WFAE’s Finding Home series has focused on housing challenges and market changes in the Charlotte area. And, we’ve told you stories about some of the things being done to respond to the need of at least 24,000 affordable housing units in the city alone. But this isn’t just a Charlotte problem.
Cities across the country are grappling with this same shortfall and seeking solutions. We want to learn about some of the new things they’re trying. Today, we take a detour to Denver, Colorado. There the city is teaming up with a company to offer vacant apartments at below-market rates.
"We know many residents need an affordable option today, not a year from now. So I’m excited to announce that we will pilot a new partnership to open 400 existing vacant apartments to low and moderate income residents struggling to find an affordable place to live," Denver Mayor Michael Hancock announcing the program two years ago.
The 5-year pilot program is just now getting up and running with one company St. Joseph Hospital signed on.
“We have lots of other tools throughout the city that help build affordable units, but it can take sometimes years to go from a concept for constructing an affordable housing project to actually having that project open and available. So this concept of buying down affordability of existing market-rate apartment units was an intent to connect residents in need with existing available units,” says Laura Brudzynski, Director of Housing Policy for Denver, Colorado’s Office of Economic Development.
“Another goal of the program was to really pilot an approach that leverages city dollars with foundation and employer resources external to this city, recognizing that we can’t address our housing challenges alone as a city.”
One of the things that make the Denver program different from other rental subsidies, like section 8 vouchers, is that it serves a slightly higher-income level. The program will serve up to 80% of the area median income. It also allows the city to be “more nimble” in calculating rent, so that it can pay higher subsidies to place people in areas with good access to transportation, jobs, and schools.
This is how the subsidy works: There’s a vacant apartment a landlord wants to rent through the program. The city looks at what comparable apartments nearby are going for, averages those properties, and makes an offer. Individuals and families who qualify pay no more than 35% of their rent. If it’s a St. Joseph employee, the hospital and foundation dollars make up the difference. If not, the city does.
“We’re not purchasing units. We are helping to buy-down the affordability of market rental units to a price point that’s affordable for the participating household,” says Brudzynski.
The subsidy would last two years. During that time, participants would also get help managing their money, and start building up savings with a small portion of the rent they pay going into a savings account.
Landlords are interested in the program, says Brudzynski, because it allows them to “help mitigate for vacancies” by finding a tenant for a full two-year time period.
The program has had challenges getting off the ground. The city had hoped to pair the subsidies with section 8 vouchers, but that didn’t work out. So far the program is only serving three households. The city expects to eventually serve 125 – a big difference from the 400 the mayor had announced in 2017. After that, Brudzynski says the city will take stock of the program and decide whether to continue it, modify it, or simply learn from it and move on.