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Affordable housing orgs say Coloradans will need at least $291 million in rent and mortgage assistance this year

The COVID-19 pandemic is compounding the state's existing affordable housing crisis

Alliance Construction superintended Dan Farrar walks on the roof during construction at Sheridan Station Apartments Wednesday, May 13, 2020. Nonprofit affordable housing providers informed Colorado Department of Local Affairs the state needs to invest $291 million in rental assistance, mortgage assistance and other emergency programs to prevent coronavirus from exacerbating the affordable housing crisis. The 133 permanently affordable units are expected to be completed in early December. “It (COVID-19) makes everything a little more difficult, but in our world of construction, we have to stay resilient. We have to overcome challenges,” Farrar said.
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A coalition of Colorado affordable-housing organizations with an up-close view of the desperate situation some low-income families are facing has an emergency plan that it believes could help stave off a potential mass eviction and foreclosure crisis if state and local leaders can find the money for it.

It’s a plan that comes with a more than $291 million price tag and a ticking clock. Gov. Jared Polis’ moratorium on foreclosures and evictions expires May 31.

“With many households receiving insufficient income or federal assistance to cover current bills and pay for a large housing bill at the end of the month, thousands may be in danger of being evicted just as we as a state begin the recovery process,” reads the letter, sent by the 15-member Neighborhood Development Collaborative to Polis and other state officials earlier this month.

The group’s plan calls for more than $196.5 million to support nearly 82,000 renters it projects will not have sufficient money for their landlords when the moratorium lifts. More than $94.5 million would be dedicated to the  31,500 or so people or families the group believes won’t be able to pay their mortgages. That adds up to $291 million in direct housing assistance needs.

Beyond that, the group projects another $2.8 million will be needed to pay for additional housing counselors across the state and to support housing service providers like Habitat for Humanity Colorado. By granting mortgage forbearance to some of the families living in the 1,600 homes it oversees, that organization is expected to lose close to $1 million over the next two months, the letter says. Many other housing nonprofits are facing steep shortfalls.

Marvin Kelly, executive director of collaborative member Del Norte Neighborhood Development, said his organization is burning through reserves because of COVID-19-related expenses. Those include providing personal protective equipment to service providers, more frequent deep cleanings and bringing in on-site security at two buildings to check visitor IDs for potential contact tracing. Del Norte’s tenants include people with HIV and AIDS and people with disabilities that were formerly homeless, Kelly said.

Construction workers install drywall at Sheridan Station Apartments on Wednesday, May 13, 2020.

Del Norte has seen a huge uptick in demand for the temporary rental and utility assistance, or TRUA, funding it distributes on behalf of the city of Denver. After fielding 132 applications in February, Del Norte and its partners at the Northeast Denver Housing Center received 729 in April. And that’s just for half of the city. Brothers Redevelopment also distributes some funding, Kelly said.

“We think that it’s just started, to tell you the truth,” Kelly said of the demand.

Neighborhood Development Collaborative executive director Jonathan Cappelli, says the coalition’s estimates for how many households will need support are based on moving targets. The organization has data from nonprofit housing providers like Del Norte about tenants’ needs but the arithmetic includes trying to figure out how many low-wage workers are among the hundreds of thousands of Coloradans who have filed for unemployment over the last three months.

“All of these assumptions are based on trying to figure out whether or not people will be able to get enough other benefits or employment starting up quickly enough to help them,” he said.

The coalition’s estimates are also relatively conservative. The volunteer-run COVID-19 Eviction Defense Project released an analysis on April 13 that estimated roughly 460,000 Coloradans could face evictions related to the pandemic. At that time unemployment claims related to the pandemic were less than a quarter of the more than 450,000 that have been filed in the state to date.

Adding to the urgency, the pandemic-fueled housing crisis is playing out on top of the state’s existing housing crisis.

The Colorado Division of Housing already counts 280,000 low-income households in the state as severely cost-burdened. That means those people put at least 50% of their income to keeping a roof over their heads.

“It is pretty obvious that the greatest needs right now are in business protection to get people employed and back to work. Then keeping them in housing,” Cappelli said. “If you don’t do that then our existing housing crisis turns into something really, really bad.”

At left: Alliance Construction superintendent Dan Farrar walks through construction at Sheridan Station Apartments. At right: The complex is pictured on Wednesday, May 13, 2020. (Photos by Daniel Brenner/Special to the Denver Post)

The Neighborhood Development Collaborative was born out of the Great Recession. Many members of the group say federal aid came to slowly during that crisis. Taking lessons from that experience, the collaborative’s goal with its letter was to be proactive. It identified potential funding sources that, so far, have not been dedicated elsewhere.

That includes $6.3 million in community development block grants from the U.S. Department of Housing and Urban Development that the Colorado Division of Housing is considering how to allocate. It’s the first of what is expected to be at least two rounds of funding from HUD.

A draft plan for how that money will be spent is expected to be posted for public comment on either Monday or Tuesday, Alison George, the director of the Division of Housing, said last week.

The collaborative is hoping that a third of that money will be spent on the needs it highlighted. A response letter from the Division of Housing and the Colorado Department of Local Affairs sent May 7 indicated it could be even more than that with $3.8 million going to mortgage and rental assistance.

George, whose department is fielding funding requests from across the state, is also worried about families being hit with massive debt in a single wave when various eviction moratoria lift. The division last week released a model repayment agreement its is hoping landlords use as a guide to spread out the pain of past due rent and fees. Goerge is acutely aware of the urgency of the situation.

“Decisions are going to need to made earlier that we are going to have all of the information together,” she said.

The first wave of HUB block grants would only provide a sliver of the support the Neighborhood Development Collaborative believes is needed. The bigger pot of money highlighted in the letter is the state’s $1.6 billion in Coronavirus Relief Fund the federal government is sending to Colorado.

Cappelli and his partners are realistic. They know the state is facing a mountain of needs including backfilling state and local budgets that are suddenly millions or billions of dollars short. As highlighted in the letter, if the state could even send $160 million from that fund to local jurisdictions for housing support it could be packaged with other state and federal funding sources to address the chasm of need.

“The state of Colorado is looking to backfill its budget. How can you not be sympathetic to that?”  Kelly said. “I would say what we really need is more funds from the feds. Sooner rather than later.”

Alliance Construction superintended Dan Farrar walks ...
Alliance Construction superintendent Dan Farrar walks on the roof during construction at Sheridan Station Apartments in Denver on Wednesday, May 13, 2020.

Aaron Miripol, president and CEO of Neighborhood Development Collaborative member organization the Urban Land Conservancy, points out that the group’s estimates would not solve the state’s housing problems long-term. The combined $294 million in housing assistance and support for services providers would only meet needs projected through the end of the year. The letter also includes a series of policy proposals around housing including providing property tax relief and protecting existing sources of funding for housing in the state.

Urban Land Conservancy specializes in land banking. It works with developers to build income-restricted apartments on properties the organization owns and contracts with partners to operate them under the terms of long-term ground leases that mandate the affordable rents stay intact. Today 199 affordable apartments are under construction on two Urban Land Conservancy parcels, one at 38th and Walnut streets in Denver and another at 5330 W. 11th Ave. The organization hopes its development partners will be able to break ground later this year on a 150-unit affordable apartment complex in Denver’s Elyria-Swansea neighborhood.

If a silver lining does emerge from the pandemic, Miripol hopes it will be that nonprofit housing organizations like his will be able to buy up market-rate apartment properties and preserve than as affordable long-term. That would provide more opportunities for cost-burdened renters to move into affordable housing.

The state is 130,000 residences short of demand when it comes to affordable housing needed for the state’s lowest-income residents, according to information gathered by the coalition, and that was before COVID-19 started wreaking havoc of jobs and incomes.

“I think because there is such a dearth of actually affordable housing I think absolutely we need to be producing more units,” Mriripol said. “That’s critical.”

Updated May 17, 2020 at 11:46 a.m. Because of an error by a reporter, this story original misidentified the city in which the affordable apartment project under construction at 5330 W. 11th Ave. is located. It is in Denver. 

 

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