Affordable housing requirements set to expire across the country in coming years
Editor’s note: This story has been updated include additional information about Tralee Capital’s proposed project.
KEYSTONE — With a new decade underway, efforts to maintain affordable housing in Summit County are facing a unique obstacle: the expiration of Low Income Housing Tax Credits.
Affordable housing developments that were built in the 1990s are coming up on the 30-year expiration of their Low Income Housing Tax Credits, meaning the owners of those developments will no longer be required to offer housing at reduced rates.
This decade will see thousands of complexes across America with expiring credits, as the program was created in 1986. In Summit County, officials are already aware of at least one apartment with credits that are set to expire.
The Blue River Apartments complex, on Adams Avenue in Silverthorne, offers 78 units with affordable rent for people who make less than 50% to 60% of the area median income, or less than $47,950 to $57,540 for a family of four. The rent is then capped at 30% of the household income.
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When the complex was first built in 1994, the developers signed on to the tax credit program, which gives private developers a federal income tax credit in exchange for building affordable housing. In 2024, those credits will expire and the complex’s current owner, Tralee Capital, will not be required to offer reduced rental rates.
Mike Kelly, president of Tralee Capital, said the Denver-based housing investment firm isn’t ready to say what will happen to the rental rates on those units once the credits expire.
Unlike many of the affordable housing units that have recently been built by town and county governments, Blue River Apartments is privately owned and not managed by the Summit Combined Housing Authority. So whatever happens to the units after the credits expire is entirely up to Tralee Capital.
“We can try to come up with creative ideas,” said Amy Priegel, Summit Combined Housing Authority executive director. “We can speak to the owner, but at the end of the day, they did buy that property, they do own that property, and they have the property rights that go along with that. So it would ultimately be their decision.”
Tralee Capital could decide to continue offering affordable rates on the Blue River Apartments units. However, the tax incentive to do that will go away.
“They have the ability to set their rent wherever they desire,” Silverthorne Town Manager Ryan Hyland said. “There’s no limitation on that, but they’re just no longer required to look at those (area median income restrictions).”
Kelly said the issue highlights the need for more available housing, affordable or not. Tralee Capital has been trying to build a new 48-unit complex, which would offer free-market pricing, on the lot next to the Blue River Apartments in Silverthorne since 2018, Kelly said.
That project has not begun.
“We’ve been trying,” he said. “We’ve been in front of planning, but unfortunately, we haven’t been able to build that thing due to a variety of reasons.”
When asked, Kelly would not provide specifics.
Kelly said he hoped the new apartments would provide housing for permanent residents who don’t fall into the area median income restrictions.
“Our project, that we’ve been trying to build forever, would have brought in 100-plus bodies of full-time people,” he said. “You’ll never win when someone can rent the unit through Airbnb.”
Hyland said Tralee Capital doesn’t have an active application at the moment. The project was shot down when it first went to planning and zoning because the site plan went over the lot’s zoning requirements for building height.
Hyland agreed with Kelly that new housing — affordable or not — is beneficial to the community.
“Any new housing in Silverthorne can help,” he said. “Obviously things that are designed with that affordability for workforce are the most accessible to the workforce in our community.”
Hyland said Silverthorne and the county are working hard to add housing to the community. The town continues to work on the Smith Ranch Project, which has brought 80 units of deed-restricted for-purchase housing with plans to add 42 more.
The Summit County government also has been working to add affordable housing neighborhoods. Most recently, the county has been accepting applications for the Dillon Valley Vistas neighborhood off Deer Path Road in Dillon Valley, also a for-purchase housing project.
That neighborhood adds six duplexes with 12 units to Summit County’s housing inventory.
“We’re always aimed at adding as many units as we possibly can, and it will be unfortunate if we lose the affordable component at Blue River Apartments, but again that’s the nature of that (Low Income Housing Tax Credits) 30 years,” Hyland said.
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