A planned remodel for a Cortez affordable housing project will get a boost from the federal government in 2018.
Valley Sun Village, a senior citizen apartment complex on East Second Street, received $535,000 in low-income housing tax credit awards from the Colorado Housing and Finance Authority to fund a planned remodel next year. The awards, given twice annually to affordable housing developers in Colorado, are part of the nationwide Federal Low Income Housing Tax Credit program, created in 1986. The Cortez project was one of 12 in Colorado to receive the award during the second round of applications in 2017.
Each housing project that receives a tax credit award can sell the credits to investors, as an incentive for them to provide more cash for construction. CHFA’s community development director, Steve Johnson, said many affordable housing developers rely on these tax credit awards to keep their rents low while building new apartments or remodeling old ones. In order to qualify for an award, developers must commit to keeping rent below a certain maximum rate, among other requirements, for the next 30 years.
Both the state and federal government have a long list of requirements projects must meet before qualifying for the award, and Johnson said the application process is very competitive. CHFA public relations specialist Megan Herrera said 28 projects applied for funding in the second half of 2017, requesting $30 million in awards, but the state only has about $13 million to give away. This was the second time that Valley Sun Village applied for the award. It was turned down in 2016.
Johnson said most of the awards go to new construction, not remodels like the one planned at the 36-year-old Valley Sun Village. But he decided the project was worth funding after he visited it earlier this year.
“There was a clear need for it,” he said. “With the age of the property, it needed an update.”
He said the project’s relatively low funding request – about half the maximum award for a single property – also made it stand out this year. CHFA places a high priority on rural and senior housing, so Johnson said that also worked in Cortez’s favor.
Funding from the award will be used to upgrade Valley Sun Village’s exterior lighting and driveways, replace sections of roof and siding and improve the apartments’ safety and energy efficiency, according to CHFA’s website.
This will be the sixth Cortez housing project to receive the tax credit awards. The latest award went to Brubaker Place Apartments, on East Empire Street, in 2008.
This article was reposted on Jan. 2 to correct the amount of the tax credit award.