Council narrows Habitat 'Confluence' project to six homes, raises priority-unit price and income cap

Councilors on Jan. 2 amended the memorandum of understanding governing the Habitat Roaring Fork "Confluence" project at 8th and Midland, approving changes Habitat said were needed after design revisions and rising construction costs.

The city’s Community Development Director summarized the project as a two-building development that was redesignated from eight units down to six and noted that the 2023 MOU tied city fee waivers to a right to priority units. "We have an MOU that was signed between the city and Habitat, January 2023," staff said, and Habitat representatives told council increased costs and unit reduction had raised a financing gap.

Cheryl Bauer, chief operating officer of Habitat Roaring Fork, told the council: "The bottom line for us was we went from doing 18 units ... and the 8 units at Confluence down to 6 units," and said the smaller unit count and higher prices increased the subsidy gap the developer must cover. Staff and Habitat described an earlier priority-unit estimate of roughly $108,000 and more recent calculations that put the per-unit gap closer to $150,000.

Council first voted to update the project description to six units and later approved expanding the allowable area median income for buyers from 80% to 100% AMI. Supporters said the AMI change widens the pool of potential buyers and helps close Habitat’s funding gap; some councilors sought limits on how many priority slots Habitat could sell to employers. "If we use 2 priorities, then they could do 2 others," staff explained of the original MOU structure, and Habitat requested the flexibility to offer additional employer priorities to help close the gap.

On price, council voted 4–2 to set the city’s cost for a priority unit at $150,000 to reflect rising costs; the council then completed a separate motion that resulted in three total priority slots for the project (one city-committed slot plus two others Habitat may sell), a 5–1 vote. Council discussion focused on equity (whether large employers would dominate purchases), the city’s earlier donations (land and fee waivers), and where additional subsidy dollars should come from. Gail Schwartz and other Habitat staff said their fundraising goal had been $1.2 million but that to date the project had raised about $300,000 and would continue to pursue grants and donors.

Councilors stressed different priorities: some said the city should buy a single priority unit for its workforce and let Habitat raise the rest; others proposed buying two priorities and removing the MOU’s one-for-one matching restriction so Habitat could seek other buyers. City staff noted that the agreement language committed the city to fee waivers and to applying for grant funding, but the exact dollar gap changed after final designs and cost estimates.

The council’s votes update the MOU terms and leave three of the six units available to the general community under deed restrictions; the next steps are to place the amended language on the consent agenda for formal documentation and to continue Habitat’s fundraising and outreach efforts. The council also asked staff to return with final, written MOU language reflecting the changes.

The action taken does not finalize any sales; Habitat must still secure the remaining funds, complete financing and move to construction under the updated terms.