Segment 1

Hi, welcome to Affordable Housing 101. I'm Jenny Rodgers. I'm the Vice President and Market Leader for the Rocky Mountain, Tribal Nation, and Rural team at Enterprise Community Partners.

Segment 2

The Division of Housing partners with local communities to create housing opportunities for Coloradans who face the greatest challenges in accessing affordable, safe, and secure homes. DOH supports projects ranging from homelessness prevention to homeownership. The Local Officials Toolkit, a joint project between the Division of Housing, Enterprise Community Partners, and Community Builders is intended to help local communities identify possible housing opportunities and streamline their processes to achieve housing faster. The toolkit will explain affordable housing in the context of Colorado. Separated into three parts, the toolkit includes Affordable Housing 101 (this training), 201 fundamentals modules that can be found online, and a set of potential tools and solutions focused on policies, programs, partnerships, etc. that communities can use and are already using to address housing needs in Colorado. As a national nonprofit, Enterprise Communities brings together national know-how, partners, policy leadership, and investment to multiply the impact of local affordable housing development. We deliver the capital, develop the programs, and advocate for the policies needed to create and preserve well-designed homes that people can afford, and inclusive and connected communities. Community Builders is a leader in community planning, design, and development with core competencies in training and capacity building, direct technical assistance, public engagement and facilitation, strategic communications, and applied research. In applying these skills, Community Builders brings a range of expertise in community planning and development including housing, transportation, economic development, urban design, and downtown revitalization.

Segment 3

So, what's on our agenda for this training? First, we're going to review: what is affordable housing? Why is affordable housing needed? What are housing outcomes and state needs? What are the housing types that could address affordable housing needs? What are the factors that contribute to the challenge of building and creating affordable housing opportunities? How can local electeds support affordable housing and then, looking forward, what's next in our training series?

Segment 4

Let's get started. First, what is affordable housing?

Segment 5

Every housing unit is affordable to someone. Affordable housing is identified using income standards to assess how much of a household's income is spent on housing. Housing is generally considered affordable when it costs 30% or less of a household's pre-tax income. Housing affordability is therefore a matter of both how much the housing costs to live in, and the income of a current or prospective occupant. Under this definition, affordable housing does not refer to a single type of housing, affordability level, or public program. All housing units are affordable if your income is high enough. We shouldn't be asking, "Is this affordable housing or is this not affordable housing?," but instead, "Who is this housing affordable to? And how does that relate to my community's needs?" Thus, local officials must understand what income levels current and future housing will be affordable to and what types of housing can best serve as affordable options, giving the community's needs. Affordable housing does not refer only to a housing unit that receives a public subsidy, or that has income restrictions. While public subsidies are one way to make housing more affordable to those with lower incomes, this type of housing is more accurately referred to as subsidized housing or income-restricted housing. Although you may hear people use the term 'affordable housing' to refer to subsidized housing, it's important to be clear in the language you use to avoid miscommunications and keep dialogue productive.

Segment 6

Colorado, like most states, has many different regions that vary in income levels and housing markets. A $500,000 home may be affordable to a large share of people in one region, but totally unaffordable to most in another region. To account for differences in income levels across places and changes over time, instead of capturing income and dollar amounts--for example, $50,000 a year--housing programs and policies typically capture income as a percent of the area median income, or AMI. The area median income is the income of a typical (or median) household in a region; either a metropolitan statistical area or a non-metro area county. A program that targets households at or below 100% of AMI, which targets the bottom half of the income distribution in each region. Some calculations also use the area median income for a typical family instead of all households. The most common income thresholds used for affordable housing program targeting are 30, 50, 60, 80, 100, and 120% of AMI. Specific income thresholds will typically be set by the agency that administers the program. For example, the US Department of Housing and Urban Development (HUD) sets the limits for most federal housing programs. In addition to accounting for differences in AMI, housing programs also typically adjust income thresholds based on the size of the household or family. For example, a household earning $40,000 per year in a region where the AMI is $80,000 would have an income level of 50% of the AMI. If that same household lived in a region where the AMI is $50,000, they would have an income level of 80% of AMI. A household earning $40,000 per year in a region where the AMI is $40,000 would have an income level of 100% of AMI. Household size also determines AMI. If household size grows, costs related to housing, and a greater number of people also increase, income limits are adjusted to account for this. For example, in Montrose County, a housing program that targeted 50% of AMI or less would accept a two-person family as long as they earned up to $32,900. But a four-person family would be allowed to earn up to $41,000 and still qualify for the program. 

Segment 7

Affordable housing can refer to a wide range of housing models and development approaches. Affordable housing can be rental or for sale. It can be in single-family homes or in multifamily buildings. It can be subsidized or unsubsidized. Each model has its own characteristics, advantages, and disadvantages. For example, developing a new multifamily building can create more housing units with a lower development and land cost per unit compared to the same number of single-family homes. But they may also face additional community resistance in communities opposed to more dense development than what exists today. Multiple types of housing exist to address needs in your community, including affordable rental housing, redevelopment of existing buildings, rehabilitation of existing housing units, adaptive reuse, homeownership, mobile home homeownership, shared equity homeownership models, supportive housing, and more. Any and all of the options above can be models to create affordable housing opportunities. Thinking back to the way we've defined affordable housing in this training. The question is, what type of housing will be both feasible to develop and best create more and better affordable housing options for those in the community who currently lack good options? Or, potentially, who is at risk of losing them?  In addition to these characteristics, which relate to the building itself, there are also a number of programs and partnerships that can address the housing needs in a way that goes beyond buildings.

Segment 8

In our industry, we sometimes talk about the housing continuum. So, what is the housing continuum? To consider this question, the Colorado Housing and Finance Authority has developed a helpful summary graphic of the housing continuum in Colorado. This aligns income levels expressed as a percent of AMI with types of housing that are commonly affordable at that range. The general progression of affordability level illustrated will hold true in most communities. For example, rental homes tend to be affordable at lower incomes more affordable than for-sale homes and permanent supportive housing tends to serve those with the lowest incomes. However, the specific income levels are just rules of thumb and will vary across communities. For example, in some Colorado communities, it's possible for a first-time homebuyer earning 50% of the AMI to find a starter home that's affordable to purchase. In others, however, even a household earning 80% of the AMI may struggle to find an affordable home to purchase. Here's an example. If the AMI in your community is $45,000 a year on average, households can afford to pay between $1,125.03 and $1,000 a month on rent. It's important to provide rental options along the entire range in this price range so that households located in the housing continuum can afford rental levels and can be housed in your community. 

Segment 9

Why is housing affordability a key priority in Colorado?

Segment 10

Affordable housing development has many benefits for communities. In addition to providing safe shelter to residents, affordable housing positively affects economic development, community health, educational institutions, and neighborhood prosperity. When individuals and families lack affordable housing options in a community or region, this can result in financial strain, frequent moves, material hardship, long commute times, and a range of other factors. More affordable housing options create a better potential for residents to thrive. Healthy, vibrant communities including customer bases and workforces are a key factor in attracting industry to develop and prosper in your region. Having affordable housing options at a range of different income levels ensures diversity in your labor force and skills that are important to industry. Healthy communities require safe and stable housing. Living in substandard housing units, being forced to move frequently, or experiencing homelessness can all negatively impact health and well-being and create additional public and healthcare costs. Affordable housing leads to better health outcomes for all residents. Students who are living in unstable housing or who are unsheltered have lower performance at school. Stable, affordable housing of quality improves behavior and school performance for students. As communities and neighborhoods, market housing options affordable to different income levels will change to become more inclusive and diverse.

Segment 11

Throughout the stakeholder engagement process to inform the development of this toolkit, elected officials and staff came together to discuss their needs regarding affordable housing. Generally, we heard that housing in Colorado is increasingly unavailable and unaffordable. The pace of change in conversation and priorities is happening too fast and doesn't allow adequate time for issues to be addressed. We heard that workforce housing in Colorado is an important consideration due to seasonal demand and that there's a lack of available and affordable housing near resort mountains. Due to the fact that Colorado has different housing markets with varied needs and challenges, we've identified the main concerns by region.

Segment 12

In mid-sized and large city market types, we heard a variety of feedback... what I hear is "a lot of workforce housing, a lot of our businesses are struggling to get low- to moderate-income workers to live here." What our community talks about a lot is our aging adults, and that they're on fixed incomes and can't maintain their house or property taxes. Population growth is anticipated but, without growth and housing stock, cities are going to experience challenges.

Segment 13

In mountain resort market types, we heard things like "the land we have left is really technical, which drives up the price substantially. Older homes are priced higher than they're worth." In addition, the costs of repairing and maintaining them make the older housing stock unaffordable. Living costs are high (gas, groceries, etc.) leading to an even higher cost burden for households. Businesses are available and the available workforce is negatively affected by lack of housing options.

Segment 14

In rural, agricultural and inverted market types, we heard comments such as "property values are extremely low." So, we're dealing with an inverted market where the cost to build exceeds what the market can afford. Deep affordability is not the issue. There's no incentive to build. We heard a lack of affordable housing inventory is a problem, and there is an increase in the amount of homelessness in our communities. We heard consistently across rural markets that workforce housing is an issue that many communities are grappling with. 

Segment 15

Next, let's take a look at how housing impacts resident outcomes.

Segment 16

There are many housing-related factors that matter to residents. The research suggests they have an impact on other outcomes: economic success, health and wellbeing, education, and other outcomes. The Urban Institute reviewed the research on how housing impacts these outcomes and identified five key housing-related factors: housing stability, housing quality, housing, affordability, neighborhood context, and housing that builds wealth and assets. Housing and access to affordable housing options are integral factors when addressing resident satisfaction and community prosperity. Local elected officials play an important role in promoting the notion that housing is an integral foundation for achieving these ideal outcomes. Housing stability refers to a person's ability to stay in their home without unplanned or unwanted disruptions or moves, such as those caused by eviction or foreclosure. Stability allows people to invest in their social relationships, communities' health, and education. Unstable housing can impact health and mental health, school outcomes, and employment stability. Housing quality refers to the condition of the unit and its ability to protect and promote the physical and mental health of those who live there. Substandard housing has been linked to poor economic health and socio-emotional outcomes, as well as negative academic and behavior outcomes for children. Housing affordability refers to a household's ability to pay for adequate housing without a significant financial burden. Living in an affordable home can promote a household's ability to save and build wealth, and a high housing cost burden has been linked to psychological distress which can inhibit a household's power and autonomy. Neighborhood context considers that housing is more than a unit. The set of resources, opportunities, and characteristics of the neighborhood can all help either boost or inhibit neighborhood success. Characteristics like lower-income and racial segregation, access to transit, affordable housing, and higher-quality schools are all a part of the neighborhood context. Housing that builds assets and wealth relates to the way in which homeownership can provide pathways to upward mobility through home equity, credit, and asset building. But housing builds wealth only if households are able to buy a home, make mortgage payments, and benefit from their home's equity. Large gaps in homeownership and home equity persist between whites and communities of color, particularly Black, Latinx, and Native populations. While each of these is important, there are also trade-offs between them. For example, housing that is of higher quality and located in neighborhoods with better amenities and schools is likely to be less affordable. Similarly, a prospective homeowner may have to choose between purchasing a home, building assets and wealth in a neighborhood that is farther away from jobs, or choose to rent closer to where they work. These trade-offs reinforce the need for local officials to understand what their constituents value and where housing needs exist so that they can strike the right balance in housing solutions.

Segment 17

Homelessness in Colorado is a critical issue throughout the state and should be considered when analyzing housing stability in your community. Although the number of people who are homeless has decreased in recent years, Colorado has the 12th highest rate of homelessness among states as of 2020, according to the National Alliance to End Homelessness. The chart on this slide shows the change in the number of people who are unsheltered or in a homeless shelter counted on a single day in the year indicated, which can be a helpful way of showing a trend in homelessness over time. However, homelessness affects many more Coloradans each year than this chart would suggest, particularly when you consider not just the sheltered and unsheltered populations, but also those that are doubling up in one unit and people who alternate between temporary and informal arrangements, often referred to as couch surfers. Housing stability and the extent to which Colorado residents have access to long-term stable housing is a housing outcome of particular salience for elected officials.

Segment 18

Homeownership in Colorado is a strong indicator of housing that builds assets and wealth. Homeownership rates in Colorado have stayed relatively consistent over the last decade.

Segment 19

This cost burden chart shows the extent to which Colorado renters at different income groups are cost-burdened, spending more than 30% of their income on housing-related costs, and severely cost-burdened, those spending more than 50% of their income on housing-related costs. Housing that costs more than 30% of income is not considered affordable. It's clear that renter households with extremely low incomes and very low incomes are the most cost-burdened, and the most severely cost-burdened in Colorado.

Segment 20

As I've said, homeownership in Colorado is a strong indicator of housing that builds assets and wealth. The two maps on this slide and the next represent Colorado counties and the percent of the population that is cost-burdened. The vast majority of counties in Colorado have 30% or more of their population of renters that are cost-burdened. Comparatively, five counties have 30% or more of their homeownership population experiencing cost burden. In Colorado, cost burden is significantly higher for renters than owners.

Segment 21

Please take a look at this map that shows renter cost burden across counties in Colorado.

Segment 22

Again, renters in Colorado are more cost-burdened than homeowners. Additionally, it's important to recognize how race and ethnicity play into cost-burdened status. More than half of Black or African American renters, American Indian or Alaska Native renters, and Hispanic renters experience some cost burden in Colorado.

Segment 23

Next, let's consider the factors that contribute to our housing challenges in Colorado.

Segment 24

Well, this is a recorded training... please stop the video and take a moment to write down the top three challenges that you would consider are part of the problem to bringing more affordable housing to your community.

Segment 25

There are a number of issues that contribute to the challenge of creating housing that is affordable. The development process is complex and often time-consuming. In addition to a developer needing to organize the development team, there are important considerations such as funding sources, zoning laws and regulations, lengthy public processes, and unexpected expenses that can delay development. There are many factors that can be a barrier for development to occur, or increase the cost of doing so including the following: land and product availability; costs of land, materials, labor, professional services, and community benefits; public processes, the uncertainty and the length of time it can take to get through them and NIMBYism; competition for unlimited supply of financing for acquisition, construction and rehabilitation; regulatory barriers; access to water and utilities; and the capacity in your local community to develop affordable housing. These issues and what local officials can do to help to address them are discussed in more detail in subsequent trainings. Depending on their specific role, local governments and officials have the ability to influence each of these challenges.

Segment 26

Some of the challenges that local officials and every community can address are: the public process--How are projects bedded? How does the community have input on processes? Also, how does the community provide resources for affordable housing development? Your community and local officials can address regulatory barriers that may be causing undue hardship for building affordable housing. Your community can also deal with water and utility issues.

Segment 27

Some of the typical challenges faced by mid-sized and large city markets are combating NIMBYism and resident opposition to new affordable housing development, complex development processes that can slow down or be a barrier to entry for those who want to develop affordable housing, and providing access to gap financing to ensure that projects have the resources needed to be constructed.

Segment 28

Many mountain resort markets struggled with the availability and cost of land, construction development, and supply chain costs that drive up the cost of building affordable housing. High labor costs and high demand for that labor can also be barriers.

Segment 29

Some of the challenges faced by rural, agricultural, and inverted markets include facing infill development challenges or having to develop on brownfields, which can be costly to remediate. Access to water and utilities can be costly or challenging. The cost of development may exceed what the market can afford or what people will pay for a home. The cost of development may exceed appraisals of finished units in some communities. In many communities, there's limited or older housing stock. And there may be other challenges that your community partners are facing, such as capacity for things like grant writing.

Segment 30

So, let's dig a little bit deeper into how local officials can support affordable housing.

Segment 31

Local plans and policies have a significant impact, for better or for worse, on housing choices and affordability in your community. At the most fundamental level, communities need to ensure their plans and policies make it possible to build diverse housing choices in accessible locations. Communities can go further by creating policies that incentivize development of below-market housing, or further still by adopting policies that require a portion of affordable homes as part of significant development projects. Many of these strategies require minimal public investment and focus on leveraging existing public services and resources to support a healthy housing continuum. In Colorado, there are a number of examples in which policy has supported and encouraged the development of affordable housing. One example is from Boulder. Boulder's inclusive inclusionary housing ordinance requires 25% of units in a new development be reserved for affordable housing. The City of Boulder goes further in the specifications to ensure that, of the units dedicated to being affordable, 80% are for low- and moderate-income households, and 20% are for middle-income households.

Segment 32

Funding sources at the federal, state, and local levels exist to aid in affordable housing development. As elected officials, it's important to identify funding sources and other public resources and encourage fee reductions or waivers for innovative and community-specific affordable housing solutions, and communities struggling with housing and affordability. There's a gap between the financing costs of building housing and what typical households in that market can afford. Finding creative ways to fill that gap is an important part of a local housing strategy. Local elected officials can support affordable housing development by creating funds designed specifically for financing this kind of development. For example, Summit County elected officials passed approval for locally designated funding sources specifically for the construction of workforce housing.

Segment 33

There are a growing number of programs and initiatives communities are using to expand housing choice and affordability, even without the longer timeframes of new development. Additionally, to make meaningful progress, most communities need to support organizations offering programs such as rental assistance, housing counseling, and others, or develop the capacity to create and lead these programs internally, as well as to engage public-private partnerships, seek and leverage funding, and administer other elements of a local housing strategy. In Vail, through the Vail Local Housing Authority, they contribute part of the purchase price of a home in exchange for a permanent deed restriction. Unlike most other deed-restrictive programs, Vail indeed has no income or resale caps. Instead, the permanent restriction limits resales only to people who work in Vail or Eagle County. This keeps units from being turned into second homes--the fate of roughly 90% of all private sales in town--and ensures that they are available for local employees.

Segment 34

Local officials can be a key champion for affordable housing development. Local officials can build awareness for the current need for affordable housing in your community, and describe what affordable housing solutions could be used to address the unique context of your community. Local officials should include residents and constituents in conversations about solutions and how more options for affordable housing can benefit the community. Local officials should encourage community participation in any process to build affordable housing and learn about residents' housing needs. Engaging with the community will identify high-priority challenges in addition to providing an opportunity to address concerns about affordable housing development. Building partnerships and resident relationships allows for better communication about future developments and incorporates a community-specific lens that will help create affordable housing developments unique to the needs of your community.

Segment 35

Thank you for joining our training. Let's look ahead and see what's next.

Segment 36

The Local Elected Officials Housing Toolkit offers not only this affordable housing 101 training but also other training modules on the fundamental topics in housing and development. We also have a set of potential tools and solutions, policy programs, partnerships, etc. that communities can use and are already using to address housing needs in Colorado. In addition, we'll be providing customized and in-depth trainings throughout the state in the next few years as well as some virtual trainings. If you're interested in accessing expert technical assistance, please use the online request form and request assistance based on the needs in your community.

Segment 37

For further learning, access these additional resources at the Colorado Division of Housing webpage or contact our staff for more information. Thank you for the Division of Housing's portal.