A long-planned effort to create more attainable housing for Hayden’s essential workers is moving forward after the state awarded the town’s housing authority a $1.6 million grant to build an eight-unit rental development designed for teachers, firefighters and nonprofit employees who have struggled to find affordable homes.

Funding for Poplar Commons, announced by the Colorado Department of Local Affairs in a Dec. 31 DOLA news release, closes a major financial gap for the Hayden Municipal Housing Authority, which has been developing Poplar Commons as part of a broader push to expand the town’s affordable housing options.

In an interview with the newspaper Monday, Hayden Town Manager Mathew Mendisco said the project fills a crucial hole in Hayden’s housing market for those making roughly 60% to 80% of the area median income, or roughly $50,000 to $70,000 per year. 

Earners in this range often make too little for market-rate housing, but too much to qualify for deeper subsidy programs, leaving them in a gray area that often restricts the feasibility of finding housing in Routt County. 

“As a result of that grant, we’re going to break ground and finish this project this year, and by the end of the year, we’re going to have eight units for teachers, child care workers, nonprofit employees,” said Mendisco. “These are such essential services and we need to have decent housing that they can afford.”

Poplar Commons emerged after Hayden officials recognized that existing rural housing programs didn’t fully address affordability gaps in smaller communities. 

While Hayden’s Prairie Run — the $70 million deed-restricted mixed housing project of up to 135 units set to complete construction this year — is a step in the right direction, said Mendisco, that project will serve residents making 80% of AMI or above, leaving a gap in housing for lower-income workers. 

According to Mendisco, the town joined a pilot initiative run by the Colorado Housing and Finance Authority, or CHFA, which paired 40 participating communities with consultants to model how to develop smaller-scale, lower-income-based projects outside the state’s urban areas.

Typically, CHFA funding supports large multifamily developments that benefit from scale and construction discounts, said Mendisco. But the pilot program sought to adapt that model for places like Hayden and Leadville — the only two communities out of 40 ultimately chosen to move forward with this new rural financing structure.

“The whole point was … figuring out how to do this on a very small scale,” Mendisco said. “A lot of people may think that if you build less, it’s cheaper — it’s actually not. Per unit, it’s more expensive to build smaller, because you don’t get the kind of volume in terms of the pricing on materials and that sort of thing.”

The Poplar Commons team secured both primary CHFA financing and what Mendisco described as a “soft second,” a form of flexible secondary funding that helps rural projects when traditional financing falls short. 

Even with support from the state housing authority, however, the project faced a substantial shortfall until the DOLA Division of Housing stepped in.

On average, the state typically contributes about $55,000 per unit to affordable developments, Mendisco said. For Poplar Commons, that figure jumped to $200,000 per unit — underscoring the unique constraints and costs that small rural towns face when trying to provide their own affordable housing.

“I think it speaks to how good the project is going to be,” said Mendisco. “Both the Division of Housing and the CHFA believed in it, and that Division of Housing grant basically solidified it for this project to actually happen.”

When finished, the development will include four two-bedroom units, each paired with an attached one-bedroom unit akin to accessory dwelling units integrated into the same structures, said Mendisco.

He added that the Hayden Municipal Housing Authority will not only develop the project, but also intends to manage it through a part-time or full-time employee. 

“We’re going to have full control over this, so that if somebody’s not performing, we can just let them go or we can discipline them,” said Mendisco. “If we end up hiring a property management company, they are accountable to us, just like any other contract.”

He noted that the Poplar Commons units will be similar to duplex units, meaning there will not be common areas and hallways that need to be regularly cleaned. The town intends to contract with the Hayden Parks and Recreation Department to maintain the areas outside the building. 

“The standards of which we hold ourselves to right now, will be the standard of which is applied to these areas,” said Mendisco, “which I think, for the most part, we do pretty well in the town of Hayden.” 

Mendisco said the motivation behind Poplar Commons is rooted in local workforce challenges. Several candidates for positions in Hayden’s schools and public services have declined offers after finding no available housing, a sentiment echoed last year by hiring committee members in Steamboat Springs. 

For a small town, said Mendisco, losing even one prospective teacher or firefighter can have an outsized effect.

“This is going to be that kind of housing,” he said. “We were missing a segment of our workforce in terms of affordability, and this project fills that gap.”

Construction on Poplar Commons is expected to begin later this year and finish before the end of 2026, with units opening up shortly thereafter.