Grant

City & County of Denver ($250,000)

Program-Related Investment

Enterprise Community Partners ($2,000,000)

Background

Due to changes in living preferences and the rising popularity of urban settings, the demand for housing in Denver has risen drastically. This interest in urban living has increased market demand for new and existing urban housing that is out of reach of lower income households. Denver’s working families who earn between $20,000 and $50,000 annually spend a disproportionate share of their gross income — 59 percent — on combined housing and transportation. Tied to this increased desirability of urban living in Denver is the potential to lose large amounts of existing affordable housing that is accessible to downtown employment. A recent market study concluded that an additional 25,000 units are needed to meet the demand of low-income households. In 2004, voters in the Denver metropolitan area approved a $4.7 billion expansion of its mass transit system. Denver is using this major public investment as a platform for economic development and to improve the affordability of the Denver region for working families, seniors, and the formerly homeless. Strong recent employment and income growth have increased rents, while growing numbers of foreclosures and tightening credit have increased the number of renters, which has reduced vacancy rates by two percent and pushed rents higher. More than 53 percent of people living in rental housing have incomes at or below 60 percent of area median income. By investing in affordable housing opportunities near mass transit, Denver envisions a reduction in these costs for many families, and thus creating economic opportunities for its workforce and businesses.

Project Description

The PRI to Enterprise will capitalize Denver’s $15 million Transit-Oriented Development (TOD) Fund, a ten-year initiative that will provide financing to preserve affordable housing within one half mile of existing and new rail service and a quarter mile of frequent bus routes. The TOD Fund is a partnership among the City and County of Denver, Enterprise, and the Urban Land Conservancy. While the Fund will use a participation loan structure and will be managed by Enterprise, all resources from the Fund will be lent to the Urban Land Conservancy, a new nonprofit and supporting organization of the Denver Foundation that was created to acquire and control assets for public and charitable purposes. Urban Land Conservancy will target three types of properties: existing federally-assisted rental properties; existing unsubsidized rental properties that are currently affordable to households at or below 60 percent of area median income; and currently vacant or commercial properties with desirable locations for the creation of new affordable housing. The TOD Fund will enable the Urban Land Conservancy to hold properties for up to five years, which is considerably longer than most similar funds allow, but given the market conditions near transit stations, it will provide the maximum flexibility to secure long-term subsidies to preserve existing rental housing. Urban Land Conservancy plans to work with partners and capital providers to increase the density on many sites by adding more affordable housing and complementary commercial development. The grant will help create a database to track preservation opportunities and analyze local real markets to ensure that Urban Land Conservancy pays reasonable prices for properties.

Contact

Derek Woodbury
Marketing & Public Relations Specialist
Denver Office of Economic Development
201 W. Colfax Ave., Dept. 1005
Denver, CO 80202
(720) 913-1608
derek.woodbury@denvergov.org