Affordable apartments pass first test with city of Steamboat, more to come
Steamboat Springs — The city of Steamboat Springs Planning Commission gave a unanimous nod of approval to conceptual plans for the Yampa Valley Housing Authority’s new affordable apartment building project April 30.
The project has a date for another conceptual review with City Council May 19. It’s being planned with the collaboration of the Housing Authority’s development partner, Overland Property Group.
Commission Chairwoman Kathi Meyer stepped down from last week’s vote because she is also the Housing Authority’s board president.
The Reserves at Steamboat would create 48 new apartments available to households earning 40 to 60 percent of the median income here.
YVHA Executive Director Jason Peasley said Monday that if the apartments were available for lease today, monthly rent for the two-bedroom units would range from $710 to $1,065 depending upon the renters’ household income. Three-bedroom units would rent from $820 on the low end to $1,230 at the top of the scale.
Peasley said those rents are sure to change by the time the project gets built because median income levels change from year to year.
“Maximum (rental) rates are set by the (U.S. Department of Housing and Urban Development) and change every year,” Peasley said. “We intend to manage the property to rents that are lower than maximum, whatever that turns out to be. We’re not in the business of making money off this. We want to hit a sweet spot where we’re covering costs, the project is well maintained and we have healthy (capital) reserves.”
The Reserves at Steamboat must come back through the city approval process seeking a final development permit before it has final city approval. But the biggest hurdle the project must overcome could turn out to be gaining approval from the Colorado Housing and Finance Authority for the federal income tax credits that are the key to funding the project.
In addition to the development site on Routt County Road 129/Elk River Road, an award of income tax credits from CHFA would help YVHA bring equity to the development project. The tax credits would be sold to a third party, and without the revenue from that transaction, the apartment building could not be built, Peasley said.
He confirmed Monday that his nonprofit, funded largely by the city and Routt County, met CHFA’s May 1 application deadline. The application included a detailed market study, which Peasley said confirmed what his organization already knew anecdotally — rental housing here is very tight.
A document on file at CHFA’s Web page shows Steamboat Springs’ project is among 35 submitted from around the state including large metro areas like Lakewood, Denver and Aurora. However, Steamboat is among just a handful of mountain towns that have applied. They include Newcastle, Glenwood Springs, Rifle, Basalt and Woodland Park.
There is precedent for more than one mountain town receiving tax credits; Durango and Crested Butte both had housing projects selected in 2014, Peasley said..
“We said going in this would be highly competitive, usually one in four is approved, but we’re all very optimistic,” he said.
Peasley added that Steamboat has not received an allocation of tax credits for almost 20 years and has never received tax credits from this specific CHFA program.
“Some of the things that set us apart is the overwhelming demand (for rental housing here) and the significant amount of local support with both the city and county contributing money,” he said. “We also have letters of support from community organizations.”
Peasley expects that YVHA will make a formal presentation to CHFA officials in June and learn the outcome of their application sometime this summer.
Even if it’s positive, the project still could not break ground before 2016. If YVHA is unsuccessful, Peasley said CHFA would meet with his board to explain what the issues were. If there were any deal-breakers in the application, they can be expected to point them out, he added.
Following that meeting, the Housing Authority would get back together with Overland to determine if there is enthusiasm for pursing the tax credits in the 2016 cycle.
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