Aldjia Oudachene’s Littleton home is “a wish come true.”

The house is close to the school bus stop, near work and even has a guest room where Oudachene’s father stays when he visits.

“We have good neighbors who have children the same age, so they play together and I’m so happy here,” Oudachene said. 

Originally from Tizi Ouzou, Algeria, Oudachene, her husband and two children moved to Littleton in October 2020. In Algeria, Oudachene’s family lived in a house they could afford on her and her husband’s incomes as French teachers. When they moved to Littleton, Oudachene said it was a challenge. 

“When we came here, we started our life from nothing,” she said. “Here, to teach French, I have to learn English first.”

To make ends meet, Oudachene and her husband took full-time positions with Walmart, but, even then, the high cost of housing put homeownership outside of their budget. Instead, they rented a two-bedroom apartment.

“With the apartment, life was stressful for us,” she said. “There wasn’t a lot of space and no place for (the children) to play.”

Oudachene’s family needed more space and privacy. So they kept looking for a house. Oudachene said her family friend told her about Habitat for Humanity. The national nonprofit vision is a “world where everyone has a decent place to live.” And affordability is a major part of the organization’s vision.

The application process took about a year, but Oudachene said there was no way her family would have a house without Habitat for Humanity Metro Denver’s help. In the end, the organization provided an opportunity for the family to invest in a home within their budget.

“We would have had to wait to have the budget without Habitat,” she said. “It was so fast. Now, I’m happy to pay the mortgage because it goes into our home.”

From 2017 to 2022, the average home price in Littleton has gone up $300,000, but the city is not alone. Over the same period, Brighton saw home prices increase $225,000, Arvada saw a $275,000 increase and Lone Tree homes are up more than $470,000 on average.

As finding affordable housing becomes harder for a growing number of Colorado families, municipalities and nonprofits are looking to expand existing solutions like inclusionary zoning, community land trusts and deed restrictions.

Communities that have implemented one or more of these approaches report increasing their affordable housing stock, though officials emphasized that the complexity of Colorado’s housing situation means there is no silver bullet.

However, across the board, a key element to getting support for the expansion of affordable housing programs is changing the mindset of who benefits from them. 

Supply, but for whom?

Another impact of rising housing costs throughout the metro area, many communities are reaching a critical point where a majority of workers can’t afford to live where they’re employed.

Corey Reitz, the executive director for South Metro Housing Options, an affordable housing provider that serves Littleton and Arapahoe County, said housing prices are now unaffordable even for people who take home a solid paycheck. That includes earners topping $82,000, the median household income in Adams, Arapahoe, Douglas and Jefferson counties, according to data from the Colorado Housing and Finance Authority.

“In the past there was an affordability issue around those lower (area median incomes), but we’re to a point right now where affordability impacts so many people across a larger spectrum,” Reitz said. 

Across the state, the share of housing affordable to Coloradans has dropped significantly. In 2021, just 51% of the state’s housing stock was affordable for median income earners. That’s down from 76% in 2015, according to research from the Colorado Futures Center, a nonpartisan research group out of Colorado State University. 

Phyllis Resnick and Jennifer Newcomer, the authors of the study, said they believe the continuous rise in pricing, even as the housing supply grows, indicates a mismatch in the kind of housing needed and the kind of housing being built. 

“There’s supply, but supply for who? At what monetary level?” Newcomer asked.

It looks like this: subdivisions of four- and five-bedroom homes, handfuls of luxury apartments and few, if any, condos and starter homes. 

“The thing that we’re trying to figure out how to illuminate most specifically is this nuanced distinction between total rooftops and this notion of supply with respect to availability,” Newcomer said.

Resnick said the current market doesn’t incentivize the construction of lower-cost housing. Per her 2021 analysis, housing values in Colorado would need to drop by roughly one-third to return to the 2015 levels of affordability – something unlikely to happen, experts have told Colorado Community Media throughout our four-week housing series.

The ones feeling the crunch the most are those who earn the least money, though many of those struggling to afford housing have above-average salaries.

“I suspect when we finish our research, we’re going to find that housing that is affordable to people who are closer to the economic margins is sort of not feasible in the sense of being profitable for the folks who need to be out there building that housing,” Resnick said. 

A Golden gap

Without the market providing entry-level housing or starter homes, nonprofits and local governments have stepped in to try to fill the gap by subsidizing building and buying costs.

An extreme example is the city of Golden, where 95% of its workforce lives outside city limits. 

Just this month, the city applied for a grant to support a $65 million partnership with Habitat for Humanity to construct 120 for-sale condos and townhomes for residents making 80% of the area median income for households. That’s roughly $65,000 for an individual and around $93,000 for a family of four. 

Golden recently completed a housing needs assessment in October, which found that both housing prices and rent increased exponentially in less than a decade. The cost of the average house in the city doubled between 2015 and 2022. For the first half of 2022, the average single-family home sold for $1 million, up from $533,000 in 2015.

This means even relatively high-income earners in Golden are considered by the city to be burdened by housing costs.

“The majority of the housing that we’re projected to need in the next 10 years will need to serve households at or above 120% area median income,” Golden Housing Coordinator Janet Maccubbin said. “So you’re looking at households that would make well into six figures and yet there’s not housing that exists for them in Golden.”

Maccubbin said the newly formed Affordable Housing Committee is expected to meet in February and will begin to shape the city’s response and goals for addressing housing needs. 

Land and options 

Habitat for Humanity Metro Denver’s approach to providing affordable housing is to tackle two of the most expensive elements of housing — land and labor. 

CEO Heather Lafferty said the organization, which works in Adams, Arapahoe, Denver, Douglas and Jefferson counties, relies on partnerships with developers, as well as volunteers and program recipients to provide the labor.

To create affordable housing that stays affordable into the future, the organization utilizes Colorado Community Land Trust and deed restrictions. Under the land trust model, land is owned by a community trust or nonprofit, so homeowners only pay for the cost of the home. The trust currently has 215 properties, including townhomes and single-family homes, which serve households at or below 80% median income.

“It used to be that if we could just create an affordable product, it would be something that would be affordable in the future, just naturally, and that’s not the case today,” Lafferty said. “What (the community land trust) does is, then in law in perpetuity, it only allows those homes to be sold to homebuyers in a similar income category. So it provides affordability initially, but it also ensures 20 years from now it is sold with an income restriction.”

In addition to the trust, Habitat for Humanity Metro Denver also uses deed restrictions to ensure homeowners meet income requirements.

Lafferty said the models are successful because they provide lower-cost housing, while allowing homeowners to still build equity and eventually move into market-rate housing. 

“What we find is that a homebuyer is able to get into homeownership at a price point that works for them and they then are able to build equity,” she said “It’s really a steppingstone for people who are trying to get into homeownership and benefit from the equity homeownership allows households to build. But it also means that it’s not the kind of thing that happens for one family only.”

One of Colorado’s largest land trusts, Elevation Community Land Trust, which serves Denver, Boulder, Aurora, Longmont and Fort Collins, has created 700 affordable homes and served around 2,000 residents in its first five years of operating.

Rodney Milton, a board member for the Elevation Community Land Trust and executive director of the Urban Land Institute, said another benefit to having shared land is it helps to prevent displacement and keeps communities intact.

“The problem with reaping full equity is you can leave and the next person who buys the house could afford to buy it at a higher price and you lose the affordability,” Milton said. “(The land trust) locks in affordability, but it also locks in community dynamics.”

Habitat’s plan to purchase more land in its five-county service area is evidence that the organization believes in the land trust model for successfully housing more people, Lafferty said. 

“We don’t anticipate land getting any less expensive, even if the market cools,” she said. “We have an urgency and a problem today that we’re trying to meet, as well as a long-term problem that we anticipate, so we’re trying to solve for both today and tomorrow.”

Lafferty said one of the biggest challenges to expanding programs to serve more lower-income households and add moderate-income households is money. Last year, her organization received a $13.5 million donation from philanthropist MacKenzie Scott, an Amazon stakeholder, which allowed the organization to buy more property.

Even still, Lafferty said that Habitat likely only meets “a fraction of a percentage” of existing demand.

“We have a need in the metro area for tens of thousands of affordable houses,” Lafferty said. “That’s why we need bigger, bolder action.”

Inclusionary zoning 

Another tactic some municipalities are taking is to use a relatively new tool in Colorado, inclusionary zoning ordinances. State lawmakers in 2019 approved a law to allow cities and towns to require developments to include a certain number of affordable housing units or pay fees.

So far, only six communities have implemented inclusionary zoning: Broomfield, Boulder, Longmont, Superior, Denver and, most recently, Littleton. 

Littleton’s inclusionary housing ordinance, which went into place in November, requires all new residential developments in the city with five or more units to make at least 5% of those units affordable to people at or below 80% area median income for households, which is $62,000 for an individual or $89,000 for a family of four.

If developers do not include affordable units, the inclusionary housing ordinance will levy hundreds of thousands in fees against them to be paid to the city that can then be used on other affordable housing-related projects.

With upcoming development in the city, more than 2,500 proposed housing units will now be subject to the ordinance, presenting the potential for at least 125 affordable units. 

Littleton District 3 Councilmember Steve Barr said at the Nov. 1 council meeting that he is “not under any impression that the ordinance is going to solve housing affordability in Littleton or south metro Denver,” but that it provides a critical tool for addressing the crisis. 

Developers and others at the meeting voiced concerns about the ordinance making development too costly or difficult and warned it could result in a decrease in the overall available housing. Morgan Cullen, director of government affairs for the Home Builders Association of Metro Denver, told the Littleton council that the ordinance could burden developers to the point where projects wouldn’t be profitable, resulting in no new developments.

“The additional affordable units required by this ordinance will not be built if developers and builders decide that Littleton is not a suitable place to invest in the future,” Cullen said. 

However, Broomfield Housing Programs Manager Sharon Tessier said in an email that its inclusionary housing ordinance has resulted in 580 affordable rental units and 43 affordable for-sale homes in two years.

She said when the ordinance was initially in place, a majority of developers chose to pay the fee instead of building affordable units.

“It allowed us to provide seed money to our new independent housing authority, the Broomfield Housing Alliance, and other critical affordable housing projects,” she said. “However, we recognized that we needed to make some adjustments to our original approach — both based on the initial data from the program, as well as through comments from developers, other stakeholders, and the community —  that create better and more balanced opportunities for developers to provide on-site units while still providing the option to pay the cash-in-lieu fee.”

The original ordinance required for-sale single-family home developments with more than 25 units to restrict one-tenth of the units to 80% of area median income or pay a fee-in-lieu. The new ordinance, updated late last year, requires for-sale single family home developments with more than 25 units to restrict 12% of the homes to 100% area median income. It also increases the fee-in-lieu based on market rate adjustments.

Tessier said the reason the inclusionary housing ordinance was implemented in 2020 was to provide the chance for more people to live where they work.

“The idea was to expand housing affordability and to target those households that typically fall in the middle of the housing needs spectrum, meaning it would benefit those who are low middle to middle income earners,” she said. “In other words, it assists essential workers like the people who teach our children, who fight fires and keep our city safe.”

Nina Joss, Rob Tann and Corinne Westeman contributed to this story.

==========