Affordable Housing Opens near Transit in Denver, Colorado

Affordable Housing Opens near Transit in Denver, Colorado

As of 2012, the city of Denver had a shortage of more than 27,000 affordable rental units. As part of his pledge to reduce its affordable housing gap, Denver Mayor Michael Hancock unveiled the 3x5 Initiative in July 2013, a plan to construct and preserve 3,000 affordable housing units over 5 years. With 1,714 units completed and about 1,200 under construction at the end of 2016, the city is on target to meet this goal. Contributing toward this goal are the 156 affordable units in Park Hill Station Apartments, part of the mixed-use Park Hill Village West development located near the second stop of the University of Colorado A Line commuter rail. The development is located in the “Corridor of Opportunity,” a city initiative to promote development that takes advantage of regional connectivity along the new rail corridor extending 23 miles from Denver Union Station to the Denver International Airport.

Preserving Land for Affordable Housing in a Strategic Location

A Denver-based nonprofit organization, Urban Land Conservancy (ULC), purchased the Park Hill Village West site in northeast Denver in 2013 to capture the value of a station on the planned A Line. ULC invests in properties to preserve and build affordable housing, schools, and community centers, especially in low-income and marginalized communities. Christi Smith, operations and communications director of ULC, indicated that ULC purchases land in strategic locations before it becomes too expensive. As of 2016, ULC has land banked 8 sites near transit stations to construct more than 800 multifamily rental units, which will provide housing for more than 1,100 residents.

With a vision of creating a transit-oriented community, ULC acquired 9.4 acres for affordable housing and other uses near the future 40th-Colorado rail station, which was under construction at the time of the purchase. ULC’s acquisition of the Park Hill Village West site is the organization’s largest land purchase as well as the largest land acquisition using Denver’s Transit-Oriented Development (TOD) Fund — the first financing mechanism in the United States for developing affordable housing near public transportation. Enterprise Community Partners, the city and county of Denver, and several other partners established the $15 million TOD Fund in 2010. Along with $3.7 million from the TOD fund, ULC purchased the Park Hill Village West site using program-related investments through the Piton Foundation, Gary Community Investments, and ULC equity. Including acquisition costs, Park Hill Village West total development costs will exceed $200 million, according to Smith.

Responding to Northeast Denver’s Vision and Needs

ULC deemed it important that the development incorporate the community’s vision for the area. To determine residents’ preferences, Radian, a nonprofit design group that creates healthy communities through community collaboration, led a series of community engagement activities. Three design concepts emerged from the conversations, and one design, “The Destination,” received the most votes from the community. ULC then sold 2.7 acres to Delwest Capital, a private real estate development company based in Denver, to construct Park Hill Station Apartments.

As the first project in Park Hill Village West, Park Hill Station Apartments opened on April 21, 2016, for residents earning at or below 60 percent of the area median income ($47,940 or less for a family of four). The apartments in the four-story building have one, two, and three bedrooms. Each unit has large windows, glass-top ranges, and a washer and dryer. Park Hill Station Apartments features energy-efficient lighting, appliances, and heating, ventilation and air conditioning units. Common areas include a lounge equipped with a fireplace and televisions as well as a club house and kitchen for residents to host gatherings. Other amenities include a resident parking garage and an exercise room.

Delwest partnered with the Denver Housing Authority to provide 33 HUD Section 8 project-based vouchers. In addition, Delwest is committed to accepting tenant-based vouchers and currently has 35 from several sources: the HUD Section 8 Housing Choice Voucher program, the HUD-Veterans Affairs Supportive Housing program, the Mental Health Center of Denver, and the Family Unification Program locally administered by Mile High United Way.

Connecting Residents to Community Amenities

With regional connectivity provided by the commuter rail, ULC sought to improve neighborhood residents’ access to the 40th-Colorado station and other community assets. ULC led conversations with local businesses, community leaders, residents, and other stakeholders to discuss concept ideas for 303 ArtWay, a proposed nine-mile pedestrian and cultural trail that will be subject to Denver voters’ approval in a November 2017 ballot initiative. 303 ArtWay will connect Park Hill Station Apartments and other neighborhoods to the station and several nearby schools and attractions such as the Denver Zoo, Denver Museum of Nature & Science, Park Hill Golf Club, City Park, and two retail areas. As Smith indicated, 303 ArtWay will not only make the area surrounding Park Hill Station Apartments more walkable and bikeable, but it will also connect people to the area’s rich heritage and culture. Another goal of 303 ArtWay is to promote the work of local artists through displays and demonstrations along the trail.

Financing Park Hill Station Apartments

To finance the $35 million development costs for Park Hill Station Apartments, Delwest received 4 percent low-income housing tax credits, issued by the Colorado Housing and Finance Authority and purchased by Wells Fargo, to use alongside tax-exempt bonds purchased by Citibank. Additional financial support came from HUD Section 221 (d)(4) mortgage insurance, HUD’s Neighborhood Stabilization Program, a Colorado Investment Housing Fund loan, and funds from the Denver Office of Economic Development.

Plans for Future Development

In December 2016, ULC signed a development agreement with Integral Group to develop the remaining 6.7 acres of Park Hill Village West with 350 mixed-income housing units and up to 80,000 square feet of commercial space. More than 40 percent of Park Hill Village West housing will be designated as affordable housing. Park Hill Station Apartments, which was included in that total, was Delwest’s first affordable housing project, and the developer is open to building more affordable housing projects in the future.

The developer remains dedicated to addressing the evolving needs of Park Hill Station Apartments tenants, which have included more children than originally expected, according to Joseph DelZotto, president of Delwest. The developer plans to address this by incorporating a “homework zone” in the development’s clubhouse. In addition, a future pop-up clinic and day care will also provide onsite social services for tenants. These facilities and services will enhance Park Hill Station Apartments’ contribution to Mayor Hancock’s 3x5 Initiative and Denver’s long-range housing goals.