BOULDER, CO. - When the public housing agency here commemorated its 40th anniversary in September, its 46 employees had good reason to celebrate. Boulder Housing Partners (BHP) has stepped boldly beyond the confines of Department of Housing and Urban Development (HUD) programs to find new and innovative ways to meet local housing needs.
One of its most notable achievements is the Holiday Neighborhood, a 27-acre development on the site of an old drive-in theater that is the winner of Affordable Housing Finance’s Readers’ Choice Award for best master-planned/inclusionary zoning project.
The project, now in the final stages of completion, represents the culmination of BHP’s decision in 1998 to undertake high-risk land development to subsidize its own operations and create a wide array of low-cost living options at the Holiday Neighborhood site.
Leading the charge was Cindy Brown, BHP’s director for development. She shares leadership of the organization with Betsy Martens, who is the director of operations. Together, they serve as co-executive directors of the agency.
The project relied on private-sector developers to whom BHP 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 (LIHTC) deal.
BHP only sold sites to developers who agreed to make at least 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 Brown. The resulting development features 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.
“Without the help of Boulder Housing Partners, we wouldn’t be able to live in this great place,” said resident Michael Podhurcak, who shares his apartment with daughter Cashlin, 6. “Due to my income, our options for living in Boulder are limited and mostly out of reach. Our options would take us away from the great schools and living conditions.”
The affordable for-sale units have deed restrictions to keep them affordable in perpetuity, and BHP’s tax credit apartments are split between 20 that are reserved for residents earning up to 50 percent of AMI and 29 for those with incomes 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 [the tax credit portion] should be a seamless part of the project, not segregated in any way,” explained Brown.
The buy-back cost just shy of $8 million and 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 completed in 2007.
The organization owns and operates a portfolio of 1,000 units, which includes a mix of project-based Sec. 8, tax-credit projects, traditional public housing, and units acquired with grants from the city of Boulder under what is called the “reduced-rent program.” The organization also operates a Sec. 8 voucher program.
Brown was project manager for the land development component of the Holiday Neighborhood. The project manager for the tax credits portion of the project was Stuart Grogan.