When federal funding began to dwindle more than a decade ago, local housing authorities were pushed to develop new strategies to plug budget holes.
They looked for private funding sources and began supporting low-income projects by adding market-rate rentals.
Even with the added complexities of working with the private sector, Front Range housing authorities say what were supposed to be a short-term fixes have made them more financially stable and that they’ve found other benefits to mixed-income neighborhoods.
“Starting back about 15 years ago, I remember a number of housing authorities were being challenged to be entrepreneurial,” said Pat Coyle, director of Colorado’s Division of Housing. “What you are seeing now is a product of that challenge.”
The mixed neighborhoods allow housing authorities to make more money to compensate for cuts and, in some cases, to subsidize housing in other projects where government subsidies and rent collected from low-income residents don’t cover the cost of maintaining a property.
The strategy has become more refined over the years, and housing authorities now often have to operate as for-profit businesses do, Coyle says.
“The notion of affordable housing only being offered by housing authorities is not accurate anymore,” Coyle said. “When you look at where is creativity coming from, it’s not only from housing authorities, but also within the private sector.”
Adams County’s housing authority has focused on buying cheap properties that can be rehabilitated using a combination of private-sector investments, grants and low-cost loans.
The improvements allow some units to attract higher-income residents to turn the complex into a mixed-income neighborhood.
Program vouchers In Boulder, instead of owning properties that are designated only for Section 8 tenants, the county’s housing authority now uses only program vouchers. Section 8 tenants have flexibility to live where they want, and the authority has flexibility to own properties that can rent to a mix of people and have fewer regulations attached.
But Denver’s largest investments have focused on demolishing crumbling housing projects, replacing them with energy-efficient and green-energy powered units that use solar and geothermal energy to cut operating expenses. The Mariposa Project, formerly the South Lincoln homes, has been lauded nationally as a model.
“We focus first on replacing on a one-for-one basis the public housing, so there is a preservation element,” Denver Housing Authority executive director Ismael Guerrero said,
“but we do it in a smarter more diverse and less-concentrated approach.”
Density was tripled in the neighborhood near the light-rail station at West 10th Avenue and Osage Street, and two new tiers of rental pricing were added, including workforce housing and market-rate rentals that decrease the concentration of poverty.
Advocates of mixed neighborhoods include the federal Department of Housing and Urban Development.
“There’s no individual stigmatization associated with living in a mixed-income community because you can be living next door to someone paying market rate or 50 percent, and really there’s no difference in the unit,” said HUD regional administrator Rick Garcia. “They also attract retail and other service needs that often are neglected and unavailable to traditional public housing.”
Analysts, however, say not every project has worked that way, adding that there are possibilities for unequal treatment of residents.
“It gets complex when housing authorities have to get banks to agree to let them mix sources of funding,” said Carrie Makarewicz, assistant professor at the University of Colorado’s College of Architecture and Planning. “At times, developers have stringent policies geared to more low-income tenants.”
“Thoughtful, transparent” Some of the examples she has seen across the country are restrictions against sitting on a porch, sitting at the development’s parks and hanging clothes outside to dry. Other times, tenants who are in the market-rate units aren’t informed they live in mixed-income neighborhoods, Makarewicz said.
“But the more high-profile they get, the more likely it is (that) the process will be more thoughtful and transparent,” Makarewicz said. “All phases in the process are getting better.”
Stephanie Hatt — who for eight years has lived in Thornton’s Village of Yorkshire Apartments, which was purchased last year by the Adams County Housing Authority — said she is still comfortable now that the neighborhood is mixed.
“The change is still new to us, but it seems the changes are good for the community,” Hatt said.
Unable to foresee any new federal funding on the horizon, making the projects work as a way to increase revenue has become a necessity.
“Some of our properties may make a modest income; some are costing us a bit. But between all of them, we are financially sustainable,” said Boulder County Housing Authority executive director Willa Williford.
Williford said sequestration cuts this year caused a shortfall of more than $500,000 on the authority’s $13 million budget.
That money would have covered the government-subsidy portion of rent for about 58 families. Instead of displacing those families, the authority is taking money from reserves. But any new vacancies in the Section 8 program are not being filled.
And the number of people needing assistance only continues to increase.
Boulder County’s Josephine Commons Development, a 74-unit senior apartment building that opened in 2012 in Lafayette, filled up in five days.
In Denver, a record number of families — about 20,000 — recently applied for next year’s Section 8 vouchers and openings.
The exact number of spots available will depend on how many people transfer or drop from the program, but Denver typically has between 500 and 800 spots to offer.
That’s despite the fact that Denver has increased the number of available units and added some Section 8 vouchers in recent years.
“Whatever incremental units we’re able to add comes nowhere near the demand,” Denver’s Guerrero said.
Adams County’s housing authority has also been adding new units.
The authority is in the process of planning redevelopment of the 200-unit Village of Yorkshire complex.
Adams County Housing Authority executive director Don May says the agency is always on the lookout for properties that are in bad shape and therefore affordable.
Before the properties are purchased, the authority analyzes how much it would cost to fix them.
Excited about updatesThe housing authority paid about $8 million for the Yorkshire complex, in south Thornton, and will spend another $12 million to renovate the apartment units.
Charlotte Weigel, a 48-year-old single mother of three teenagers, is thankful for having just completed a year at Yorkshire.
Although she and the remaining residents at the complex will have to move from apartment to apartment as the renovations are completed, Weigel said she is excited about the updates, which will include new kitchen cabinets, roof replacements, and new energy-efficient windows and appliances.
“That makes sense,” Weigel said of moving. “I moved three times in one year before, so this is fine.”
After the renovations, renters will pay less than $100 more than they do now. Twenty-five families who use Section 8 vouchers at the property will continue to use their vouchers, and all units will still be below market rate, May said.
“Our intent from the start was to expand out affordability,” May said.
But other authorities have experimented with mixing the market-rate units where renters don’t have to be classified as low income, and they pay full rent.
Denver keeps any excess revenue generated by those market-rate units to invest in the same property, Guerrero said.
For Adams, another potentially big project is on the horizon: a development — including housing, retail and office space — around a future Westminster light-rail station.
Next month, the authority and several nonprofits will celebrate the opening of The Center for Career and Community Enrichment, a new resource center at the corner of West 71st Avenue and Federal Boulevard.
May said he hopes that center will spur the development he envisions around it.
“No matter what we put over there — maybe a senior project or other affordable housing — we want the residents to be able to access services that they can use to improve their situation, like access to job training, transportation, whatever it may be,” he said.
The project, and the tie-in with having that housing next to public transportation, is exactly what HUD is starting to promote.
“It takes time to put together these creative financial schemes,” HUD’s Garcia said. “The results are wonderful projects. It just takes some time.”
Yesenia Robles: 303-954-1372, yrobles@denverpost.com or
