Plans and Concepts

The Tri-County Step Housing

Pilot Project

Thank you for allowing us to explain the current housing issue communities are now facing all over Colorado and the Nation, whether anyone addresses the issue or not.

We have found through exhaustive research that there are ways to assist that have not been thought of previous. One thing we discovered is that there is a maximum loan allowance achieved through FHA, by building 4-PLEX housing units. We build with Modular homes.

COHHC 50/50 Public Funded Profit-Share Option – “With public funding, we can offer shared profits with the tax base ‘in exchange for a tax advantage acceptable to our funding partners.'”

With public funding, we can offer shared profits with the tax base. The current FHA Maximum for Arapahoe County if we are to qualify under FHA specs, is $1,147,800 per 4-plex. It will cost us for the first one to build approx. $707,999. We can sell the entire 4-Plex under FHA guidelines for approx. $1,147,800 as defined by the FED. We make a gross profit of $439,800 on every 4-plex.

Then divide by two, the tax base gains half, providing approximately, $219,900. Our Program makes the same, on the very first transaction.

Without Public assistance, profits are not shared with the community.

With a gross profit of $439,800 on every 4-plex; marketing fees are estimated to be approximately 8%.

We found we can build a 4-plex for $860,000 This is for 4 units 2 of which are 4-bedroom 3 bath, (the end units) and one 3-bedroom 2 bath and one 1 bedroom 2 bath home. This is for one 4-plex. Not hundreds as needed. Now normally you would add another $100,000 for land and $72,000 for tap fees bringing the unit up to $1,032,000 plus a builder/developer profit of 40% bringing the total to $1,444,480, divide by 4 units and they are worth $361,200 plus marketing fees and commissions of an additional 7 percent ($25,283) and we have a total cost normally of $386,500 plus HOA fees. Amortized 30 years @ 3% provides a payment of approximately $1,650 plus HOA fees. It is estimated that 10,000 affordable homes are needed right now. Interest rates are rising, funding is needed to secure 3% interest rates for the homeless.

Fire is a big concern. New housing should be built fire-proof to avoid catastrophe. We build with modular or conventional construction methods depending on the expense at the time of construction”.

Why 4-Plexes? Because the State and Federal Government have decided they will loan the most amount of money, usually with the most flexible terms if this type of structure is provided to the purchasing public. COHHC Inc. is a Non-Profit homeless housing coalition. We are here to help…In addition to 4-plex housing units, we propose to build Mid-Rise housing (6 to 8 stories, allowing for 100 to 200 housing homes) located above a service level. Another words, we propose to put the doctors, counselors, pharmacy, medical equipment, imaging, laboratory, security, and transportation services below on the first floor to support the residents above. This works perfectly with homeless persons that need services along with housing.

MID-RISE HOUSING CONCEPT

Transportation for homeless persons in often a huge issue. Having transportation attached to the housing itself, makes a huge difference and provides immediate assistance when needed. With larger communities we

propose to surround the mid-rise nucleus with 4-plex housing. 4-Plex housing allows for back yards, people can enjoy the outdoors, have gardens or pet space. It also allows for greater mental health rehabilitation.

Currently planning departments want parking spaces included with new housing. The issue is most homeless persons do not have functional transportation. We need to change this requirement and allow for public or assisted transportation systems instead. Like Dial a Ride or RTD.

MID-RISE HOUSING allows for 30% or less of household income to experience home ownership. This helps to allow families and individuals to become financially secure.

100-200 homes cost approximately, $280-300sf. This means our 600sf studio costs $168,000, a 900sf One-bedroom costs $252,000, an1100sf Two-bedroom costs $308,000 and a 1280sf three-bedroom costs $358,400. With a large project the cost could be reduced to as low as $210-250 psf. Our commercial lease rates for the Ground level housing services are calculated 10% below the current commercial lease rates to attract the needed medical and mental health services to the complex. The top floor is reserved for the medical professionals serving the residents, providing for onsite residencies, another program advantage.

Our model uses the advantages of modular construction methods to save on cost and erection expense. Five stories can be achieved with a wood frame, six or more stores with metal frame. We do not use outside real estate services, everything is inhouse to save on expense, thus lowering the cost of our homes.

Modular Housing During Assembly

Once a modular project has been built in the factory and shipped to the site, as much as 90 percent of the construction of each modular unit is already done. For the onsite process to be successful, it’s really all about coordination. Good coordination can ensure the time and cost savings of modular are fully realized.

E.G, Offsite to Onsite (autovol.com)  Modular Construction Saves Costs

What has been tried?

A big one is TIF funds (Tax Incentivized Funds) these are public funds our leaders use for housing to assist because they have no other solutions. In the service workers case, $120,000-200,000 is often approved. This eats up a lot of tax dollars that really should go to other sectors. Ten homes, equals roughly $1.2-2 million in tax funds. A huge burden on the tax base, taxes need to be raised to pay for this huge expense.

Often, the service worker sells for one reason or another, then profits from the taxpayer dollars, which are then lost. This is not an affordable, sustainable solution without raising taxes, an unpopular constant issue. This can be prevented using Deed Restriction.

Deed Restriction is the answer

It protects the future values by limiting the amount of growth the home may achieve. Through a legal process, we limit the growth the home can achieve to 1% per year, normally, 1/3 of the rate of inflation. Historically, inflation is limited to around 3-5% per year averaging using 20-year cycles.

This means that when the service worker purchases a home, it can only gain 1% per year in equity no matter what the market does. This way it takes 10 years to gain 10% in value over the purchase price. So, in ten years when all the other homes are selling for market values, our deed restricted homes will continue to support the service industry, thus supporting community stabilization and growth. 

This is transitional housing, housing to restabilize, improve finances and then move on. This housing gets people off the streets and into a stable environment to rebuild their lives.

How do we do it? We find likeminded people and programs to assist.

We met with managers at a couple of local Lowes Stores. Then we called Lowes Corporate. It now appears that we have support for our programs if we make an application for the support we seek, with the store managers as we were informed, by Lowes Corporate. Lowes has offered our program a discount on all materials.

Home Depot, we contacted Home Depot Renovations, they have asked us to apply for a renovations grant, which will allow each home to be renovated every 5-8 years depending on condition through yearly inspections to determine wear factors and longevity of materials installed, to receive a manufacturers non-profit discount.

We think help is needed to do away with unnecessary regulatory barriers (e.g., parking requirements, occupancy limits, and exclusionary zoning) to both development of and access to affordable housing, especially near jobs or transit. Green Energy System are needed to provide the greatest amount of comfort living with the least expense.

COHHC Tri County Step Program zero energy homes – the ultimate in energy efficiency – involves 12 integrated steps that utilize commonly available building materials and equipment along with easy-to-learn building strategies. By following these steps, we can build a new home that is affordable and costs less to maintain.

1. COHHC Cost-effective zero net energy homes begin with smart designs
2. Using the sun for heating through south facing windows during the winter lowers heating costs.
3. The home’s energy use should be estimated during the design phase using energy modeling software to ensure that the goal of net zero energy can be achieved while keeping costs down
4. Super-sealing the building envelope is the single most cost-effective measure we can take to improve the energy efficiency of our zero-energy homes.
5. After making the house airtight, super insulating the house may be the second most cost-effective strategy for creating a zero-energy home. R-50 walls, R70 ceiling and floors
6. Windows and doors are like big energy holes in a well-insulated, airtight building envelope and are the third most cost-effective opportunity for making our home energy efficient, We use only the Highest Rated components in all of our designs.
7. Zero energy homes are airtight, a continuous source of fresh filtered air and moisture control are critical to insure the safety of residents.
8. Using Highly efficient, cost-effective, heating and cooling systems are essential to meeting the net zero energy goal
9. Water heating is often the largest energy expense in a home after heating and cooling. We use tankless on demand Highly Efficient water heating systems.
10. Minimizing energy use for lighting, while optimizing light for residents, is an important feature of zero energy homes. LED lights are the perfect match for these tasks.
11. Since zero energy homes highly have energy efficient building shells and use high efficiency HVAC and water heating equipment, new category, appliances, and electronics,     become the most important factor that we use in our designs.
12. Grid-tied solar photovoltaic (PV) roof panels currently provide the most cost-effective form of renewable energy for our zero-energy homes.

Other methods of savings are using the lands owned by the governing bodies we support. Modular construction allows for faster construction with higher quality controls of labor and materials.

Our motto: “You bring the infrastructure, and we will bring the vertical.” Communities bring the land and utilities, and we bring the housing. Yes! our programs can help the homeless.

Property taxes need to be reduced, but not necessarily forgiven. Reduction is necessary to assist with the deed restricted homes.

Each tax base we assist will have similar needs. Our program provides stability.

Again, we lease and sell all units ourselves; this eliminated many issues and promotes goodwill in the project. We also maintain and run the homeowner’s association, along with the lower-level lease space designed for housing and personal medical and mental health.

Down payment and closing cost assistance

With our profits we will loan the closing costs and down payment to the purchaser totaling up to 6%.

We agree not to foreclose on the Down and Costs loan in case of foreclosure. This further protects and supports this housing program and the persons in need of housing.

Further savings may be realized by working with the local Housing Authority, this may be necessary as planned, to work with the tax base as indicated previous by the cities we have met with plus the housing authorities are already working with the needing public and have valuable programs already in place.

From our profits we will loan the 5% down payment and closing costs ($30,918 in this model) at a rate of 5% compounded daily with no prepayment penalty of any kind. Providing a 3-5 year, silent second so the debt does not affect FHA loan guidelines. Amortized 30 years with a 5-year balloon, creates a silent payment of $166 per month withheld for 3-5 years meaning payments start on the 37^th- – 60^th month,

With a sixty month (balloon), we make a profit of approximately $9,958 per unit, for each homeowner that does not lose their home to foreclosure. This income pays for administration including salaries of program employees.

If the home goes into foreclosure for any reason the project HOA has a first right to repurchase the home and sell it to another qualifying community resident as defined by this program.

How do you get back foreclosure costs for redemption? The Taxpayer forecloses as allowed by the program.  A foreclosure fee may need to be agreed upon by the homeowner at the time of purchase. Foreclosure rights need to be adjusted to allow for lower foreclosure costs to maintain the programs integrity. Remember this is a deed restricted community. We need to eliminate the high-priced law firms that eat up all equities through foreclosure.

This program starts by leasing our homes to qualified persons for up to 24-months. This way the new resident can capitalize on State and local housing funding opportunities that can be utilized with homeownership upon completion of requirements. 24 months to repair the resident’s credit, and prepare them to re-enter community life, we provide financial counseling. Auto deduction of housing payments from wages will insures residents meet the FHA guidelines of no late payments for 12 months, this helps with loan success.

Homeowners build community growth with equity and pride, which provides much needed stability and growth to the community.

Low-income rentals generally bring down neighborhood values and crime stats go up. Pride of ownership tends to build communities.

It also allows for communities to prosper and grow. Yes, we make a profit, but greatly reduced to support needed housing plus we use our profits to build more housing.

People are living in tents with their children because they cannot afford housing. Those children are our future voters. Those parents are our present voters.  Affordable housing is a basic Right, not a privilege.

The American Dream is going away because of greed, and the continued use of antiquated programs. Please help us to bring change and build our communities back. Happy communities start with Affordable Housing. Not high-priced rentals!

Some of the contained information was derived from the January 2022 Affordable Housing Transformational Task Force Recommendation Report and information contained within the Root Policy Research, (Expanding Housing Affordability, Feasibility-Study) revised 9/28/2021, design information from effekive.com and autovol.com was used for some of the contained information which has been verified by outside sources.

“Capitalism is fine. We feel, Greed is not.”

Sincerely

The Board of Directors

Colorado Homeless Housing Coalition, Inc.