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Longmont outlines Prop 3 funds and projects, cites financing gap for 185-unit development
Summary
City staff said $1.7 million in Prop 3 funds bought land for a housing project that will include 185 units, 55 of them permanently affordable, but said about $6 million in local affordable-housing funds may be needed over three years to fill gaps; staff also discussed SB 1175's right-of-first-refusal and tax-credit issues.
City staff briefed the council on several state grants and housing projects, saying roughly $1.7 million from Proposition 3 was used to acquire land adjacent to Costco for a new housing development that will total about 185 units, including 55 units designated as permanently affordable.
Staff (Herold) said the city has the land and is proceeding through entitlement and financing steps, but faces a remaining funding shortfall. To complete the project without compromising other programs, staff said the city expects to allocate about $6 million from its affordable-housing fund over the next three years unless additional state grants can cover the gap.
Officials summarized additional pipeline projects ranging in size from about 50 to several hundred units, a recent grand opening for a 50-unit project, and an anticipated closing on an 88-unit family project at month-end. Staff noted that some projects are pursuing state "middle-income" tax-exemption programs that require local negotiation and can create timing or negotiation issues.
The council and staff discussed the recent bill referred to as 1175, which grants local governments a right of first refusal on qualifying multi-unit buildings so they can convert them to affordable housing. Herold said the law requires payment of market value and still requires the city to have financing capacity, which frequently limits when the city can act. Tax-credit incentives and other debt-structuring options were discussed as possible ways to improve feasibility.
Council members asked about partnerships with corporate supporters and lenders; staff described options such as revenue bonds, corporate guarantees that can add borrowing capacity, and the Federal Home Loan Bank down-payment-assistance tools aimed at retaining purchasers. No formal motion or vote was recorded in the transcript.
Staff said they would continue to seek state grants to avoid using all of the city’s affordable-housing reserves and return with more detailed financing plans.
