Hayden looks to leverage funds for its affordable housing community amid housing crisis | SteamboatToday.com

Hayden looks to leverage funds for its affordable housing community amid housing crisis

Hayden and developer Gorman & Company are teaming up for a new affordable housing community called Prairie Run in Hayden.
Gorman & Company/Courtesy photo

Hayden is seeking $200,000 from Routt County to help fund infrastructure work for an affordable housing project that is estimated to have a $93 million price tag.

The planned affordable housing community is one of a handful of efforts from town officials trying to address Hayden’s housing crisis. Two separate housing-needs studies conducted by Hayden and the project’s developer, Gorman & Company, have shown an extremely high demand for all types of housing in Hayden.

“In Hayden, right now you could build the ‘wrong type’ of house and it would still sell,” Hayden Town Manager Mathew Mendisco told Routt County commissioners on Monday, April 10. 

Mendisco and Kimball Crangle, Gorman & Company’s Colorado market president, had approached commissioners to ask for $200,000, while providing commissioners with some project updates. However, county commissioners decided to hold off on committing $200,000 until the official adoption of the 2024 county budget.

The planned community, named Prairie Run, is slated to have 185 units through a public-private partnership between the project’s developer and Hayden’s Municipal Housing Authority, which Town Council created in the summer of 2021. The development would be on a 23-acre site just south of West Jefferson Avenue on U.S. Highway 40.

In their presentation to commissioners, Mendisco and Crangle said the money from the county would be used to help leverage other funding from the state. 

The developer has requested an $8.6 million loan from the town to go toward the project, and the town manager noted that if the commissioners feel the need to dole out more than $200,000, it would be gladly accepted.

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At the same time, the developer is seeking to get 50 of these units a low-income housing tax credit. Crangle explained to commissioners that the developer put in an application in February in hopes of securing the tax credit.

According to the Colorado Housing and Finance Authority, developers are allowed to sell those credits to investors to help raise capital for their projects. This reduces the amount of money that the developer would otherwise have to borrow. 

As planned, the 50 units would accommodate people earning 30-60% of the area median income, which, in Routt County, is currently $71,700, but is expected to rise soon. This site will also accommodate those in the 80-140% range of the area median income.

“A healthy housing community has a spectrum of housing choices,” Crangle told commissioners. 

Additionally, Hayden and the developer have applied for a transformational housing grant, which maxes out at $10 million, for 129 of the planned units, a grant that Mendisco and Crangle noted was competitive.

This grant, administered through the Colorado Department of Local Affairs, seeks to provide flexible, low-interest and below-market-rate funding to support increases in new housing developments.

Both Hayden and Gordon & Company ran a housing needs assessment study last year. Hayden’s study was more narrow than the Gorman & Company’s and only focused on employees in Hayden.

“During the housing needs assessment, when they were establishing demand, our rental rate in the town of Hayden was literally zero,” Mendisco said. “Not one unit came up for rent that was commercially advertised.”

Mendisco noted that the study did not consider the current trend of down-valley pressure with people exiting Steamboat and moving to other parts of Routt County as the population and housing prices continue to rise. 

Gorman & Company’s study did take down-valley pressure into consideration, and the results found a need for up to 450 new housing units within the next five years. 

Crangle explained how Gorman & Company not only assessed the area median income for Routt County, but Moffat County as well, anticipating a migration of residents from Craig to Hayden.

She also noted that the affordable housing project at large is actually separated into three projects that will have different legal processes and closing dates. This mostly has to do with the fact that the developer allocated 50 units in hopes of securing a low-income housing tax credit.

Currently, six homes are envisioned to be put up for sale, but that will be considered its own project. The remaining 129 units will also be considered their own project and accounts for $68 million of the project’s estimated total cost.

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