Three new affordable housing projects — including a stack of family-sized units — are on track to start construction in Denver this fall at a time when the city is facing soaring unemployment and a homelessness crisis.
The three projects, which stretch from southwest Denver to the far north part of the city, received initial approval for loans from the city’s Department of Housing Stability during a City Council committee meeting Wednesday. Denver plans to kick in a total of $8.6 million in loans to get the three apartments built, a fraction of the total price tag of $93 million.
The plans are among 13 affordable housing projects the city has in the pipeline, many of them scheduled to begin construction this fall. The slate of projects represents a turning point — instead of one-bedroom and studio apartments centered downtown, these are mostly family units and deeply affordable.
“We know that the real critical need that is so difficult is the lower-income and family-sized units,” said Nick Emenhiser, housing development officer with the Denver Department of Housing Stability. “That’s really where we have shifted our focus. We have really heard that community need loud and clear.”
One of the three new projects is a rebuild of historic Pancratia Hall, on the Loretto Heights campus in southwest Denver. The 1929 hall was once a convent and later a women’s college dormitory. If everything goes according to plan, the hall will open as 72 apartments for low-income families in 2022.
A chapel inside the hall will become a four-bedroom apartment. Plans also call for preserving the basketball hoops in the old gym and incorporating them into multi-bedroom apartment designs, said Councilman Kevin Flynn, who was among the city leaders who voted to support the loans, which still need approval of the full council.
The Pancratia Hall project — part of a larger plan to put a theater and other housing units on the Loretto Heights campus — is the first affordable housing investment by the city in Flynn’s district, he said. Even though southwest Denver is one of the most affordable parts of Denver, he expects it won’t stay that way.
“Family units are very important to my district,” he said. “Families really are the key to our community.”
Families who live in the apartment complex would pay no more than 30% of their income in rent. The $25 million project includes a $3.3 million investment from the city, which is a low-interest loan with a long, flexible payback period.
The developer is also receiving state and federal historic tax credits and a loan from the Colorado Division of Housing. Westside Investments is the developer for the entire Loretto Heights project, while Hartman Ely Investments and Proximity Green are the developers for Pancratia Hall.
The developers of all three projects agreed to specific rent rates, in exchange for subsidies that come in the form of tax credits during the construction phase. There is no rent subsidy, or voucher, needed for the residents. The arrangement is called a “supply-side subsidy.”
The second project is a 150-unit apartment building at East 48th Avenue and Race Street, in the Elyria-Swansea neighborhood in north Denver. The city is pitching in $3.75 million for the $36 million development, now the site of an abandoned warehouse in the neighborhood where many residents were displaced by the expansion of Interstate 70.
The hope is that residents forced out of the neighborhood can return to live in the new building. The project, by Columbia Ventures, is expected to eventually have a few hundred apartments, many of them family-sized, when all four phases are complete.
The building will have ground-floor space for Clinica Tepeyac, a local nonprofit medical clinic, as well as retail shops.
And the third project — called Capitol Square Apartments — is now the site of a vacant automotive garage near Sherman Street and East 12th Avenue in the Capitol Hill neighborhood.
The $32 million development is envisioned as a home for middle-income professionals, including teachers, who want to live downtown and near the Capitol. It will have 103 income-restricted units, all of them one- or two-bedrooms. The city’s contribution is a $1.5 million loan.
“It’s a great location in the middle of where Capitol Hill and Civic Center come together,” said Emenhiser, calling it the ideal spot for people who work downtown but cannot afford to pay the market-rate rent downtown.
Like all the projects, the terms of the deal spell out exactly how much people can earn in order to qualify to live there. Capitol Square Apartments, for example, will have seven units set aside for households earning no more than 30% of the average median income in Denver. The average median income for a household of four in Denver is about $100,000.
City Councilwoman Amanda Sawyer called the projects “fantastic and thrilling,” and an example of the city’s “policies catching up with priorities.” For years, Denver has talked about creating more affordable housing for families.
City leaders said the timing of the projects’ final planning — in the middle of a pandemic that has walloped government budgets and closed businesses across the state — made them more significant.
“I don’t remember a package such as this coming through at a moment in history when we need this,” Councilwoman Stacie Gilmore said. “It’s wonderful to see our policy matching our values.”
The city has 13 affordable housing projects in the planning stages, with city investments totaling $17.5 million. The projects would bring 1,021 affordable apartments to the city.
As Colorado heads into a recession, the new construction will create hundreds of jobs and boost the local economy around the new buildings, said Debra Bustos, deputy director of housing opportunity in the city’s Office of Housing Stability. She called it a “mushroom effect.”
Several are expected to be complete in early to mid-2022, she said.