Land sale issue raised in affordable housing project for Colorado Springs seniors

An apartment complex on Colorado Springs’ northeast side would reduce the city’s significant affordable housing shortage for senior citizens.

The City Council approved selling nearly 11/2 acres at 4921 Templeton Gap Road for $1 to Greccio Housing, a local affordable housing nonprofit, on March 27.

One councilman complained that other agencies didn’t have a chance to buy the land. So Steve Posey, the city’s program administrator for Housing and Urban Development, said he’s changing the process.

Preliminary plans call for up to 55 affordable units for seniors, said Greccio Executive Director Lee Patke. But the preliminary plans still are subject to market analysis.

The city is expected to have a deficit of 26,000 affordable housing units next year, and the Greccio project marks a small but important push in the right direction.

Greccio has three years to secure funding and complete a development plan before the $1 sale is finalized, Patke said.

The next step is to submit an application to the Colorado Housing and Finance Authority by June 1. The authority will be the primary funding source if the application is accepted, he said.

But the land sale received some pushback from Councilman Don Knight, the sole council member who voted against it. Knight said the council can sell surplus property for less than market value, estimated here to be $570,000. But other organizations might have been interested in it, he said.

"Steve (Posey) said he wanted to declare (the lot) surplus and sell it for a dollar and sell it for senior housing, and he’s totally within his right to do it," Knight said. "What he did not do, though, was go out and do any type of market survey to find out if there was more than one person interested in the property."

Nor’Wood Development Group donated the plot to the city in 2012, and it has sat fallow since, Posey said. Selling land far below market value is one way the city can incentivize affordable housing projects, he said.

"Steve should have done something, anything," Knight said. "Instead he just went straight to Greccio Housing. He should have gone out and gotten sealed bids. In my mind, he did not follow the (city’s) real estate manual."

That manual is subject to interpretation, said City Auditor Denny Nester. The guidebook doesn’t "spell out" that such parcels must receive multiple bids.

Nester said his office hasn’t received any formal complaints about the pending sale, and he doesn’t plan to dive into it deeper.

"Could it have been done cleaner so that Don Knight’s concerns would have been addressed? I think it could have, but that’s sort of coming to the table late," Nester said.

The Colorado Springs Housing Authority could have been a partner on the project, Posey said, but he didn’t call them.

That lapse came as a surprise and disappointment, said Chad Wright, the Housing Authority’s executive director.

"We’re the largest provider of affordable housing in Colorado Springs and El Paso County . nothing negative toward Greccio, but we feel we’re pretty good at what we do," Wright said. "We did not feel that we were included in assessing the best way to go about that (project)."

Wright said a more transparent process for such projects would more easily find the best fit for the work.

Pikes Peak Habitat for Humanity was also interested, Posey said, but it was aiming for single-family homes or duplexes, and the plot is better suited for a small or medium-sized multi-family project, which is the bulk of Greccio’s portfolio.

Still, Posey said, his office is developing a process to ensure that all potential partners are contacted.

"We have hope the process will be different moving forward," Wright said, "and we’ll continue to do what we do."

The city will have to muster as many public-private partnerships as possible to address the affordable housing shortage, many have said.

Up to 1,000 such units are needed to help the homeless, and up to 2,500 are needed for elderly residents. Much of the rest of the deficit is of housing for working families, he said.

Posey said he expects up to 1,000 affordable housing units to be built in the city by next year.

Progress on the shortage is slow, exacerbated by rising prices in Colorado Springs. Median house prices hit a record high of $295,000 in January, and rents followed suit at $1,141 a month.

In addition to using infill, renovation, and mixed-use buildings that combine apartments and businesses, community cooperation is essential, Council President Pro Tem Jill Gaebler has said. Affordable housing will come to all of the city’s neighborhoods, she promised in February, and she asked residents to accommodate them.

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