Consultant outlines capital stacking and public–private partnerships; county housing project faces rising costs

Michael Yurman, a consultant who has assisted Lake County on housing since 2022, gave a presentation to the Planning Commission on March 10 on capital stacking, public–private partnerships and the development process for affordable housing. Yurman emphasized that closing the “affordability gap” generally requires coordinated public contributions (land, infrastructure, fee waivers, gap grants) combined with tax-credit equity and private debt.

Yurman described three phases he said local governments should prioritize: predevelopment (site selection, surveys, environmental reviews, market feasibility), vertical construction (builder selection and construction oversight), and completion/operation (permanent financing and deed restrictions). He urged the commission to focus on predevelopment tasks because they create lender and funder confidence and reduce the size of the required subsidy.

Key points made in the presentation and subsequent discussion - Capital stack basics: Yurman explained that affordable projects often need layers of funding — owner equity, tax-credit equity (for LIHTC projects), soft debt, grants, and fee waivers — to bridge the difference between construction costs and rents buyers can afford (the “affordability gap”). He noted CHFA (Colorado Housing Finance Authority) administers tax-credit allocations in Colorado and that LIHTC rounds are highly competitive. - Local government tools: Land-banking or donating publicly owned parcels, funding horizontal infrastructure (roads, sewer, water), fee waivers, density bonuses and special limited-partnership arrangements can all reduce a project’s subsidy needs. Yurman advised local governments not to undertake vertical construction themselves but to focus on enabling infrastructure and market certainty. - Timing and entitlement: Yurman stressed that the sketch-plan phase is the appropriate time to negotiate public contributions (density bonuses, fee waivers, deed restrictions), so expectations are clear early in the process. He cautioned that funders expect entitlements to be “buttoned up” before major state funding applications. - Housing at 10200 (county project) status and challenges: County staff and Yurman discussed a locally led project denoted in the meeting as “housing at 10200.” Participants said the first builder was dropped because construction financing and market fit were insufficient and that the county identified an alternate builder that does not require conventional construction financing and is repricing units. The project faces cost pressures from higher interest rates, modular-manufacturing tariffs and increased tap and sanitation fees. - Tap fees and utility costs: Staff said county water partners lowered a water tap fee from about $12,000 to $7,000 for the project, but a sanitation provider doubled its tap fee; one participant said a separate fee increase added roughly $350,000 to the project budget. Staff reported they sought additional state gap funding to reduce monthly mortgage burdens on buyers. - State funding and grant trade-offs: The commission discussed Proposition 123 (a statewide ballot measure the meeting identified as a funding source for affordable housing) and cautioned that accepting grant funds often comes with programmatic eligibility and AMI (area median income) limits that can require projects to follow the funder’s income limits rather than local guidelines. The meeting noted the county must balance grant requirements with its local affordability goals. Participants discussed that per-unit gap funding figures mentioned in the meeting were in the range of tens of thousands of dollars per unit; an exact per-unit amount for a particular program was not confirmed on the record. - Deed restrictions and long-term affordability: Yurman explained that many funders expect long-term deed restrictions (commonly 30 years) and that some local deed restrictions can be in perpetuity, as staff said was the case for the housing-at-10200 deed restriction.

Questions from commissioners and public participants focused on risk to the county when applying for land-banking grants, developer selection for county-owned land, how to structure special limited partnerships and the timing of feasibility studies. Yurman advised competitive developer selection (RFP) when the county acquires land and noted that a land-banking effort is typically a multi-year (3–5 year) process.

Staff and the consultant identified resources for further reading (CHAPA developer’s guide and DOLA affordable-housing guidance) and said they would distribute Yurman’s slide deck and related materials to the commission.

Speakers who presented or contributed: Michael Yurman (housing consultant), Jackie (county staff who worked on market feasibility and project management), Melissa (county planning staff) and commissioners. An online participant (Ryan Hill) asked about feasibility-study frequency; Yurman said market-demand and feasibility work routinely underpins funding applications and that housing needs assessments are produced periodically at the state level.

No formal policy decisions or funding appropriations were made at the March 10 meeting; the presentation was informational and intended to guide future commission deliberations and code/strategy work.