Investors just promised $24 million to keep Denver neighborhoods affordable — and then they’re going statewide

A coalition of nonprofits and foundations will create one of the largest private investments in affordable housing that Colorado has ever seen.

New construction and an old home in City Park West. Sept. 18, 2017. (Kevin J. Beaty/Denverite)

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New construction and an old home in City Park West. Sept. 18, 2017. (Kevin J. Beaty/Denverite) denver; colorado; denverite; kevinjbeaty; city park west; development; residential real estate; construction; gentrification;
New construction and an old home in City Park West. Sept. 18, 2017. (Kevin J. Beaty/Denverite)

A coalition of nonprofits and foundations will create one of the largest private investments in affordable housing that Colorado has ever seen, they announced Thursday.

Led by Gary Community Investments, they hope to create a statewide program to buy and build housing units that will remain permanently affordable.

“Colorado is one of the only states that doesn’t have a permanent source to support affordable housing.  It’s embarrassing, but it’s true,” said Christi Smith, spokeswoman for the Urban Land Conservancy, a nonprofit housing developer that is providing technical assistance for the effort.

The program, to be called Elevation Community Land Trust, will begin in Denver with a $24 million investment from several funders, which they’ll use to buy or build hundreds of housing units. Eventually, they hope to expand from the Denver metro area to the entire state of Colorado.

“We felt like there was a gap and a gap specifically in affordability and homeownership,” Dave Younggren, president and CEO of Gary Community Investments, told Denver’s Housing Advisory Committee. “We know that access to stable, safe, affordable housing impacts social determinants of health. It impacts economic stability, health, healthy food, physical environment, education and community.”

How will it work?

Elevation Community Land Trust hopes to provide about 700 housing units scattered around the Denver metro over the next five years. About half of those would be existing homes that the land trust would buy. The other half would be newly constructed townhouses and condos.

The idea of a land trust is to make housing permanently affordable by creating an unusual ownership arrangement: Elevation CLT would sell the houses to new residents, but it would keep ownership of the land. Residents own the buildings but only have long-term leases on the land.

“It’s really about the permanent affordability on the home-ownership side,” said Tracey Stewart, family economic security investment director at Gary Community Investments, which is the parent company of The Piton Foundation.

In essence, this model takes land off the market. It’s not being bought and sold, and its cost doesn’t skyrocket. This model gives residents some of the benefits of traditional homeownership, such as a permanent home and the ability to sell the house itself for a profit — although it’s a much smaller profit than under the usual homeownership model. These programs often use a formula to limit the resale price of the home.

The land trust would target households earning between 55 percent and 80 percent of area median income, up to $67,120 for a family of four.

“Families with safe, stable housing are able to focus more attention on increasing their opportunities for job readiness, employment, job retention and career development, which all contribute to long-term financial stability,” Younggren said in a news release.

What’s next?

The group will hire a CEO and president in the coming months, who will flesh out more of the details. A hiring committee involving “different community members,” will help select the leader, they said.

Elevation CLT aims to be self-sustaining within five years, meaning that it will be able to pay its bills with income from its properties and other fees.

In the long run, however, it will seek additional funding and help from the public sector to expand out from Denver to the entire state. The group has been in conversation with Denver officials, but the city hasn’t made a commitment. Stewart said some level of public investment is important to realizing the land trust’s potential, but cash is just one way various municipalities could participate. They could also help with donations of suitable land or by waiving certain fees associated with development.

Younggren said the investors hope to raise $23 million from public sources around the metro area, roughly matching the private dollars, and secure $11 million in land donations over the first five years. The average public subsidy per housing unit would be around $32,000.

Stewart said the new program represents an acknowledgment of the state’s long-building crisis.

“The recession hit, people didn’t recover, we had the crazy foreclosure movement, new people started moving into the state,” she said. “It became the perfect storm.”

The group’s funders include GCI, The Colorado Health Foundation, The Gates Family Foundation (the Colorado philanthropists, not the Microsoft ones), Bohemian Foundation, Northern Trust, Mile High United Way and The Denver Foundation. The land trust will be part of the corporate structure of Urban Land Conservancy, but ULC won’t ask for money from the trust for its own projects.

This is not the first land trust.

The Colorado Community Land Trust has used this model as part of the redevelopment of Lowry Air Force Base. Residents of Globeville and Elyria-Swansea also hope to create their own community land trust, which they announced in July. The community group aims to include 10 homes in a pilot project, and they’re seeking up to $3 million to get off the ground.

The city has not seemed particularly interested in investing in that smaller effort, as Chris Walker reported earlier this week. Erik Soliván, the city’s housing czar, told Walker that the neighborhood effort essentially wasn’t ready for that much funding yet.

The GES community organizers have argued that a smaller, local-level group would be more responsive and accountable to the neighborhoods where it own lands. That conversation has filtered up to the city’s elected leaders.

“It seems to be a disagreement with the administration over whether to do a regional land trust or a local land trust,” said Council President Albus Brooks, whose district covers Globeville and Elyria-Swansea,  at a meeting on Wednesday.

“I hear the community saying, ‘We want a local land trust for (Globeville and Elyria-Swansea), but I also hear the administration saying, ‘We don’t want to go in that direction.'”

Nola Miguel of the GES Coalition said the community group isn’t looking to the city to fully fund its community land trust. Instead, they’re seeking a “contribution to the subsidy to ensure affordability in perpetuity.” The group is also asking for money from the I-70 and National Western Center projects, which are seen as contributing to displacement in the neighborhood.

“We loved that the CLT could do homeownership for low income family,” she told the city’s Housing Advisory Committee on Thursday. “There’s no other way they could afford a home now in GES.”

Soliván said that the city was supportive of land trusts generally. He posed a rhetorical question at an earlier meeting, as he often does: “How do we stitch all that together?”

Brooks said that there’s room for both models.

“I love Gary Community Investments … They’re looking from a macro perspective, and that’s what an investment organization should do,” the council president said in a separate interview. But, he added, “we need something right now for Globeville Elyria-Swansea.”

Administrators with Gary Community Investments said they don’t see a competition between land trusts and that there should be many efforts to address housing needs on multiple levels.

Brooks suggested that some of the groups pouring money into the National Western Center and other projects would give money to a local land trust. He also said he would be “supportive” of providing city money to the local land trust, if he could convince the mayor and the rest of the council to join in.

“This is something that we could do,” he said.

But Councilwoman At-large Robin Kniech cautioned that some city leaders don’t have the information right now to make any commitments.

The City Council created an affordable housing fund last year that is expected to bring in roughly $15 million a year, but fees generated far less money than expected in the first year. City leaders will need to decide whether to keep committing general fund dollars, as they did for 2018, and how to spend that money across a range of housing programs.

“I don’t know how much money the city has to put into a land trust,” she said.

Gary Community Investments expects to “operationalize” the new trust in early 2018. They are not waiting on a public commitment, but “we need indications of interest,” Younggren said in an interview.

Andrew Kenney

Author: Andrew Kenney

Andrew Kenney writes about public spaces, Denver phenomena and whatever else. He previously worked for six years as a reporter at The News & Observer in Raleigh, N.C. His most prized possession is his collection of bizarre voicemail. Leave him one at 303-502-2803, or email akenney@denverite.com.