SB22-232 MIDDLE INCOME HOUSING AUTHORITY
Colorado Office of Economic Development and International Trade
Quarter Ending March 31, 2024
This status report is published by the Office of Economic Development and International Trade (OEDIT) and approved by the Middle Income Housing Authority (MIHA) Board (the “Authority”) as part of the quarterly progress reports to members of the General Assembly. The Middle Income Housing Authority was established through Senate Bill 22-232 and amended by Senate Bill 23-035.
Per Statute, the Authority shall submit a report to the Governor, to the State Auditor, and to the Senate Committees on Finance and Health and Human Services and The House of Representatives Committees on Finance, Health and Insurance, and Public and Behavioral Health and Human Services on a quarterly basis.
For questions or requests related to this report, please contact:
Xander Martin
Director of Legislative Affairs
Office of Economic Development and International Trade (OEDIT)
xander.martin@state.co.us
Hilary Cooper
Director of Innovative Funding for Housing
Office of Economic Development and International Trade (OEDIT)
Executive Summary
Enacted by Senate Bill 22-232, the Middle-Income Housing Authority will acquire, construct, rehabilitate, own, operate, and finance affordable rental housing projects for middle-incoming workforce housing. This mechanism was created in order to address the acute shortage of affordable middle-income housing, and is intended to increase the supply of housing by raising large amounts of private sector capital to finance projects that can be placed into service quickly and efficiently.
In September 2022, the Governor appointed the initial 12 members to the board and the Executive Director of OEDIT and the Director of the Division of Housing (DOH) each appointed one member. CO Senate Bill 23-035 amended the enacting legislation to expand the Authority’s Board from 14 to 16 by adding 2 non-voting members, each appointed by the legislature. The Board held its first meeting on October 21, 2022 and meets monthly. More information on Board members and meetings can be found at: https://oedit.colorado.gov/middle-income-housing-authority.
The Authority will ensure that rental units in affordable rental housing projects will provide middle-income housing with stable rents. Middle-income is defined as 80 - 120% Area Median Income (AMI) or up to 140% AMI for jurisdictions in counties classified as Rural Resort. Projects may also include units lower than 80% AMI if required by local rules and regulations.
The primary funding/support options include but are not limited to issuing bonds, tax exemptions for affordable housing developments, entering into public-private partnerships, and providing financial assistance to tenants in order to develop housing projects and enable a transition to home ownership.
Successful projects will be issued bonds funded with private sector capital. The projects will serve a diverse swath of developer entities, geography, and workforce income levels. The Authority is directed to select up to 3,500 units and report back to the General Assembly with a comprehensive evaluation report on the Authority’s impact on middle-income individuals and families and on housing of all types in the State. The report will include recommendations on the future of the program.
Key Statutory Dates
● Sept 1, 2022 - Initial Board Appointments
● Sept 1, 2022 - Initial Chairperson Appointed (OEDIT Executive Director Patrick Meyers)
● Oct, 21, 2022 - Initial Board Meeting Held
● April 1, 2023 - Solicitation of pilot project proposals launched
● July 1, 2023 - Complete review and conditional selection of pilot projects
● July 1 - Oct 1 - Local Government Notification Process
- Quarterly Reports:
- Fiscal Year (“FY”)23 Quarter (“Q”)2 December ‘22 (submitted)
- FY23 Q3 March ‘23 (submitted)
- FY 23 Q4 June ‘23 (submitted)
- FY24 Q1 September ‘23 (submitted)
- FY24 Q2 December ‘23 (submitted)
- FY24 Q3 March ‘24 (presented)
- FY23 Annual Report - December 31, 2023 (submitted)
- FY23 Annual Audit - Submitted to the Office of the State Auditor on February 26, 2024
- Pilot Program Report - Due upon selection/construction of 3,500 units
Program Updates for FY24 Q3 (January 2024 - March 2024)
The Authority launched the initial project solicitation process in April 2023 and conditionally selected the six projects on June 30, 2023 in compliance with the July 1, 2023 deadline established by SB22-232. (See Project Updates below) Project teams are working on securing additional gap funding for projects or rethinking projects to reduce development costs.
After the initial project selection, the Board has been evaluating the current middle income market development conditions, project selection standards, policies and procedures for the underwriting process, and developing communication and marketing plans. The 80% - 120% AMI middle income affordable housing rental product is relatively new to Colorado. While a limited number of developers and investors are actively engaged, more education is needed for developers, investors and local jurisdictions. Current investor interest and funding resources for middle income projects is limited, but early discussions with private investors about MIHA are generating growing interest. Despite this growing interest, developers and investors are expected to remain cautious due to the factors discussed above as well as a significant new supply of housing units in the front range becoming available during the near to medium term. Developers may wait to see how market conditions evolve over the next few months to year before becoming more active. Flexibility and innovation are needed in this market to pull deals together.
The Authority hosted two webinars in March 2024 for nonprofit and for-profit developers, local governments and stakeholders before reopening the application process. Applications were reopened March 8, 2024. Sierra Management Group, MIHA’s Financial Advisor will review new applications in coordination with MIHA. The six projects listed above will be prioritized in the review process when they submit updated financials. No applications have been submitted to date.
Organizational Updates
Board Updates: On January 30, 2024, Chad Asarch resigned from his position on the Board. The Authority posted notice of the vacant seat on the coloradomiha.com website and will accept applications for the position through May 15, 2024. Mr. Asarch was appointed to serve as a representative with experience in real estate transactions. His term expires September 1, 2026; his replacement may serve for the remainder of this original term. County Commissioner Kristin Stephens’ appointment to fill the local government at large was confirmed by the Senate on March 19, 2024.
Financial Updates
As of March 31, 2024 MIHA has $339,389 in the Treasury account, which is a balance from the initial $1 million funded in SB22-232. In addition, MIHA has $54,378.50 in its checking account. MIHA revenue will come from project fees and revenues.
Table of 3rd Quarter Fiscal Year 2024 Budget and Expenditures
Actuals as of March 31, 2024 | FY24 Budget | |
Current Balance | $393,767.50 | |
Revenue | ||
Interest | ($10,055.00) | ($8,000.00) |
Project Fees | ||
Project Revenue | ||
Total Revenue | ($10,055.00) | ($8,000.00) |
Operating Expenses | ||
Bank Fees | $116.00 | $250.00 |
Accounting | $18,900.00 | $18,000.00 |
Consultants | $104,890.00 | $280,000.00 |
Webpage & Applications | $355.43 | $2,000.00 |
Insurance | $18,708.25 | $23,000.00 |
Misc. Expense | $325.16 | $1,000.00 |
OEDIT Admin | $84,859.65 | $130,000.00 |
Legal Fees | 54,674.97 | $50,000.00 |
Professional Fees | $0.00 | $15,000.00 |
Supplies | $0.00 | $200.00 |
Total Expenses | $282,829.46 | $519,450.00 |
Audit
The audit was due to the Office of the State Auditor December 31, 2023. MIHA requested an extension on December 7, 2023 to allow more time for MIHA’s first audit. The extension was approved on December 12, 2023 and established a new deadline of February 29, 2024. The audit was approved by the board on February 16, 2024 and submitted to the Office of the State Auditor on February 26, 2024.
Project Updates
The six conditionally approved projects continue to finalize their development and financing plans. Discussions continue with potential project teams and the Financial Advisor and OEDIT staff.
Table of MIHA Conditionally Selected Projects
Name of Project | Location | Developer |
Denver Health Main Campus | Denver | Community Property Trust Advisors |
Granby Community Housing | Granby | The NHP Foundation & Town of Granby |
Hidden Lake | Adams County | JV Development Company & Westfield Development |
Hub on Main | Town of Longmont | Brikwell |
101 West Main | Town of Frisco | The NHP Foundation |
10th and Osage | Denver | Prime West Development, LLC |
Quarter 3, FY 2024 Meetings:
- January 5, 2024 (Project Selection Policies and Procedures subcommittee meeting)
- January 19, 2024 (Board Meeting)
- February 16, 2024 (Board Meeting)
- March 8, 2024 (Webinar for developers and stakeholders)
- March 14, 2024 ( Webinar for local governments)
- March 28, 2024 (Subcommittee meeting)
For more information on the Middle-Income Housing Authority, including upcoming Board meetings and agendas, visit oedit.colorado.gov/middle-income-housing-authority and coloradomiha.com.