Boulder, Colo.—Public housing agencies in many cities are looking for innovative ways to deliver affordable housing, but this city’s authority jumped further out front than most by undertaking land development to subsidize its own operations and create a wide array of low-cost living options at the Holiday Neighborhood here.
The housing authority, which renamed itself Boulder Housing Partners (BHP) in 2002, handled entitlements and infrastructure development for the 27-acre development on the site of an old drive-in theater on the northern entry to the city. It relied on developers to whom it sold building sites to create a wide range of housing products serving all income groups, including a 49-unit scattered-site low-income housing tax-credit deal.
BHP only sold sites to developers who agreed to make 40 percent of their units affordable and adhere to strict design guidelines. That’s not as onerous as it sounds, considering that the city of Boulder’s inclusionary zoning law requires at least 20 percent affordability.
Plus, BHP offered a substantial discount on land and took all the entitlement risk, said Cindy Brown, BHP’s co-executive director.
There will be a total of 333 residential units, and 138 of those are or will be deemed affordable. There will be a total of 195 units for sale at market prices, which range between $300,000 and $760,000, Brown said.
The affordable units include 49 held by BHP and financed with tax credits, three units held by Emergency Family Assistance for persons earning no more than 30 percent of area median income (AMI) and 86 units for sale to households earning up to 60 percent or up to 80 percent of AMI.
The affordable for-sale units have deed restrictions to keep them affordable in perpetuity. The tax credit deal has targeting of 20 units at up to 50 percent of AMI and 29 percent at up to 40 percent of AMI.
The site includes small local businesses, a two-acre park, and community gardens. Ten of the rental units have Sec. 8 assistance and a McKinney Homeless Assistance Program grant.
Rather than build a tax credit project in the middle of this master-planned community, BHP bought 49 of the units built by its builder clients. “Our intention was that it should be a seamless part of the project, not segregated in anyway,” explained Brown.
The buy-back cost just shy of $8 million. It was financed with tax credit proceeds of $3.76 million from MMA Financial and a loan of $2.38 million from First Bank of Boulder.
As part of its inclusionary zoning program, the city of Boulder determines what sales price will be affordable to households of different sizes at about 60 percent of AMI. These prices are generally not enough to cover the actual costs to build. For its tax credit units, BHP negotiated purchase prices that reflected the city’s inclusionary zoning prices, and purchased the units at less than cost, Brown said.
Land development costs other than acquisition were about $8.2 million, including a “project administration” fee of $750,000 as well as extra work that would benefit adjoining parcels and for which BHP was reimbursed. The organization paid $3.8 million to acquire the land from the city.
The sales prices of the land varied between $11 and $22 per square foot. Land sales generated about $10.9 million, according to BHP. The figure also includes $350,000 that was used as BHP’s own equity for the tax credit acquisitions. BHP financed the land purchase with a loan guaranteed under the federal Sec. 108 loan guarantee program.
BHP broke ground on roads, sewers, and other infrastructure in early 2003. The last phase of the development, which consists of single-family homes, will be compeeted in 2007.