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Denver Gardens Overview
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Denver Gardens Apartments provides over 100 low income seniors living in southeast Denver with an affordable home. The property operates under a Project Based Section 8 HAP contract, meaning residents pay 30 percent of their income towards their monthly rent with the remainder subsidized by the U.S. Department of Housing and Urban Development (HUD). The HAP Contract ensures Denver Garden’s residents have access to safe, decent, and affordable housing despite their extremely limited incomes.
Denver Garden’s HAP Contract was scheduled to expire in 2011. If the owners let the contract expire, rents could be increased and the residents could lose their homes. Recognizing the risk to the residents, Community Housing Concepts, a Denver-based nonprofit organization with a long history of affordable housing development, purchased Denver Gardens. They developed a renovation plan totaling $3 million in interior and exterior property improvements, nearly $1 million of which incorporate sustainability features to lower Denver Garden’s energy costs and improve livability for the residents. The improvements include installation of photovoltaic panels, energy efficient appliances, windows and lighting, as well as complete renovation of the bathrooms and kitchens in each apartment unit.
To finance the $14 million purchase and renovation, Community Housing Concepts sought funding through the Governors Energy Office and Denver’s Road Home. They also applied for Low Income Housing Tax Credits (LIHTC), a federal program designed to support the creation and preservation of affordable housing by providing private-sector investors with federal income tax credits in exchange for contributing equity to qualifying affordable housing developments.
In 2009, Denver Gardens was awarded nearly $759,000 in LIHTC by CHFA (Colorado Housing and Finance Authority) who administers the tax credit program in Colorado. At the time of the tax credit award, Denver Gardens estimated tax credit investors would contribute $5,534,386 to support Denver Gardens. Unfortunately, the economic decline significantly impacted Denver Garden’s ability to sell the LIHTC at the price needed to make their deal a reality.
The inability of LIHTC to fund affordable housing projects as expected is a nationwide problem which began in early 2008 as the investor prices declined. The subsequent gaps in financing which occurred in LIHTC projects across the U.S. threatened the completion of much needed affordable housing. As a result, Congress created the Tax Credit Assistance Program (TCAP) as part of the American Recovery and Reinvestment Act. Congress funded the TCAP program with $2.25 billion nationwide and directed state LIHTC allocating agencies, such as CHFA, to use the funds to provide grants or loans to affordable housing developments so they could move forward.
CHFA awarded Denver Gardens $1.7 million in TCAP funds, which helped close the gap it was facing due to the Tax Credit market decline. With this award, Denver Gardens was able to close its $14 million transaction.
CHFA was the first state in the nation to close and fund a project through the TCAP program. U.S. HUD Secretary Shawn Donovan said, “Thanks to their quick and efficient implementation efforts, Colorado is one of the first states in the nation to put Recovery Act funds to work to jumpstart low income housing construction, which will help to jumpstart the state’s economy.” Secretary Donovan continued, “The TCAP program will significantly boost efforts to put people back to work across the state while providing quality, affordable housing options for low income families at a time when those options are critical.”
Today, Community Housing Concepts is the proud owner of Denver Gardens. They have renewed Denver Garden’s HAP contract for an additional 20 years, ensuring a stable and affordable home for residents. Renovations at the property are underway with completion anticipated in 2010. CHFA estimates that by providing Denver Gardens with the $1.7 million Recovery Act award, the total $14 million project will spur $29.8 million in economic impact and support 222 jobs.1
About Colorado Housing and Finance Authority
CHFA finances the places where people live and work. Created in 1973 by the Colorado State Legislature, CHFA strengthens communities by making loans to low- and moderate- income homebuyers, affordable multifamily rental housing developers, and small and medium sized businesses. CHFA also provides education and technical assistance about affordable housing and economic development. CHFA is a self-sustaining public enterprise funded by issuing bonds. CHFA issued bonds are not obligations of the state. For more information about CHFA please visit www.chfainfo.com. Contact our Denver office at 1.800.877.chfa (2432), or our Western Slope office at 1.800.877.8450. 1 Economic impact assessments made by CHFA using RIMSII regional multiplies. Methodology and definitions available at http://www.chfainfo.com/documents/methodology_econ_impact.pdf
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Denver Gardens Video
Additional Information
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