Let's get creative and build some work force housing!
Joe and I have been landlords for three months now, and things are going fine. We would like to build some more apartments in town to help out with our work force housing situation, but we may want to sell them rather than own them long term. We think that if we have the right piece of land to work with, we can build quality housing quickly and at a price that allows the rentals to be affordable to our work force. We don't have the next piece of land under our control yet, but if there is interest from the community to partner with us, we will be ready to hit the ground running when land does become available.
There are efforts underway to acquire grants/tax incentives etc. to build affordable housing in Chaffee County, and that is great. We see this approach as a separate, purely private market approach to get the ball rolling faster than any government program can. When it comes to building work force housing, I think we should pursue all possible routes to get us where we need to go.
If we were to build and sell some apartments, we have three groups of potential buyers who could purchase them.
1) Non profit
We have started a conversation with a local non profit to see if they are interested in buying them. That would be awesome because the non profit would keep them at 60-80% AMI forever, meaning they would be available to our restaurant and retail workers, teachers, public safety workers, etc. Renters would be screened by the non profit to ensure that they make the right amount of money to qualify for these apartments.
2) Coalition of local business owners
One idea is that a group of business owners who are struggling to house their employees could band together, form a corporation, and purchase some apartments and own them collectively. This would help the businesses hire and retain key employees. It might work out that winter oriented businesses would house employees for 6 months, and summer oriented businesses would house their employees for the other 6 months. Depending on the rents charged, this investment could cash flow or be revenue neutral. (But if you can hire and grow your business, this investment is really a tool to grow your primary business.) The ownership company, comprised of member businesses, could decide how to allocate the apartments and what the rents are. This could go a million different ways.
3) Local investors who care about housing
The third option is to get a bunch of regular real estate investors to buy an apartment project. If the apartments were rented out at 60-80% AMI, this project cash flows IF THERE IS NO MORTGAGE. So if we get enough investors together, they have the great feeling of helping out with housing in our community plus a return on their investment (maybe 3 to 4%) and if they hire a good manager, they can be hands off. The owners could set the rent rate, and if they want the renters to qualify based on a maximum income range, there are at least two non profits in the area who could manage tenant selection.
If you have any comments, ideas, or suggestions about this idea, please get in touch at [email protected]. If I have a handful of people who are interested in getting together to discuss this in depth, I will set up a time and place to get together to do so. It would be great to see our community come together and make an investment in our workforce housing that could pay it forward for the next generation!