By Amy Reinholds
At the April 23 Lyons Planning and Community Development Commission (PCDC) meeting, Town Planner Paul Glasgow reported that Summit Housing Group determined it cannot apply for the "9 percent" Low Income Housing Tax Credits (LIHTC) in this year's application round.
Summit Housing Group, which was assigned the purchase and sale agreement to purchase Lyons Valley Park, Filing 8, Tract A from Keith Bell, completed some due diligence tasks this past week related to a proposal last month for 43 affordable rental homes.
Glasgow said that Summit determined that the title commitment for Filing 8, Tract A that is “subject to PRD” (used in 1969-1979 to allow multi-family housing), only
allows that density on 4.13 acres, which means only 27 homes, too low for Summit to have a viable project. Instead, to get the 43 homes originally planned for, Summit decided to apply for a Planned Unit Development (PUD) zoning through the Town of Lyons process. This zoning process will start with an application before the PCDC.
Summit can apply for the more flexible "4 percent" federal LIHTC, but that type of funding from investors won't cover as much of the cost of the project. Glasgow did say that Summit could go through the "9 percent" application process in a future round in another year. Also, Summit could try to acquire more of the Lyons Valley Park lots that are designated for multi-family housing.
Summit is still completing a geotechnical engineering assessment, which also could affect the company's next steps
The federal LIHTC program is a source of funding that helps developers build rental homes at lower cost. The higher subsidy of tax credits to cover 70 percent of the costs of affordable units in a project (also referred to as “9 percent tax credits”) has a final application deadline of June 1. The so-called “4 percent tax credits” program has later deadlines, a more flexible schedule, and more options to apply. But it only covers 30 percent of the costs of affordable rentals in a development, and the affordable housing developers must find other sources of funding to make the project work.
The LIHTC gives investors a reduction in their federal tax liability for every dollar they invest in financing to develop affordable rental housing. The investors’ equity contribution subsidizes the development, allowing housing units to rent at below-market rates. For details about LIHTC, see chfainfo.com/arh/lihtc/overview.
In addition to all Town of Lyons processes that include public input, like the zoning process that starts with the PCDC, the architect from Summit also plans community outreach activities.
Lyons Valley Village, a co-housing community, is an example of existing multifamily buildings in Lyons Valley Park that are compatible with the surrounding neighborhood.
Summit Housing Group won a request for proposals process last month, after a selection committee, including representatives from the PCDC and the Lyons Valley Park homeowners association, brought forward two finalists. Summit, based in Missoula, Mt., is a development company that specializes in low-income tax credit and mixed-use developments. It develops and manages rental properties in 6 states, including Montana, Wyoming, Utah, and Colorado, all which include portions affordable to people who make 60% of the area median incomes or less. The latest homes in Colorado are at 1205 Pace St. in Longmont.
The original proposal for Lyons includes a total of 43 rental homes (one is for the on-site property manager) in 12 buildings that are two stories. The buildings include 24 two-bedroom/2 bath, 1200 s.f. homes and 19 three-bedroom/2 bath, 1500 s.f. homes. In contrast to the 12 buildings proposed by Summit, about 25 large, market-rate, single-family homes could be built on the same land, according to Clay Dusel, a Lyons Valley Park resident and a PCDC commissioner, who spoke at a March 12 meeting.
Summit's original proposal said that if the company could meet the June 1 deadline for the higher subsidy of "9 percent" federal tax credits for investors, more of the 42 rentals could be set aside for households who earn 30-50 percent of the area median income. A presentation from Rusty Snow of Summit to the trustees at a March 12 meeting showed that 30 percent of the area median income means a range of $20,640-$31,830 annual income for a one- to five-person household, and the range of affordable monthly rents for that income, based on household size, starts at $552-$766. And 50 percent of the area median income means a range of $34,400-$53,050 annual income for a one- to five-person household, and the range of affordable monthly rents for that income, based on household size, starts at $921-$1276.
If Summit can only get the lower level of tax credits, most of the rentals would be for households that earn 50-60 percent of the area median income. The rentals could be intended for households that earn as much as 60 percent of the area median income, which means a range of $41,280-$63,660 annual income for a one- to five-person household. The range of affordable monthly rents for that income, based on household size, starts at $1033-$1532.
Supporters of affordable housing will want to see what other funding Summit might be able to secure to still set aside rentals for households who earn in that lower range of annual income.
In the past two years, the Lyons Board of Trustees has been trying to find land for affordable housing, to not lose $4 million in federal Community Development Block Grant-Disaster Recovery (CDBG-DR) funds set aside for Lyons. Other federal funds were lost in 2015 when a proposal for using part of Bohn Park to build subsidized, affordable Boulder County Housing Authority rentals and some Habitat for Humanity for-sale affordable homes (a total of 50-70 units) was rejected in a town vote: 498 Lyons voters supported it, and 614 Lyons voters opposed it. However, with $4 million still reserved for Lyons in the years that followed, the trustees have been pursuing several smaller options for housing.
There are currently 26 permanently affordable rental homes in the Town of Lyons (already in town before the September 2013 flood): eight apartments at Bloomfield Place near the Stone Cup cafe, 12 apartments at Walter Self Senior Housing near the post office, and six apartments at Mountain Gate on 2nd Ave, all operated by the Boulder County Housing Authority. The only post-flood affordable housing currently being built is at 2nd Avenue and Park Street where Habitat for Humanity of the St. Vrain Valley is building three duplexes (a total of 6 homes) on land the non-profit purchased at the end of 2016. To volunteer, sign up at www.stvrainhabitat.org/construction. The Town of Lyons lost about 76-94 flood-destroyed homes in the 2013 flood.
Also at the April 23 PCDC meeting, the commissioners unanimously approved a conditional use review for a new accessory dwelling unit (ADU), following the town code for mother-in-law apartments or carriage houses in single family residential lots (zoned R-1). This conditional use review will go to the Board of Trustees for final approval. If approved, it will be the 4th ADU approved by in the Town of Lyons.
The proposed ADU is for 1024 4th Avenue, which currently does not have a building on it. The owners are in process of building a primary residence with a storage garage and plan to convert the storage area above the garage into an ADU. There were no public comments on this ADU proposal at the PCDC public hearing, but nearby neighbors were notified as part of the regular process, and one neighbor wrote a letter in support of the application.
According to the application, the proposed ADU complies with all Town of Lyons Sec. 16-10-70 Accessory Dwelling Unit requirements, including that the owner will occupy the principal residence while the ADU is rented, and there will be no short-term vacation rentals on the property.
A process for adding accessory dwelling units (ADUs), small carriage houses, mother-in-law apartments, or garage apartments to single family home residential lots has been shaped in the Town of Lyons during the past few years, aiming to encourage more rentals in town at lower costs because of the size, but still market rate.
This column is a weekly commentary (opinion column) in the Lyons Recorder about affordable housing after the September 2013 flood disaster in Lyons. If you have any questions, comments, or complaints about this column, please contact me directly at areinholds @ hotmail.com. For a history of post-flood efforts for affordable housing in Lyons, you can read previous columns from both Lyons-area newspapers posted on my blog at http://lyonscoloradonews.wordpress.com.