Rare three-bedroom affordable housing planned in Denver’s far northeast corner

There’s something unusual about the 252 units of affordable housing Dominium plans to build near the 61st and Peña A Line station in northeast Denver.

Rendering of housing unit at East Range Crossing (City of Denver)

There’s something unusual about the 252 units of affordable housing Dominium plans to build near the 61st and Peña A Line station in northeast Denver: Almost half of the units will have three bedrooms.

This type of family housing has been in short supply, and the presence of larger units, along with on-site open space and playgrounds, made it relatively easy for city officials to say yes to a request for a $3 million low-interest loan to complete the financing for the project.

East Range Crossing, as Dominium is calling the project, will be built on 12.5 acres at 5810 Argonne St., about a mile from the train station and just north of Green Valley Ranch. That’s too far from the station to really be considered “transit-oriented development,” and the developer said he expects residents will own and use cars, particularly because so many of them will be families with kids. Still, the proximity of the station means residents there will at least have other options for getting to work.

Plans call for 120 three-bedroom units, 12 two-bedroom units and 12 one-bedroom units. They’ll be restricted to tenants earning 60 percent of area median income or less, $35,280 for a single adult and $50,340 for a family of four, and management is committed to accepting Section 8 vouchers.

The city loan helps make the $65 million project feasible after Dominium pulled together private financing and tax-credit financing reserved for affordable housing projects.

Councilwoman At-large Robin Kniech said the city will need to push developers to provide family housing closer to 30 percent of AMI ($25,170 for a family of four) if it’s going to achieve its housing goals. The city now has access to a $15 million a year affordable housing fund, and that money represents important leverage.

“If we are going to meet our goals, we will need to do it more in projects like this,” she said.

Dominium is one of the largest affordable housing developers in the country, but in Colorado, the company has been more involved in property management and renovation of existing buildings. This project is the first new construction the company plans to undertake in the Denver metro area.

Ron Mehl of Dominium said the company saw two reasons to build three bedrooms, one of which seems pretty obvious.

“When we look at the demographics, we see the need for more family housing,” he said.

But there’s a benefit to the developer as well, he said. The largest share of construction costs come from the bathrooms and the kitchen. You can charge a little more rent for a three-bedroom, two-bathroom than you can for a two-bedroom, two-bath, but those larger units don’t cost much more to build. That makes the margins a little better and financing a little easier to pull together.

That boost on the margins is even more important in affordable housing projects, Mehl said, because so many of the other costs are the same as those of market-rate developers, from the land prices to the utility installation.

That’s a challenge the city will need to face head on if it wants developers to build family housing at lower income points, as Kniech suggested. Asked if the city will need to provide higher subsidies to developers if they want a higher level of affordability, Mehl said, “They’re going to have to.”

If it takes $3 million to close the gap between Dominium’s costs and the available financing, it would take even more if he were renting to people earning 50 or 30 percent of AMI.

At the same time, Mehl said, there is still a lot of need at those middle-income levels.

“There is a missing middle,” he said. “We have a lot of people come in who are over-income qualified, and there only option is to go to market-rate, which they can’t do. That is a really important need for the middle income group of attainable housing seekers.”

Mehl said the units at East Range Crossing will feel spacious and have amenities more often found in single-family housing, like full-size washers and dryers.

There will be on-site property management, a pool and playgrounds. The project will connect East 60th Avenue between Tower Road and Dunkirk Street, and the developer will pay a fee to help develop additional park space in the area.

Mehl said Dominium hopes to close on the deal before the end of the year and anticipates an 18-month construction period with phased occupancy.

Rendering of housing unit at East Range Crossing (City of Denver)
Rendering of housing unit at East Range Crossing. (City of Denver)

Erica Meltzer

Author: Erica Meltzer

Erica Meltzer covers government and politics. She's worked for newspapers in Colorado, Arizona and Illinois and once won a First Amendment Award by showing up in the wrong place at the wrong time. She served in the Peace Corps in Paraguay and can swear fluently in Guarani. She gets emotional about public libraries. Contact Erica Meltzer at 303-502-2802, emeltzer@denverite.com or @meltzere.