Colorado Housing and Finance Authority (CHFA)
Colorado is in the midst of an affordable housing crisis. The availability of affordable rental housing units is not in line with residents’ growing needs as rents escalate, the population increases, and Baby Boomers downsize. Compounding the problem is the risk of existing affordable units becoming unaffordable or outdated. Affordable rental housing developments have affordability restrictions placed on them that ensure their units are rented at low rates during periods of 30 to 40 years. When affordability restrictions expire, rents are permitted to convert to private market rates. Over the next decade, the affordability restrictions on approximately 22,000 units are set to expire. Given that Colorado’s median rent has increased 49 percent in the last five years, affordable units are highly vulnerable to market rate conversion. Additionally, affordable properties that are decades old need upgrades and repairs to extend their long-term livability.
A focus on preservation is key to addressing these issues. Preservation refers to ensuring that long term affordability is maintained by keeping rent restrictions in place and supporting renovations. Preservation brings several benefits to a community and its economy. It keeps low income families in their homes, helping to maintain neighborhood stability, character, and diversity. When compared to the cost of constructing new affordable properties, preserving a property can cost one half to two thirds less and doesn’t require new land or rezoning. Energy consumption and maintenance costs may also be reduced as energy efficient upgrades are made to aging properties.
In 2016, Colorado Housing and Finance Authority (CHFA) partnered with other stakeholders of affordable housing to form the Housing Preservation Network (HPN) to coordinate preservation efforts and implement a statewide strategy to preserve Colorado’s affordable rental housing stock. In 2016 alone, HPN partners helped to preserve 4,936 affordable rental housing units by supporting property improvements, and extending rental assistance and affordability contracts.
HPN is comprised of CHFA, Colorado Department of Local Affairs-Division of Housing (DOLA-DOH), U.S. Department of Housing and Urban Development (HUD), USDA, local governments such as City and County of Denver, Adams County, City of Colorado Springs, City of Aurora, City of Golden, local housing authorities, Enterprise Community Partners, Mile High Connects, Gary Community Investments, Mile High Community Loan Fund, and many others.
CHFA and Mile High Connects have been collaborating on meeting mutual goals such as affordable housing preservation and reducing transportation costs. CHFA is an investment partner of Mile High Connects and participates in its steering committee, strategic planning committee, and advisory council. Mile High Connects has been a key partner of HPN from its inception. As part of its work with HPN, Mile High Connects is developing additional resources to support preservation through its Community Investment Platform.
Developing new preservation resources is among the many components of HPN’s strategic plan. One of the most important tasks was the creation and implementation of a preservation properties database. This tool aggregates data from multiple sources to report, analyze, and map the inventory of affordable units throughout Colorado. It promotes proactive, informed decision making by monitoring properties that are most at risk of losing affordability restrictions and rental assistance, thus flagging those of highest priority.
Other important elements of HPN’s strategic plan are engaging and collaborating with property owners and other stakeholders, targeting finance resources, and sharing best practices and policy options. A large majority—71 percent—of the tasks outlined in the strategic plan have been completed or are underway.
In addition to its work with HPN, CHFA is identifying more ways to support affordable housing preservation. A pilot program to support upgrades to single family and small multifamily properties on the Western Slope was recently launched in partnership with the Delta Housing Authority and DOLA-DOH.
We look forward to continuing to work with our partners to support the preservation of affordable housing throughout Colorado.
Special thanks to Beth Truby for contributing to this article.
Beth Truby is the Preservation Program Manager at the Colorado Housing and Finance Authority and has 30 years of experience in affordable housing and community development. At the Authority, Beth focuses on preserving existing affordable housing units statewide.