For Alice Price, finding an affordable place to raise her six grandchildren was a daunting challenge, until September when she moved into The Reserves at Green Valley Ranch, a new 216-unit mixed-income apartment community near Denver International Airport.
“It is a gorgeous community. The rent is half of what I paid before and it gives me more flexibility to raise my grandchildren,” Price said. “I am going to be here for a while. God has given me a second chance.”
Her family has a ground-floor unit, meaning she no longer has to navigate several flights of stairs with a disability. Her grandchildren, ranging from age 8 to 20, are appreciative of the extra room and nicer surroundings. For half the price of what she was paying previously in Aurora, Price has a three-bedroom unit instead of a two-bedroom apartment, leaving more money to provide for her family.
Of the 216 units at the Reserves, 144 are designated affordable and 72 are at market rate. What makes The Reserves different than other affordable projects is that it accommodates a broader range of income levels, anywhere from 30% of area median income, or AMI, to 80% of AMI. Median refers to the point where half the households make more and half make less.
Historically, to access Low-Income Housing Tax Credits, the federal tax breaks that make it possible to build affordable projects, a developer had to ensure at least 20% of units were set aside and affordable to households making less than half of the AMI in a given area. Or they could ensure that 40% were rent-restricted and occupied by households making less than 60% of AMI.
Most affordable developments have targeted households making 60% of AMI, with very few trying to help the lowest income ranges like 30% or 20%.
But about four years ago a new approach was permitted called income averaging. Developers could make units available to those earning anywhere from 10% AMI to 80% AMI, so long as the rents charged were capped at 30% of that income level. Allowing more affordable units above 60% AMI could be used to essentially help subsidize more units at the lowest income ranges.
In Denver, a household of four would be at 30% AMI with an annual income of $35,160, while those at 80% AMI would have an income of $93,760.
Rents on a three-bedroom affordable apartment at The Reserves range from $1,123 a month at 30% AMI up to $2,342 at 80% AMI. On a two-bedroom, rent runs from $709 a month to $2,028 and on a one-bedroom from $593 to $1,693.
For comparison, the market rate units, which are similar in design and finishes to the affordable ones and coming onto the market this month, start at $1,730 a month for a one-bedroom and go up from there. Residents, regardless of whatever rent they are paying, have access to a nicely appointed clubhouse, which includes a community theater and a weight room and a business center that is planned.
Another thing that sets The Reserves apart from most other multi-family projects built in metro Denver over the past decade is the higher concentration of three-bedroom units, around 29% of the total. New three-bedroom units, which are friendlier to families with children, are relatively rare in a market that has focused on building smaller units for young professionals and empty-nesters.
“It really is a big deal and a complex thing to achieve,” said Jennifer Balkcom, director of housing opportunities at Denver’s Department of Housing Stability, addressing both the ability to provide apartments at the 30% AMI and having so many three-bedroom units in the mix.
The Reserves at Green Valley Ranch had more than 500 applicants for the 144 affordable units and filled them quickly, said Patricia Hudson, CEO of Mission Rock Rock Residential, a Denver-based property manager overseeing the property.
And it did so with very little marketing. Word of mouth spread quickly, and several relatives took units so they could be close to each other, which should help foster a stronger sense of community.
“It serves a need that is desperately needed,” she said.
Affordable luxury
Overland Property Group, located on the Kansas side of the Kansas City metro area, is the developer and driving force behind the project. Over the years, Overland has completed historic renovations and built senior communities, but its primary focus is on a niche it calls “luxury” affordable, or providing affordable apartment communities with more upscale design features and amenities.
“We challenge the long-held misconception that quality housing and affordability can’t go hand in hand,” the company says on its website.
In 2013, the company entered Colorado by transforming a historic Leadville hotel into a 37-unit apartment building called the Tabor Grande Hotel Apartments. Overland then went on to build two affordable projects in Steamboat Springs — Alpenglow Village, which has 72 units, and The Reserves at Steamboat Springs, which has 48 units.
Overland was initially trying to solve the problem of affordable worker housing which has plagued mountain resort communities, said Matt Gillam, a managing partner. But increasingly, it has turned its attention to the worsening affordable housing crisis along the Front Range and has established a satellite office in Denver.
Gillam and his business partner Pat Beatty found the right opportunity when Mark McPherson, president of Equity Venture Partners, a commercial developer based in Denver, approached them about a master-planned community he was heading up in Green Valley Ranch. It was next to a light rail station, with a school nearby, and easy access to retail.
Located near 48th Avenue and Salida St., The Reserves isn’t too far from the airport. It was an ideal location for affordable units and Equity Venture Partners wanted to include those as part of its community, even if it meant letting go of land at a discounted price.
It almost didn’t happen
Besides the lower land costs, Gillam said several things came together, and several hurdles had to be overcome, to help make the $60 million project a reality.
Overland got a lucky break when its contractor, Arco National Construction, recommended locking in lumber prices early in the pandemic. If they hadn’t done that, the huge spike in costs, about $3.5 million, likely would have derailed everything given the thin margins that affordable projects typically have.
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Denver housing officials provided strong support and so did the state through the Colorado Housing and Finance Authority. And financial backers and lenders had to be willing to take a chance on the new and still untested income-averaging approach for tax credits.
“Income averaging has challenges. Investors were skittish. Wells Fargo, our lender, had to take a risk. A lot of people took on risk to make this happen,” Gillam said.
Balkom said that the hardest challenge with affordable housing is getting land at a price that allows things to pencil out financially. If that hurdle can be cleared, then the other pieces can fall into place more easily.
“People have to want to do affordable housing. They have to be willing to leave some money on the table,” Balkom said.
Gillam said a wealthy resident of Steamboat Springs donated 500 acres to the city to help build affordable housing for the service workers who make the city and nearby ski resort run.
Likewise, metro Denver needs to find ways to provide more affordable housing options so that teachers and firefighters and paramedics, as well as baristas, janitors, and cashiers, can put a roof over their heads.
Price was so appreciative that she asked to speak at the ceremony celebrating the opening of The Reserves at Green Valley Ranch. She didn’t hold back on expressing her gratitude.
“I want to thank each and every one of you for taking a chance. You stepped in and did that. You blessed us and you did that,” an emotional Price said.
