DENVER — The cost of buying a home is outpacing incomes in our area. It’s just one part of the housing crisis plaguing families in Colorado.
“In Denver, cost of housing increased more than two times the rate of incomes,” said Jaime Gomez, CEO of Habitat for Humanity Metro Denver.
He said it costs more than $400,000 to build a home in the state. For many families, that price is beyond their budget. It’s why Gomez said their goal is to add more affordable homes to the inventory.
"When you think about the inventory issue along with interest rates that have continued to remain at a pretty high level, that really limits the purchasing power for families trying to buy an affordable home,” he said.
Construction on Habitat Metro Denver’s new housing project officially kicks off on Tuesday. Eventually, the homes will go up for sale to moderate-income families. Each one will be priced at around $300,000, which is below the market rate,
The project will have eight new 3-4 bedroom townhomes, built on land leased by Augustana Lutheran Church which is near East Alameda Avenue and South Fairfax Street. Gomez said it's a crucial partnership with the faith community because obtaining land is often the most difficult part of their job.
Gomez said they serve families with incomes around 50-80% of the area median income (AMI). That translates to a family of two making around $60-90,000 a year.
He said the families applying to buy these homes will never be cost-burdened or pay more than 30% of their income on their mortgage. That’s crucial for families to be able to build equity for their futures.
"That means all of the rest of your income will be spent on things that also contribute to housing stability like daycare, healthcare, healthy foods, transportation, utilities, all of the things that make your home stable and comfortable, having a stable mortgage is where it starts,” said Gomez. “It can be transformational and change the trajectory of families.”
He said half of renters in Colorado are cost-burdened and a quarter of them are severely cost-burdened, meaning they spend more than half of their income on rent.
“It’s been proven that when families have the opportunity to have a safe and stable home all of the things like health outcomes and educational outcomes improve,” said Gomez.
The project will be completed sometime next year, and buyers can start applying in the fall. There are income restrictions for this project and another one that Habitat Metro Denver is building in Aurora.
The nonprofit said there’s always a need for volunteers, which helps keep costs down.
“That’s really what drives our ability to keep these homes affordable,” said Gomez. “The public can support this project and Habitat’s mission by volunteering with us either on an individual basis or as a group with your company, by donating funds, by shopping at one of our Habitat ReStores.”
He said the project is being paid for with government grants, donations, corporate sponsorships, and volunteers. U.S. Bank is providing a $500,000 fund grant to this project and the City of Denver Department of Housing and Stability (HOST) is also contributing funds.
Habitat Metro Denver said there is a 99-year land lease agreement with Augustana Lutheran Church, where the homes are being built. When that expires, the land lease agreement would be reviewed by the church and there is an option to renew the lease for another 99 years. That would keep the homes affordable even further into the future.
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