‘Missing middle’ housing project planned for north Fort Collins

PHOTO/COURTESY SZANTON CO.

Originally published at Fort Collins Coloradoan April 02, by Rebecca Powell.

A multi-family development for middle income earners is proposed in north Fort Collins, and it'll be the first project in the city to get money from a new state fund for affordable housing.

The 76-unit project is planned for 302 Conifer St., which is located east of North College Avenue, near The Outpost student housing development and across from the Murphy Center for Hope.

The four-story development will be a mix of eight studio, 56 one- and 12 two-bedroom units for people making 70% to 100% of the area median income (AMI).

In 2024, AMI was about $83,000 for one person and $119,000 for a family of four.

The project will “serve a demographic that hasn't typically been serviced by affordable housing, what is often called the missing middle, people who are making too much to qualify for low-income housing tax credit units, which serve people typically at 60% and below,’ said Carl Szanton of developer The Szanton Company during a March 27 presentation to the Fort Collins Urban Renewal Authority.

The URA voted to pursue loaning $3.22 million and granting up to $100,000 for the $26.2 million project. The loan will gather interest of 3%, and the grant will be funded by future property tax payments.

Helping to fund housing within the URA is “really a reliable blight prevention and mitigation strategy,” Andy Smith, URA redevelopment manager, told the board.

The URA’s investment will also have the benefit of helping to fill the funding gap for a housing project that is located on a difficult site, Smith said, noting its location next to the Murphy Center, a services provider for those experiencing homelessness.

Of the 76 units, 59 would be restricted to residents making less than 80% of AMI, which is about $66,000 for one person and $95,000 for a family of four.

The rest of the units would be designated for residents making less than 90% or 100% of AMI.

The property will be required to remain deed-restricted for at least 30 years, and it’s possible it will become subject to city rules requiring it for 60 years.

Amenities include a west-facing roof deck, a resident lounge, a fitness room, indoor bike storage, a bike and dog wash station, and resident storage units. The units will be all electric.

Construction could begin in summer 2025 with an opening in summer 2026, according to the presentation to the URA board.

The project is still working its way through the city process for a basic development review.

How Proposition 123 funding works

Proposition 123 was passed by voters in 2022 to create a fund for affordable housing projects across the state by retaining money from existing state tax revenues.

In order to qualify for money available through Proposition 123, cities must agree to build a set amount of affordable housing in the coming years. Fort Collins agreed to increase its affordable housing supply by 3% every year for three years to reach 555 new units.

This project will get $7 million from the state Affordable Housing Financing Fund’s Equity program within Proposition 123. The project was one of six selected statewide in the first round of funding last year. The original award was for $5.8 million, but it has since in-

creased to $7 million.

Of the $26.2 million needed for the project, $13 million is expected to come from loans, and $L8 million in other equity and credits, leaving a gap of $4.2 million, according to the URA.

The NoCo Foundation had planned to contribute $1 million, but itis not committing at this time, Smith said. The Szanton Company will defer 20% of its development fee and contribute $645,000 as sponsorship equity, for a total of $945,000.

Szanton is an affordable housing developer that has completed 14 developments using low-income housing tax credits. It manages all 14 properties.

As part of the state funding program, tenants get monthly and annual cash back credits to be used for what they might need, including saving for a down payment on a future home.

“We have had issues addressing this missing middle housing, and there are real financing gaps that exist, and this was such a creative way to make this come to fruition,” said URA board member and Fort Collins mayor pro tem Emily Francis.

She said the project’s income limits mean there’s more of a guarantee that the money will benefit its intended target.

“Financing for these kind of projects is tricky,” said URA board member and Larimer County commissioner Kristin Stephens, especially if they aren't in the lower AMI ranges, and developers across the state are struggling to bridge what could be a $1 million to $5 million gap.

“For the urban renewal authority to find a way to help make that happen is a really important piece, and really hope it becomes a sort of statewide model in trying to figure out how to find those gap dollars,” Stephens said.