Habitat for Humanity Roaring Fork Valley has never been one to stay inside a certain box when it comes to making the dream of home ownership a reality for more area residents.
The organization’s recent $35 million purchase of the L3 Apartments in Glenwood Meadows, with a plan to convert the 88 studio and one-bedroom apartments into ownership condominium units, is just another example.
“It took a real vision to complete this deal, and it was definitely a challenging decision,” said Gail Schwartz, CEO of Habitat RFV. “When you step up to something of this magnitude, there is risk involved. You need to think as a business, as a developer, and approach the project at a totally different level.”
Habitat already has the wheels turning on numerous other projects, including final construction on the 20-unit Wapiti Commons in Rifle, planning for another six units at its Confluence property in Glenwood Springs and — what Schwartz referred to as the “brass ring” for the organization — a modular home manufacturing plant in Rifle.
Construction on that facility is expected to begin after the first of the year, allowing Habitat to reduce home construction costs by building modular units locally, and also creating training and employment opportunities for the local workforce.
Even with all that’s going on, the opportunity to convert 88 existing rentals into ownership units at L3 was too good to pass up, Schwartz said.
“This is our 25th year [as a local Habitat affiliate], and this will basically double the production of affordable homes that we’ve been able to achieve in that time,” she said. “It’s something we knew could have a tremendous impact.”
Schwartz said the condo project addresses housing needs for the “missing middle,” those who make too much to qualify for housing assistance but not enough to purchase a market-rate home.
What’s expected to be a six-month approval process to convert the units from rentals to condominiums now ensues. After closing on Oct. 23, Habitat was also able to begin meeting with current tenants of the apartments to gauge interest in possibly purchasing their units, if they qualify.
“Those who qualify and are interested in becoming homeowners will be supported throughout the process,” Habitat said in a news release announcing the purchase. “Those who choose not to buy or do not qualify can stay in their apartments until the end of their lease.”
During that interim period, Habitat said it will maintain current rents and help with relocation efforts. The current L3 management, Green Leaf Management, has agreed to stay on throughout the conversion process, according to the release.
Once converted to condominiums, all L3 units are to be deed-restricted to maintain long-term affordability, same as Habitat’s other houses in the region.
Schwartz acknowledged that the project does trade one type of housing for which there is high demand and little stock for another.
Indeed, the rental market in the Roaring Fork Valley remains tight. According to the most-recent Colorado Housing Finance Authority (CHFA) Statewide Apartment Survey, for the second quarter of 2024, the apartment vacancy rate for the “Glenwood Springs Metro Area” was still just 1.3%. The Glenwood metro area is defined as the region from western Garfield County to Basalt/El Jebel.
That vacancy rate has improved some from a low of 0.4% during the third quarter of 2023. A “healthy” vacancy rate that can serve to keep rents lower, according to Colorado housing market experts, runs between 3% and 5%.
Rents continue to go up in the area. According to the CHFA report, average monthly rents for a one-bedroom apartment have risen from $1,700 at the beginning of 2022 to nearly $2,000 currently.
The L3 Apartments go for even more, ranging from $2,300 to $2,800 per month currently, Schwartz noted.
In approaching the purchase opportunity, Habitat noted that West Glenwood in particular had roughly 1,400 new rental units built in recent years, and no new ownership units.
“For us, it’s important to stress the value of stabilizing the housing situation for our workforce,” Schwartz said. “People have no control over their rents, and they continue to go up.”
Habitat’s ownership model targets prospective buyers who are employed locally and earn between 80% and 120% of the area median income. Condo prices at L3 are expected to range from $320,000 for a studio (454 square feet) to $388,000 for the larger one-bedroom units (722 square feet).
With unique financing opportunities available through CHFA and other lenders that Habitat works with, mortgages can end up being about $500 less than the current rents, Schwartz said.
“Our goal is to have people pay 33% of their income for their housing,” she said, adding that would include homeowners’ association dues.
Besides the units that will be offered to current tenants and other qualified buyers, Habitat is partnering with different governmental entities and private businesses to secure units at L3 for their employees.
So far, unit commitments have come from Garfield County, Glenwood Springs, the Roaring Fork School District, the Roaring Fork Fire Protection District, the Garfield County Library Foundation, Pitkin County, Snowmass Village and Rocky Mountain Pizza.
Schwartz emphasized that the units, once sold, would not be tied to their employment.
“In our 2023 community interviews, the number one issue was affordable housing,” Garfield County Libraries Executive Director Jamie LaRue said in a news release announcing the Library Foundation’s $100,000 commitment, adding the libraries have lost employees as a result of high housing costs.
The Habitat RFV project prompted a visit from Colorado Gov. Jared Polis last week, who lauded the public-private partnership that resulted in the purchase.
The project is identified as a state enterprise zone, qualifying it for federal and state tax credits and deductions, Schwartz said.
Habitat’s L3 condo project in Glenwood another step to housing the ‘missing middle’
