Monday is the grand opening for Basalt’s Roaring Fork Apartments. There are 56 of them, brand new, next to the bus stop on Highway 82 by Stubbies.
What’s more, they’re affordable. Some tenants are paying around $500 a month and the developer is still profiting, thanks to savviness, tax credits and maybe a little luck.
Lisa Chudy loves her new apartment, especially the patio. She can hear the water from the nearby Roaring Fork River, which she listens to at night.
Chudy has lived in the Roaring Fork Valley since the 1980s and has mostly worked at restaurants, like Little Annie’s, the Red Onion and the Golden Horn. Right now, she works at the Two Rivers Cafe in Basalt. If she hadn’t secured a spot in the Roaring Fork Apartments, Chudy might have left Colorado altogether.
“I was thinking about Prescott, Arizona,” Chudy said.
Scott Knickerbocker rents an apartment on the opposite side of the building from Chudy, across the main lobby and around the corner from the elevator. Before moving into his current studio apartment, he was also thinking about leaving the Roaring Fork Valley.
“I was planning on going back home to Minnesota,” he said.
Knickerbocker works construction and is tired of living with four or five other people.
“I’m old enough where I don’t need to have that dorm room, Animal House stuff. I’m done with that,” he said.
Knickerbocker pays around $500 each month in rent and is very happy with that price, even though it doesn’t include utilities.
More than 200 people applied to live in the Roaring Fork Apartments. They sent in tax returns and pay stubs to verify their credit and income. The developer, Real America Development, gave preference to people who already work in Basalt.
“We specialize in doing affordable housing for low and moderate-income people,” said Jeff Ryan, the company’s vice president of development.
The company is based in Indiana. Their CEO, Ronda Weybright, comes to the valley to ski and can’t help but notice how desperately people need housing.
In 2014, Real America bought vacant land next to Stubbies, where there was already a foundation, the remnants of a condo-hotel project that didn’t survive the recession.
Real America can charge cheap rents because of how they financed their project. They applied for rental housing tax credits. According to Real America’s Jeff Ryan, the IRS gives these out very sparingly.
“Every state gets them and they’re basically a commodity,” Ryan said.
Developers hoping to build affordable housing in Colorado want these tax credits, and they’re hard to get.
“Only a quarter or a third of the developers who applied for the tax credits actually get funded,” he said.
It took Real America two tries before getting $1.1 million in annual tax credits for 10 years. Once they had the credits, they sold them. The buyer essentially purchased a decade's worth of tax breaks.
Real America took that money and paid for a chunk of their project right out of the gate. This meant they didn’t have to take out a big loan in the form of a mortgage. With a smaller mortgage, they can charge cheaper rents and still make money.
If this project sounds like kind of a home run to you, you’re not alone.
“The fact that it took a site that was abandoned basically, and reused it and reused the foundation, it is incredible,” said Mike Kosdrosky, executive director of the Aspen Pitkin County Housing Authority (APCHA).
He thinks Real America was dealt a good hand. Afterall, the property they bought came with a foundation, but they played that hand well, Kosdrosky said.
“I wouldn’t say it’s all luck, I think they were smart,” he said.
For example, Real America asked APCHA to be a partner in the project. APCHA’s support, Kosdrosky thinks, is what helped Real America earn those coveted tax credits, and the model of a private developer financing affordable housing with tax credits is a good one.
“I think it can be used in specific cases to supplement the demand,” he said.
It’s no silver bullet, however; land is just too expensive here and the tax credits are so competitive.
Nonetheless, around 100 people have a new place to live in Basalt. A lot of them can now walk to work. At least two are staying in their community, despite strong forces working against them.