Housing Catalyst of Fort Collins is selling 44 of its permanently affordable rental units located all over the city to a company that plans to convert them to affordable homes for sale.
The $8.8 million sale is part of Housing Catalyst's efforts to remove some of its units from the U.S. Department of Housing and Urban Development's public housing program.
In preliminary plans filed with the city of Fort Collins planning department, Elevation Community Land Trust — the same company that is working with the city to build 54 permanently affordable homes on Kechter Road — is seeking permission to convert seven duplexes to for-sale units by splitting the lots into 14 properties.
Under the sale, which is expected to close in May, Elevation would create single-family attached units and sell them to potential homeowners earning up to 80% of the area median income, or AMI.
The 2021 AMI set by U.S. Housing and Urban Development is $76,800 for a two-person household and $95,900 for a family of four. Those making 80% of AMI would earn $61,400 for a two-person household or $76,700 for four.
Current tenants would be eligible to buy the units if they chose. Otherwise, they will receive housing vouchers and help with relocation and moving expenses, said Kristin Fritz, Housing Catalyst's chief real estate officer.
Housing Catalyst has already gotten approval from HUD to reposition the units, Fritz said.
Public housing is an "old school" HUD federal program where the deed of trust is owned by HUD and funding flows through the federal government, preventing agencies like Housing Catalyst from using other funds to rehabilitate the units, Fritz said.
"HUD is encouraging" housing authorities to dispose of public housing portfolios because of all the issues around it, she said. "It's not the best tool out there anymore."
"Elevation will be able to invest in the properties, fix them up and get them ready to sell for deed-restricted homeownership," Fritz said.
Representatives from Elevation Community Land Trust could not be reached for comment.
As part of the $8.8 million sale, Elevation would be required to keep the homes permanently affordable.
Housing Catalyst will set aside $1 million of the proceeds for resident services over the next 10 years; $3 million for another pipeline project; and $4 million toward a $16 million renovation and expansion of its 24-unit Village on Impala that includes renovating the existing 24 units, razing 13 homes on adjacent land, then redeveloping that site into 62 additional units.
"From Housing Catalyst's perspective, selling these units in a way that keeps them affordable to a group that does that while we're able to do what we do best — leverage resources into producing affordable rental units" — provides the best results for the community, Fritz said.
Elevation Community Land Trust launched in 2018 through a collaborative of philanthropic funders that includes Fort Collins-based Bohemian Foundation, Gary Community Investments, The Colorado Health Foundation, Gates Family Foundation, The Denver Foundation, Mile High United Way and Northern Trust.
'Our best days are not behind us': Fort Collins' State of the City strikes a hopeful note
Pat Ferrier is a senior reporter covering business, health care and growth issues in Northern Colorado. Contact her at email@example.com. Please support her work and that of other Coloradoan journalists by purchasing a subscription today.
This article originally appeared on Fort Collins Coloradoan: Fort Collins affordable rentals could become for-sale affordable homes