In a move designed to support workforce housing needs in Chaffee County, Chaffee County commissioners unanimously approved a resolution assigning to the Colorado Housing and Finance Authority a private activity bond allocation valued at $1.2 million. The bond authority will be held by the CHFA, and plans currently call for it to be assigned to a local project in Poncha Springs.
Because Chaffee County’s population has reached 19,000 residents, the county qualifies under state statute to issue revenue bonds of up to $1.2 million beginning Sept. 15, explained Commissioner Keith Baker. The bonds are expressly for the purpose of financing qualified residential rental projects for low- and moderate-income residents.
The county or a multi-jurisdictional housing authority can now issue and administer these bonds. While Chaffee County now has a housing director, it has not yet created a housing authority that could administer the bonds. Another option is for the county to assign its bonding authority to CHFA, which can then designate it to local private projects or make it available in surrounding counties. This builds up a relationship that can provide funding for future county projects.
“We’re assigning it to CHFA this year, but in future years we can work with it ourselves. The key is to find projects, and the new Chaffee County Housing Director Becky Gray will be the point person on this,” said County Attorney Jenny Davis.
In approving the resolution, commissioners actually approved three separate components:
- A resolution approving bond authorization.
- A certificate.
- The assignment of the bond allocation.
The assignment of bonding authority to CHFA will turn into what are called Private Activity Bonds. Right now Commissioner Dave Potts said the intent is to keep the bonding authority within the county jurisdiction area but that it is not yet allocated to a specific project.
At the moment, commissioners indicated that this bonding authority may be assigned to a project within the town of Poncha Springs, perhaps for use on the new Poncha Springs Town Center. The project is in the preliminary plat stage, but if it proceeds, it would include commercial and mixed-use development as well as affordable, multi-family housing units.
According to CHFA rules, to qualify for the private equity bonds, the town will have two years in which to develop, finance and build multi-family residential housing within its jurisdiction. If a housing project is not identified within those two years, then CHFA can pull the funding for use in another statewide effort.
“We’ve used this type of agreement for a long time,” said Colorado Housing and Finance Authority Regional Representative Karen Harkin, reached by phone during the commissioner’s meeting. “How it works is that we might come to you and say, ‘Hey, we have a project that needs more than what we have available.’ So one year we’ll have you consider assigning your private activity fund in Summit or Teller (counties) if there isn’t a project in Chaffee County. And the next year you may have a larger project, so we pull funds from other counties toward Chaffee County. Now that we’ve created a first assignment with CHFA, we’re going to work in partnership.”
“Even though this (project) is in Chaffee County, (by doing it) this way, we assign it to you to create the relationship, so that we get to use these funds and others when we have more affordable housing projects,” said Commissioner Greg Felt.
“Say I know that there are people who live in Garfield (County), for instance, but they work in Chaffee County. I can go to your neighboring county and ask for funds to get assigned here so your housing project gets funded,” said Harkin. “If your project gets delayed … we keep back records of what goes where, and we always use the oldest funds first. … We might be taking some 2015 funding and blending it (with the current year funds) behind the scenes, so that none expire.”
“The way that investors get repaid is from the proceeds from the project,” explained Baker. “It’s not paid from operating funds or the budget of the county or the authority. The interest that investors get is then tax-exempt.”
The commissioners fielded passionate questions from the public at their Aug. 13 work session about why the county was considering placing an initiative for forest health, water quality and rural landscapes on the November election ballot but not one for housing.
“So here is a million dollars we just raised for housing in Chaffee County,” said Felt. “So it turns out that we are doing equal time for forest, water and open space and housing.”