EAGLE — When Julieth Kennedy talks about what makes living at Eagle Villas special, her face lights up.
“The kids,” she says. “This is a kids’ property. They run this place.”
She points to the playground behind the apartment complex’s leasing office, where the bright orange spiral of a slide glistens in the sun. It’s a place her five children, ages 3 to 12, know well.
“My kids love being here,” she says. “When it’s warm they bike to school. The bus drops them off out front. They have friends nonstop. They would always say, ‘We don’t wanna go over there!’”
“Over there,” in Kennedy’s case, meant Aurora, where she frantically searched for housing in 2023 as the affordability restrictions on Eagle Villas approached expiration and the 120-unit complex in Eagle was listed for sale on the open market.
Then Ulysses Development Group, a Denver-based affordable-housing developer, stepped in. UDG acquired Eagle Villas in 2024 and, working with the Eagle County Housing and Development Authority and the state, put together a financing package to preserve the property as income-restricted housing and renovate all 120 apartments.
The deal highlights a lesser-known challenge of affordable housing: units and complexes that were designated affordable decades ago do not necessarily stay that way forever. As affordability restrictions expire, communities face a difficult choice: let the properties go to the open market, potentially displacing the residents, or find new money to acquire the homes and keep rents low.
While cheaper than building new affordable housing, preserving affordability also comes at a price. But Tori Franks, Eagle County’s resiliency director, said the cost of losing those homes can be much higher.
“The cost of losing low-income units, especially in our high-cost community, is so much more than replacing the units, which is immense,” she said. “There are real community costs to the loss of affordable housing, which include displacement, job loss and employers needing to recruit new employees, children missing school due to relocation and social infrastructure loss.”
Kennedy would have suffered many of those losses. She had begun calling around for apartments in Aurora because she knew there was nothing she could afford in Eagle. But having to move would mean more than losing her home. Kennedy’s mother and her children’s paternal grandparents and aunts live nearby and help with childcare. Her kids attend school up the hill behind the complex.
“It would have been depressing for them and definitely hard on them too if we’d had to move,” she said.
A 60-year affordability promise
Eagle Villas is a 120-unit apartment complex on Nogal Road in Eagle, built in two phases in 1994 and 1996. It is the largest income-restricted housing complex in the town of Eagle, with apartments reserved for households earning roughly 45% to 60% of the area median income, or between $62,415 and $83,229 for a family of four.
The property was built with the help of the federal Low-Income Housing Tax Credit program, which uses tax incentives to encourage private investment in affordable housing. Investors receive tax benefits in exchange for putting equity into these projects, while properties receiving the credits agree to keep rents affordable for a specified period of time. That allows developers to finance housing that rents for less than the market would otherwise support.
A constellation of regulatory agreements determines the affordability time period, which usually isn’t forever. And as the restrictions expire, a new owner can gradually raise rents toward market rates.
“At Eagle Villas, that would have been pretty substantial,” said Blaise Rastello, UDG’s vice president of development. “They could charge rents two and a half to three times more than what people were paying. If a buyer isn’t interested in maintaining an affordable property, they can let those regulations expire and displace families.”
It was exactly the scenario Eagle County wanted to avoid.
The county oversees more than 1,700 units of deed-restricted housing, ranging from apartments for low-income households to deed-restricted homes for higher-income residents. But like Eagle Villas, some of its older affordable housing stock was built in the 1990s and early 2000s, and some of those properties are now approaching the end of their affordability restrictions.
The county is currently aware of about 192 units facing that risk within the next six or seven years, Franks said. Eagle Villas became especially urgent because the property was already on the market.
UDG initially submitted an offer to buy the complex but lost to a market-rate buyer. When that buyer backed out of the contract, UDG came back to Eagle County with a proposal: Help us acquire Eagle Villas, the company said, and we’ll preserve the property as affordable housing and make the investment needed to keep the aging complex viable.
“We want partnerships,” Rastello said. “We wanted the county with us.”
The Eagle County Housing and Development Authority had wanted to buy Eagle Villas itself but didn’t have the funds to go it alone, so the agency became a partner in the deal, Rastello said.
In 2024, UDG acquired Eagle Villas in 2024 for about $40 million. Over the next 11 months, the company assembled financing for a major renovation.
Eagle County’s Housing and Development Authority contributed a $4 million loan and helped secure a $5 million loan from the Colorado Department of Local Affairs. DOLA also helped with a $3.4 million loan through its Affordable Housing Revolving Loans and HOME funds. JPMorgan Chase provided $41.4 million in construction financing and $25.4 million in permanent financing, while the National Equity Fund invested $22.9 million in equity.
The complicated financing package was necessary because preserving an aging affordable-housing complex is not simply a matter of buying it and keeping the rents low.
“All of the capital to do the renovations was not available when we put in the offer and got contracts,” Rastello said. “We were transparent with the county and state that the property needed renovation if we were going to hold it long term and maintain affordability.”
Keeping Eagle Villas viable
According to UDG, the renovation itself cost about $12.6 million.
The work went far beyond cosmetic improvements. The property received new siding, windows and roofs, additional insulation, new water heaters and heating systems, remodeled kitchens and bathrooms, new flooring and lighting, solar panels and improvements to the playground. Residents moved into an extended-stay hotel for about four or five days while work was completed in their apartments.
For Kennedy, the renovations were welcome, but came with another fear.
“That was the question everyone would ask: Is the rent gonna go up a lot?” she said.
Residents were told about the renovation plans at meetings at the property, Kennedy said. They were given moving boxes and tape and told which moving company would help them relocate temporarily.
In the end, the apartments came back better without becoming unaffordable.
“It looks beautiful,” Kennedy said. “It’s so different.”
Kennedy now pays $1,946 a month for a three-bedroom apartment. When she first moved into Eagle Villas seven years ago, the same type of apartment cost $1,399. Her rent has risen gradually over the years, including an increase of roughly $100 after the renovation.
That is still a different universe from the market-rate housing she was looking at during the scare. At The Pike, a new apartment complex in Eagle, a two-bedroom, two-bathroom apartment rents for about $3,500 a month.
She has seen what happens when people can’t afford to stay. One family she knows moved to Denver because they could no longer find affordable housing in Eagle. Now, Kennedy said, they are trying to return because their children miss their friends and community here.
“They have no life there,” she said. “They have a lot of friends at Eagle Villas.”
The county says preserving Eagle Villas was substantially less expensive than replacing the apartments with new construction — and it prevented social disruption to a well-established part of Eagle’s community.
“The cost to preserve deed restricted units or preserve existing housing units is only a fraction of the cost to build new units,” Franks said.
Why UDG does it
UDG is a for-profit developer, and preserving properties like Eagle Villas is its business. Rastello said affordable housing can be financially viable precisely because of the tax credits and public financing that make it possible to charge rents below the market rate.
“The reality is, whether you’re for-profit or nonprofit, you’re running a business,” he said. “You have to cover your costs.”
Affordable housing also gives developers a way to build a business around something that has a tangible public benefit, he said.
“I think everyone you’ll meet in this industry are professionals making a living and supporting their families,” Rastello said. “They’re also seeing tangible results of the work, which is creating housing that’s affordable for other families in locations that are really high-cost places to live. It’s helping other families.”
UDG makes money primarily through development fees rather than the cash flow from rents, Rastello said. The company can earn fees as it puts a project together and gets it operating, while investors receive tax benefits for providing equity.
That structure allows a developer to invest in a property where rents are capped by affordability requirements rather than dictated by the market. In Eagle Villas, UDG ultimately invested in a property that will remain affordable for six decades.
The preservation problem
Rastello grew up in Steamboat Springs and has watched housing costs rise across Colorado’s resort communities. He argues that preserving existing affordable housing can be dramatically cheaper than building new housing from scratch.
“To build Eagle Villas new today — to buy the land and build it — would probably cost $700,000-800,000 per unit,” he said. “We were able to do it for about $500,000 per unit and about $325,000 was just the cost to acquire the existing buildings.
“It’s really, really important that these communities learn how to preserve existing stock.”
Preservation, he said, just requires political will, good policy and dedicated resources.
Franks said the Eagle Villas project also showed the importance of flexibility among government agencies and private developers. Funding programs were not designed neatly for a project like Eagle Villas — an existing affordable property whose restrictions were expiring while the property was being marketed as a free-market investment.
“To preserve Eagle Villas, all parties — UDG, ECHDA and the State/DOLA — had to be open in negotiating outside their ‘normal’ guidelines,” she said.
Eagle County officials say many of their newer deed restrictions are designed to last permanently. But properties developed under older affordable-housing programs can still reach the point where communities must decide whether to invest new money to keep them affordable.
“Funding set aside for preservation of units with expiring or threatened affordable restrictions would be very helpful,” Franks said.
For all the complexity involved in preserving an affordable housing complex — the tax credits, public loans, private investment and years of regulatory agreements — the result is simple for Kennedy: her family doesn’t have to move.