An innovative program seeks to help families that have been struggling with the high cost of housing in Denver.
Under a two-year pilot, the city will help buy down the rents for families to live in vacant market-rate apartments. The initiative, which was given the go-ahead in July, will assist households earning between 40% and 80% of the area median income, including those who have narrowly missed out on other housing programs.
“There’s tons of working families that make just enough that they don’t qualify for programs but still have incredible rent burdens,” says Celia Smoot, director of housing for the Local Initiatives Support Corp. (LISC), which will serve as the program’s fund manager and partner with the Denver Housing Authority (DHA). “Many of these families are one paycheck or one bad incident away from being in the most vulnerable position. We want to keep families from falling into that category.”
The program seeks to create affordable housing options by putting empty apartments within financial reach of many workers, including teachers, police officers, and health-care staff who are at risk of being priced out of Denver. The average rent in the region increased to $1,420 in the first quarter from about $1,383 during the same period in 2017, according to the Apartment Association of Metro Denver.
In addition to meeting income requirements, participants must work full time and participate in financial coaching sessions.
The City Council approved a nearly $1.2 million funding agreement with DHA to run the LIVE (Lower Income Voucher Equity) Denver program. The city has also been talking with several employers, including the Colorado Health Foundation and St. Joseph Hospital, about supporting the program to expand it to even more families.
“The city’s investment is just one piece,” says Laura Brudzynski, manager of housing policy and programs at the Denver Office of Economic Development. “We hope to also leverage employer investment as well as foundation investment. The recent approval (of the City Council) makes that framework possible.”
About 125 individuals and families will participate in the initial pilot, which is expected to begin this fall. They’ll receive subsidies to ensure that they pay no more than 35% of their income toward housing costs.
More than 52,000 households in Denver have a household income within the targeted income range of the program (a family of four would have an income range of $33,560 and $67,120). Approximately 13,000 renters within this population are severely burdened by the cost of housing, meaning they pay more than 50% of their income on housing costs.
“During this two-year period, families will have a breather of not paying 50% of all their take-home money to keep a roof over their heads,” Smoot says. “They’ll be able to save more money and stabilize their families.”
The financial coaching will be a key component of the program, adds Brudzynski. Participants will set financial goals based on their income and financial situation. Some families may be interested in becoming homeowners while others may want to concentrate on reducing their debt.
In addition, the program will set aside 5% of the monthly rent payments in an account on behalf of each participating family or individual to build their savings.
Supporters have had to fight the perception that the program would be paying for people with low incomes in live in ultra high-end apartments and be supporting high market rents. They say that’s not the case as the program will have strict guidelines. In addition, an advisory committee will be established to help implement and evaluate the program.
One move will be to put in rent protections, so a family will be matched with an apartment that won’t put them in a position of paying more than 50% of their income in housing without the LIVE Denver subsidy.
When officials gauged the interest of market-rate apartment owners to participate in the program last fall, they heard back from representatives of about 40 properties, which represented more than 400 units across the city, says Brudzynski.
This initial “request for qualifications” determined the initial list of interested property owners. Now that the program has been approved, DHA will follow up with these owners to examine appropriate rent levels and work out other details.
LIVE Denver supporters think the program can be a model for other cities.“We’re trying to focus on helping the missing middle, helping these working families, and trying to demystify people’s ideas about what it means to support low-income families,” Smoot says.