Last month we looked at the housing situation in Northern Colorado. Housing costs continue to rise. While wages have increased since the end of the Great Recession, they haven’t kept up with the increase in housing costs. Many people pay well more than the 30 percent of their wages, which the U.S. government regards as affordable. It’s not uncommon for Colorado residents to earmark upwards of 50 percent of their income to housing.
So how do residents afford to live in NoCO? Are there ways to make it a little less painful when writing that mortgage or rent check? There is no one-size-fits-all answer, but there are answers out there. Hopefully, they address these questions.
There Is Help
Municipalities aren’t blind to what’s happening. They understand the importance of affordable housing and are working to help people of all incomes find stable and sustainable housing. Sue Beck-Ferkiss, Social Policy and Housing Program Manager with the City of Fort Collins, is on the front lines of the city’s efforts, including the Land Bank program, an evergreen program designed as a long-term affordable housing tool.
The Land Bank owns four properties that can be developed to accommodate affordable communities. Recently, one at 1506 West Horsetooth Road was sold to Housing Catalyst (formerly the Fort Collins Housing Authority), and is being developed into 96 units, suitable for a variety of tenants. The other four properties are located at 3620 Kechter Road, 6916 South College Avenue, 5630 Tilden Street, and on the 1500 block of West Vine Drive. “It’s possible,” said Beck-Ferkiss, “that another parcel will be activated in 2018.”
Fort Collins’ Social Sustainability Department provides loans to income-eligible first-time homebuyers that help to cover some of the downpayment and closing costs through its Homebuyer Assistance Program (HBA). The home must be the buyer’s primary residence for a minimum of five years, located within the Fort Collins city limits, and the buyer cannot be on the title of any other property. Condos, townhouses, single family and modular homes are all eligible properties and cannot be valued at more than $313,000.
For residents in Loveland, Wellington, Berthoud, Estes Park, and unincorporated Loveland and unincorporated Fort Collins, there is the Larimer Home Ownership Program (LHOP). Similar to HBA, LHOP fills the downpayment and closing costs gap experienced by many first-time home buyers. Buyers must be income-eligible, making no more than 80 percent of the area median income per Housing and Urban Development criteria. For a family of one, that equates to an annual income of $43,050. A two-person family cannot earn more than $49,200. A Family of three – $55,360; a family of four – $61,440; and a family of five – $66,400.
Housing Catalyst uses both private and public funding sources to build their affordable housing communities. Kim Iwanski is Housing Catalyst’s Manager of Communications and Organizational Excellence. “Federal funding [for subsidized housing] has been doing down for decades, and to provide what our community needs, we really needed to do more than provide housing vouchers for people,” she explained. “We needed to find the best way to make changes in the community … not just making affordable housing, but making it beautiful, making the communities something they are proud to live in and something that other people in the community don’t even recognize as affordable housing.”
Housing Catalyst is the developer behind the 12 Villages Communities. The apartments, duplexes, and townhouses are situated throughout Fort Collins, snuggling up next to single-family neighborhoods. A passerby would never know the residents are low-income. The West Horsetooth structure is under construction currently.
Matt lives in the Village on Redwood in North Fort Collins, an easy walk to Greenbriar Park. He moved to Fort Collins from the east coast two years ago and the rentals in his price range were dismal. “For $500, I could live in a basement or rent a room in somebody’s house,” he said. “Even that was overpriced, because you didn’t have a space that was your own.” One bedroom apartments in older, dated complexes could cost as much as $1,100 per month.
One day at work, a customer overheard Matt discussing his frustrations with co-workers and told him about The Villages and that one was under construction and applications were being accepted. Matt drove by and liked what he saw. “It didn’t look like government housing at all,” he said. “It was nicer and better maintained than some of the privately-owned places I looked at in town.”
He put his name in a lottery and got a call saying he was one of the lucky ones. “Almost everyone I know would qualify, the income threshold is pretty high and rent is scaled to what you make,” said Matt. His one bedroom apartment has a full kitchen, lots of natural light, a washer and dryer, and wi-fi is included in the rent. The buildings are situated on the site so that passive solar capabilities are maximized. The facility includes a fitness center, dog park, and community garden.
“The only thing I had to address in my brain before I moved in was the stigma of living in government housing. But there is nothing shameful about where I live,” stated Matt. “Who dictated that living in affordable housing was something to be shameful about? There is absolutely nothing shameful about how I live.”
Habitat for Humanity has offices in Fort Collins, Loveland and Greeley. The global non-profit organization’s mission is to “build safe, decent, and affordable homes in partnership with hard-working families in need.” Working from a pay-it-forward model, Habitat relies on volunteers and qualifying partner families who put in hundreds of hours of sweat equity helping to build not only their home, but the homes of future partner families as well. This model helps to keep the building costs down, which is reflected in affordable mortgage payments and utilities costs that together don’t exceed the magic 30 percent.
Advice from a Realtor
Will Flowers, realtor with Windermere Real Estate and President-Elect of the Fort Collins Board of Realtors, works with NoCO home buyers at all levels—from first timers to those looking to move up. He stays away from using the term ‘affordable housing’ since so many people equate that to subsidized housing. Instead, he talks about “housing affordability.”
“This term relates to all aspects of housing in our community, starting with the usual suspects; land costs, impact fees assessed by municipalities, construction materials, labor, etc. But it can also include access to good paying jobs, transportation and financing for home purchases. Housing Affordability takes a much broader scope relating to housing for our community,” Will explained.
The current housing market is strong, but not balanced. There is a lack of inventory, creating pressure on buyers to make decisions quickly and to be aggressive with their offers. Realtors and lenders are needing to find ways to make their clients stand out from the crowd.
Readiness is perhaps the most important part of the buying process. There is not time to ‘sleep on it.’ Trigger pulling is the new normal and it’s common for offers to be made within hours of viewing a house.
“Find a professional realtor to guide you through the process, make a plan with your lender, and be ready,” said Will. “Mortgage pre-qual letters aren’t worth much right now, buyers need a full pre-approval to be taken seriously, and the difference is significant. With the demand and competition so high, buyers need to be focused and prepared, otherwise the process is going to be very frustrating and not very successful. Having an advocate who understands your individual situation and your needs is crucial.”
While buying a house or finding a rental that isn’t going to deplete your funds (or require a passel of roommates) remains challenging in NoCO, it’s not impossible. It takes a lot of footwork and even more patience, but it can be done.