development partner TWG, community support, the deep need for housing, and the Town’s efforts to make the project as ‘shovel-ready’ as possible helped Mineral Point rise to the top.”
Basically, LIHTCs subsidize the acquisition, construction and rehabilitation of affordable rental housing for low- and moderate-income tenants. The federal government issues tax credits to state and other qualifying governments. State housing agencies then award the credits to private developers through a competitive process. The developers sell the credits to private investors to obtain up-front cash to help fund the affordable housing development.
Anthracite Place is an LIHTC project. Tenants have to income qualify at the time that they move in, although they are not restricted from earning above their income limit after they move in provided that their household composition doesn’t change by adding a roommate or significant other with additional income.
The units at Anthracite are restricted to 50% and 60% of the Area Median Income (AMI), or between $32,000-$45,000 in annual income for a two-person household at this time. At Mineral Point, the income of renters will be restricted to between 30% and 60% AMI, or $21,000 – $45,000. Based on data collected by the Colorado Housing and Finance Authority, many tenants at Anthracite would qualify at the lower income limits for Mineral Point.
Ganser commented that it is very hard to make a living on the piecemeal jobs that make up the valley’s seasonal economy. At the same time, the income restrictions cap the top end of the income scale at a combined $45,000 per year when people move into the LIHTC project unit, but once in, they can grow their income with no penalty or threat of having to move out.
Ganser said the other 16 units at Mineral Point are the middle-income rental units, and new units in Paradise Park will also offer middle income ownership. “Low Income Housing Tax Credits build low-income units,” she explained. “Based on the market studies and housing needs assessment, as well as the deep waitlist for Anthracite Place, we know that we have demand for low income as well middle-income housing.”
The housing project has BOZAR (Board of Zoning and Architectural Review) approval and will be ready to pull building permits by mid-June, however Ganser explained the financial closing processes with the tax credit investor and construction lender will drive the timing for the start of construction. Town anticipates that construction will start in the fall of 2023 with the goal of having rental units occupied by fall 2024.
“Final rent rates will be set when the building nears completion,” said Ganser. “But generally, rents will range from about $400 to $1,100/unit per month, depending on the unit size and household income qualifications.”
The Gunnison Valley Regional Housing Authority (GVRHA) is keeping an interest list for potential renters which can be accessed at: https://gvrha.org/rental-interested-list/. The 34 rental units should supply 40 bedrooms.
The for-sale portion of Mineral Point is in the design phase with High Mountain Concepts. Assuming a smooth BOZAR process, the town hopes to begin construction this fall as well, with completion by the end of 2024. Ganser said the town will offer 10 of the 16 units for purchase by government entities like the RTA and school district. It is anticipated that High Mountain Concepts will maintain ownership and rent the other six units. These 16 units will help round out the LIHTC rentals; they will not include any income restrictions, only a requirement that at least one occupant work full-time for a local employer.
Mineral Point combined with the build out of the Paradise Park will result in 68 new community housing units for Crested Butte. Ganser said the remaining funds needed to complete the project have not been finalized but are expected to come through the Colorado Division of Housing and Department of Local Affairs, the permanent mortgage and a possible contribution of a portion of TWG’s developer fee.