Affordable Homeownership in Denver: The City Council’s $6 Million Grant Deliberation
In Denver, skyrocketing real estate prices have turned homeownership into an elusive dream for many residents. However, an upcoming proposal that the Denver City Council is set to discuss could usher in a ray of hope. The proposal entails a grant of $6.22 million, aimed at facilitating the acquisition of at least 62 homes over the next three years, ensuring their availability as affordable housing options.
According to the latest 2022 Housing Affordability National Survey by the Cato Institute, housing affordability is a nationwide concern. A staggering 55% of existing homeowners revealed that at current property prices, they would be unable to afford their own homes, and a worrying 69% fear that their children or grandchildren may never be able to own a home.
One such resident is Carmen Mayta, who had resigned herself to the belief that homeownership was a bridge too far. “I was feeling that hopeless. No, I won’t qualify for anything. I don’t have 10% or 20% to put down for a property. I don’t have savings,” she expressed.
Her perspective changed when she discovered Elevation Community Land Trust (ECLT), a local non-profit organization that champions the cause of perpetually affordable homeownership in Colorado using a community land trust model.
“We don’t profit from our deals, as we are a non-profit. What truly motivates us is facilitating the creation of inter-generational wealth, a chance that many have recently been deprived of,” said Tiana Patterson, ECLT’s VP of Social Impact and Wealth Equity.
ECLT buys properties or constructs homes, refurbishes them if necessary, and then sells them to lower-income families at affordable prices. While the homeowner gains ownership of the house, the land remains under the trust.
For instance, an ECLT property in Aurora was recently sold for $299,000. Comparable houses currently on sale in the same locality are priced anywhere between $325,000 and $430,000.
Patterson elaborated on the model, “The trade-off involves shared appreciation. While homeowners don’t realize the full appreciation of the home, they pass on a portion to the next owner, preserving the home’s affordability.”
The model stipulates that if a homeowner decides to sell, the sale price must equal the purchase price plus only a quarter of the property’s appreciated value over time. This ensures the continued affordability of the property for future owners.
While Patterson acknowledges that this model may not suit everyone, she insists it’s a solid option for individuals keen to move beyond renting and invest in their first home.
In addition to grant funding and subsidies from partners and local governments, ECLT also injects private capital into these projects.
The proposed $6 million grant for ECLT would primarily come from the American Rescue Plan Act and state and local fiscal recovery funds, with an additional $700,000 from Impact Investment Funds.
