Citation
Financial alternatives for providing low and moderate income housing in small towns in Colorado

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Title:
Financial alternatives for providing low and moderate income housing in small towns in Colorado
Creator:
Rubin, Linda S.
Place of Publication:
Denver, CO
Publisher:
University of Colorado Denver
Publication Date:
Language:
English

Thesis/Dissertation Information

Degree:
Master's ( Master of urban and regional planning)
Degree Grantor:
University of Colorado Denver
Degree Divisions:
College of Architecture and Planning, CU Denver
Degree Disciplines:
Urban and regional planning

Notes

Abstract:
Recently, Colorado Governor Richard Lamm addressed a s tate sponsored conference titled "Housing, The Challenge of the 80' s ," and he provided these startling s tatistics : In 1975, the median price for a home in Colorado was $35,000; in 1980 it jumped to $72,500. If we are to house our projected in crease in population, 1.1 million new homes must be build by the year 2000, with an estimated capital inves tment of $54.5 billion, 15% of which will need some kind of assistance. This need for new housing, in the face of rapidly escalating, and always high mortgage rates, paint a grim picture for prospec tive Colorado homeowners . The conference itself was an attempt by the state to bring together various factions in the housing field, developers, local and state government officials, f inancier s and interested citizens , to try and develop a role for the state and provide a forum for these various individuals to communicate their needs and concerns . The debate during the day long conference was lively, to be s ure. According to the Governor, the need for "affordable" housing will be one of the most difficult needs to meet in the future, and no one at the conference either disagreed with him, nor had an easy solution. Housing is so much more to people than buildings--it is a career for contractors aRd developers, a community for residents, a tax base for local government, and a high or low risk for bankers--and no one is exempt from feelings on the issue of housing.

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Copyright [name of copyright holder or Creator or Publisher as appropriate]. Permission granted to University of Colorado Denver to digitize and display this item for non-profit research and educational purposes. Any reuse of this item in excess of fair use or other copyright exemptions requires permission of the copyright holder.

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FINANCIAL ALTERNATIVES FOR PROVIDING LOW AND MODERATE INCOME HOUSING IN
SMALL TOWNS IN COLORADO
204 00265 5687
by
Linda S. Rubin
A thesis (Studio 3) submitted in partial fulfillment of the requirements for The Degree of Masters of
Urban and Regional Planning/Community Development College of Urban Design University of Colorado - Denver
December, 1980


PROJECT OUTLINE


PROJECT OUTLINE
The Nature of the Problem
A. Rapid Growth in Small Towns
1. Energy Impacted - a radical change
2. Recreation Impacted - building on an existing shortage
B. Common Characteristics
1. Sky high land costs
2. High construction costs
3. Red tape and delay in processing development plans
4. More profit in expensive unit construction
5. Small budgets and staffs
6. Residents needing housing solid, employed, needed
C. How This Growth is Different
1. Need is in moderate as well as low income
2. Single people particularly handicapped
3. Pressure building on existing shortages
4. Traditional programs not applicable
D. Purpose of the Study - Analysis of Alternatives, Compare and Contrast
E. Method of Research
1. Research nature of programs
2. Contact administering agencies
3. Contact small towns for data on shortages and their program usage
Available Programs
A. The Planning Process
B. Federally Funded Programs
1. Department of Housing and Urban Development (HUD)
a. Small Cities Program (part of Community Development Bloc Grants Program)
b. Urban Development Action Grants (UDAG)
c. Lower Income Rental Assistance (Section 8 subsidies)
d. Various Mortgage Insurance Programs
2. Federal Housing Administration (FHA)
3. Farmers Home Administration (FmHA)
a. Home Ownership Loans
b. Rural Rental Housing


4. Veterans Administration (YA)
5. Banking Legislation
a. Community Re-Investment Act (CRA)
b. National Consumer Cooperative Banking Act
C. State of Colorado Funded Programs
1. Colorado State Division of Housing -Development Grants
2. Energy Impact Monies
a. Oil Shale Trust Fund
b. Energy Mineral Severance Taxes
c. FmHA "601" Funds
D. Additional Sources of Funds and Aid
1. Colorado Housing Finance Authority (CHFA)
a. Single Family Mortgage Program
b. Multi-family Rental Program
2. Rural America
3. Colorado Housing, Inc. (CHI)
Evaluation of These Programs Some Innovations
A. Breckenridge
B. Boulder
C. Aspen
A Planning Approach
Conclusions


VII. Appendices
A. I - Programs Summary Chart
B. II - Letter Sent to Towns
C. Ill - List of Towns Receiving Letters
Other Agencies Solicited
D. IV - Chart of Towns Responses
VIII.
Bibliography


Recently, Colorado Governor Richard Lamm addressed a state sponsored conference titled "Housing, The Challenge of the 80's," and he provided these startling statistics: In 1975, the median price for a home in Colorado was $35,000; in 1980 it jumped to $72,500. If we are to house our projected increase in population, 1.1 million new homes must be build by the year 2000, with an estimated capital investment of $54.5 billion, 15% of which will need some kind of assistance. This need for new housing, in the face of rapidly escalating, and always high mortgage rates, paint a grim picture for prospective Colorado homeowners. The conference itself was an attempt by the state to bring together various factions in the housing field, developers, local and state government officials, financiers and interested citizens, to try and develop a role for the state and provide a forum for these various individuals to communicate their needs and concerns.
The debate during the day long conference was lively, to be sure. According to the Governor, the need for "affordable" housing will be one of the most difficult needs to meet in the future, and no one at the conference either disagreed with him, nor had an easy solution. Housing is so much more to people than buildings—it is a career for contractors and developers, a community for residents, a tax base for local government, and a high or low risk for bankers—and no one
is exempt from feelings on the issue of housing.


CHAPTER 1 THE NATURE OF THE PROBLEM
Many Colorado small towns are experiencing an increasing housing shortage for low and moderate income groups which is unique to Colorado's changing economy, and linked just as strongly to her past. Small mountain towns who have always attracted tourists, and more recently, skiers, are experiencing an expansion of that seasonal housing demand, and offerings are almost exclusively within the price range of the well-to-do—condominiums and homes beginning in price at $70,000 and going up from there. Rentals, in such towns as Telluride, begin at $400 per month and for a one bedroom, and many rental units have been converted for sale at astronomical prices, eliminating their availability to low and moderate income people. These tourist areas need people—usually single, and of low and moderate income to run their stores, wait on their tables and type their letters. It has only been recently that employers have had to struggle to recruit seasonal employees, and the lack of adequate, affordable housing is one primary reason.
Other small towns are undergoing dramatic changes due to a developing (or in some cases, re-developing) mining economy—especially as it relates to oil shale. Overnight, towns double or triple in size, or brand new towns are built. There is no or very little existing housing stock to utilize, and the most common solution has been to erect a series of barracks-like trailer parks. In these towns, not


2
only workers and service people, but managers and executives are moving in. The type of pressure being exerted in these towns is well exemplified by Exxon's estimate of an expected increase of 1.7 million people living on Colorado's oil shale rich western slope in 20 to 30 years, where only a few thousand live now. The prospect of housing all of these new residents is mind-boggling.
Both types of towns have characteristics of their housing shortages which they share in common. The price of land for development has skyrocketed as soon as the pressure to build has surfaced. There is an accompanying very high cost of construction and supplies in towns that are harder to reach by truck. There is much more profit available to the developer who builds "custom units" for high income families with all the "amenities." Long procedures full of red tape delay in approving a plan and increase a builder's costs.
Small towns have small budgets and staffs who often cannot deal effectively with the kinds of pressures the shortages bring. Often, the residents needing housing are residents with a solid job, solid citizens who benefit their communities by living there, and whom the communities need just as much for the services they provide and the jobs they perform.
M
What complicates the problem is that this housing shortage is different from shortages experienced in the rest of the United States, and dealt with by various government programs. The need for housing definitely exists in the


3
moderate income level as well as low income. Single residents are particularly handicapped by the high prices, and even two jobs in a town may not provide enough income to pay for a person's expenses. These shortages are building, in many cases, on existing shortages, already resistant to resolution due to the high costs mentioned above. A large part of the problem is that these traditional governmental approaches do not appear to be aimed at the components of Colorado's housing shortages.
The purpose of this study is, then, not so much an analysis of the problem, because the problem appears pretty cut and dried, and there is widespread acceptance of the existence of it, but to analyze the current financial alternatives available to small towns to provide needed low and moderate income housing, and to contrast and compare these alternatives with what is actually being done by small towns. The assumption is that what is available is not always known to the town administrators, and that much of what is available isn't applicable to Colorado's specific problems.
The method employed was to research different sides of the issue. Programs were studied and analyzed to determine their eligibility criteria, target population, and the amount of their usage in the state. The agencies administering these housing programs were contacted to acquire information on which programs are being used in Colorado and what success


is being met with them. Various other agencies dealing with housing were contacted to discover their programs, purposes, and impressions of the problem and possible solutions to it. Several small towns all over the state were contacted to obtain the following information: l)Does a housing shortage exist in your town? 2)If so, are you using any federal or state programs? 3)lf so, which ones, and how successfully?
4)lf not, why not and what is your town's policy and approach?
The eventual result of this research was to develop an approach to providing low and moderate income housing that will have some universal appeal and application. The tenets of this approach would be checked with different authorities in the housing field to add relevance and realty.


5
CHAPTER II AVAILABLE PROGRAMS
The Planning Process calls for a series of steps intended to resolve a given problem, the key to which is the direct involvement in the process of the community.
The most crucial step a community must take, after becoming aware of a housing shortage, and analyzing and assessing the reasons for it, is to research available alternatives which have been used to address the problem. Ideally, the most applicable alternative(s) to the town's situation and established goals would be implemented in the community, with as much citizen participation as possible, and followed at a specific point in time by a period of evaluation and adjustment.
Those towns in Colorado experiencing a shortage of low and moderate income housing are for the most part aware of the shortage and of the causes for it, though there are a few towns whose conservatism prevents them from considering low and moderate income housing as a relevant concern of town government. Where a good many of the town administrators stand now is at the research or implementation phase. Many have employed a trial and error method of applying for various programs or, others having heard that federal and state assistance is more trouble than it is worth, have avoided "institutionalized" programs. Nonetheless, the federal government and the State of Colorado, as well as several other agencies, offer a number of


6
of programs designed to help both governments and individuals directly in providing low and moderate income housing. Additionally, there are several towns whose approaches are unique to their town, and whose methods of approach are of value to other towns. In this section, each of the available programs will be reviewed briefly; a summary chart appears at the end of this paper as Appendix I.
A. Federally Funded Programs
The agency dispersing the largest amount of funds and programs for housing is the Department of Housing and Urban Development (HUD). Their program booklet lists 40
programs dealing specifically with housing, and an addition-
*
al four that deal with community development and have potential uses in providing housing.
One of the most widely utilized programs that HUD has to offer is the Community Development Bloc Grant Program (CDBG), created by the Housing and Community Development Act of 1974. Bloc grants are awarded to local governments for a variety of community development activities. But most of the funds, however, are allocated to urban counties.
What used to be called "discretionary funds" for smaller towns has now become the Small Cities Program, which provides two types of grants, single purpose: one year grants to meet a specific need in the areas of housing, deficiencies in public facilities of economic conditions; and comprehensive


7
grants: one to three year grants used to address a need in defined areas which are related to each other. To qualify, a town must have 50,000 residents or less, show citizen participation in the planning, implementation and assessment of the program, and must demonstrate a degree of poverty and need. Grants are based on the extent of the poverty and substandard housing in the community, the extent to which the proposed program benefits low and moderate income persons, and the impact of the program on problems identified by the applicant. Competition is great for the $33 million allocated to the six state Region VIII in 1980, and 50% of these monies go to small cities within urban areas.
A second important program of HUD's is the Urban Development Action Grant Program (UDAG), which became law as part of the Housing and Community Development Act of 1977. These grants are intended to assist "severely distressed" cities and urban counties to revitalize local economies and reclaim deteriorated neighborhoods, through a combination of public and private investments, in projects of maximum benefit to low and moderate income persons and members of minority groups. The private sector's financial commitment must be secured by the community prior to the start of a project. Of each year's UDAG appropriation, at least 25% will be set aside for communities with populations


8
of 50,000 or less. Funding is based on a reasonable balance of residential, commercial, or industrial projects.
Several eligibility criteria are used, but the primary one is the comparative degree of "physical and economic distress" among the applicants. (HUD Programs, p. 6) Here again, as in the CDBG Program, stiff competition for monies is stressed.
Housing provided to low and very low income residents is often provided with funds from the "Lower Income Rental Assistance Program" more commonly referred to as "Section 8" funds. (Section 8 of the United States Housing Act of 1937) Neither construction nor rehabilitation is provided in this program, but a rental subsidy which makes up the difference between 25% of that rentor's income and the "fair market value" of the unit rented are. Residents must meet income guidelines which are different for each state, and for Colorado are $10,979. Included in Section 8 funding are new, rehabilitated and existing units. The most common use of this program in small towns has been housing for the elderly.
The above three programs are the largest sources of funds for providing low and moderate income housing in small towns by HUD. HUD has seven additional programs which provide mortgage insurance for such housing types as multi-family rental for low and moderate incomes, home


9
ownership for low and moderate income families, multifamily rental housing, condominium housing and mobile homes. Some examples: Mortgage insurance is provided to lenders in the Low and Moderate Income Families Program in the maximum amount of $31,000, which buys nothing in these towns. in the "1-4 Families" Program, the eligibility criteria apply to those who "can afford the case investment and mortgage payments." The condominium program loans are available to those who are "credit worthy."
Here again, programs are aimed too low for the cost of housing, or the eligibility criteria are aimed too high for residents to qualify.
The Federal Housing Administration is part of HUD and insures mortgage loans made by private lenders on homes through creation of a mutual mortgage insurance fund. Prior to the National Housing Act of 1934, residential mortgages often required a 50% down payment and a five year term during which interest was payable annually, frequently with the principal falling due in full at the end of the term. FHA changed this by offering long term, level debt service and low down payment. FHA administers mortgage insurance programs under which mortgage lenders are insured against loss in financing first mortgages on single family homes, on multi-family housing projects and on loans to finance repairs and/or home improvements.


10
(Northwest COG, p. 23) FHA's programs are available to most income levels through their local mortgagee.
One of the most interesting housing alternatives encouraged by FHA is cooperative housing where the resident does not own his unit, but owns stock in a non-profit corporation which in turn owns his building. He then has the right to live in that unit as long as he/she owns that stock. Section 213 of the Housing Act includes cooperative projects designed primarily for middle income families. (Northwest COG, pp. 27-28) Not especially popular in the West, the Housing Cooperative, which has been very successful in the East, can provide a flexible and independent source of housing for low and moderate income residents.
Charged with serving the rural population of the United States, is the Farmers Home Administration (FmHA), a part of the United States Department of Agriculture.
FmHA has a variety of programs for rural and farm families,
•»
and two apply specifically to low and moderate income housing. The Home Ownership Program offers loans to help families with low and moderate incomes up to 100Z of the FmHA appraised value in "open country and in places with populations of 10,000 or less and not associated with urban areas." The families must be without decent safe and sanitary housing, be unable to obtain a loan from a private lender, and have sufficient income to make payments,


11
insurance premiums, taxes and maintenance. According to the Denver office of FmHA, the formula for determining eligibility is to take the gross income, deduct 5/ and $300 for each child, the resulting adjusted income cannot exceed $15,200. In Fiscal Year 1980, FmHA allocated some $32,000,000 to Colorado for this program.
FmHA also has a Rural Rental Housing program where loans are made to build, purchase or repair apartment-style housing for persons with low and moderate incomes and those 62 years of age or older, again in "open country and areas to 20,000 in population." Family income cannot exceed $11,000 (adjusted income), borrowers must have the ability and experience to operate and manage a rental project and must repay or refinance through commercial lenders when their financial position reaches the point where they can do so. Individuals, trusts, local public agencies, consumer cooperatives and profit and non-profit corporations are eligible to apply for the $7,000,000 allocated for Colorado in Fiscal Year 1980.
The Veterans Administration (VA) aids veterans in obtaining loans on favorable terms to buy or build homes with no down payment required. The VA maintains three major areas of authority: 1) To partially guarantee loans made to veterans by eligible lenders, 2) to insure loans made to veterans by private lenders, and 3) to make direct


12
loans to veterans in instances where mortgage credit is not otherwise available. Those eligible for VA loans are veterans, un-remarried widows and certain servicemen, and these individuals can receive a great deal of help in obtaining housing in small towns by using their VA benefits.
These programs are the major sources of aid specifically for housing from the federal government. In the forseeable future, as an energy impacted area, Colorado may be eligible for special federal energy development/impact types of funds. Outside of the housing legislation,
Congress has passed two pieces of banking legislation that may have a positive impact on providing low and moderate income housing in small towns. Neither one provided funds directly, but could be combined with other efforts to get needed housing built. Title VIII of the Community Development Act of 1977, now referred to as the Community Reinvestment Act (CRA) states that financial institutions have a "continuing and affirmative obligation" to help meet the credit needs of their local communities, especially as those needs apply to the areas of low and moderate income housing. Banks are examined periodically and their performance on meeting community needs is evaluated. According to Ray Wiske of the Federal Home Loan Bank Board, the legislation doesn't have any real "teeth" in it for enforcement, but future projects a bank wishes federal approval
/
/


13
for can be delayed until a bank's performance on CRA standards is improved. The second piece of banking legislation is the National Consumer Cooperative Bank Act of 1978, which created the Consumer Bank. The Bank was established to encourage the development of consumer assistance to eligible consumer housing cooperatives and their members to finance the construction of new projects, acquisition of existing housing for conversion to cooperative ownership, including necessary rehabilitation, improvement repair, or modernization. Included in the Bank's services is provision of technical assistance in developing and managing such coops. Either one of these pieces of legislation could provide incentives to build or acquire, and develop low or moderate income housing. Cooperatives have an excellent potential for providing housing.
B. State of Colorado Programs
Within the structure of the state of Colorado, there are two sources of housing financial aid. The Colorado State Division of Housing (DOH) gives State Housing Development Grants for the rehabilitation, construction or acquisition of modest rental and owner occupied units for low income persons and households. These grants are designed to make up the difference between what an agency has already received in grants and aid, and what is further needed— there are no "front end" monies available. The appropri-


14
ated funds are split evenly between urban and rural applicants. Grants are based upon the absolute need of the household, their income level, and are made to public entities and private, tax exempt, non-profit corporations. Some $2,000,000 was appropriated for 1980, most of which has already been applied for and granted.
The State Department of Local Affairs has three energy impact related sources of funds for energy impacted impacted communities only. The Oil Shale Trust Fund, some $50 million, is lease payments returned to Colorado that is in turn appropriated by the legislature. Local communities must present requests to their local COG and then to the Joint Budget Committee. One bill consisting of several requests is then presented to the legislature for approval. The Energy Mineral Severance Taxes are paid in the process of mining in Colorado. Of the total monies,
15% is returned to local communities in energy impacted areas where the community has decided on local projects.
A local review team prioritizes the requests and the Department of Local Affairs makes the final decisions on grants. For receipt of these monies, a community must be in an energy impacted area, the project must be sponsored by a local government agency and the project must benefit the public at large.
The third program under the Department of Local Affairs


15
is actually a loan program administered by the FmHA—called "601" grants. In this case loans are made to buy land and bring in utilities, but not to build. The state has advisory capacity, but decisions are made by FmHA. Monies must be used for public facilities and usually go into publicly owned and assisted public housing. The grants are made to towns who cannot get any other funds in a timely manner. Again, with these Colorado programs, communities are competing for scarce funds, and there is not nearly enough money to meet every community's needs.
C. Additional Sources of Funds or Aid
Among the financial alternatives for small towns to provide housing for low and moderate income residents are three agencies that are not governmental in nature, but do provide some very essential help and money. The Colorado Housing Finance Authority (CHFA) was created in 1973 by the Colorado General Assembly to provide funds for the financing of housing for low and moderate income persons and families through the sale of tax-exempt revenue notes and bonds. These notes and bonds are the obligation of the Authority and not of the state (Investing in Colorado, p. 1). CHFA operates two separate housing programs. The Single Family Mortgage Program, due to the tax-exempt status of its bonds, is able to make funds available to participating lenders at a below-market rate of interest, and the lenders in turn use
/
/


16
the funds to make below-market rate mortgage loans to qualified families and individuals. These families’ and individuals’ adjusted income cannot exceed $18,500. Since the inception of CHFA, some $180 million has been loaned to 5600 people in Colorado. In 1979, 80% of these loans were made to prior rentors, whose average income was $15,082, whose median age was 27, and 44.5% of which were minority, including 23% of which were women. CHFA's Multi-Family Rental Program provides construction and permanent mortgage financing for the rehabilitation or construction of apartment dwellings for low income persons, at least 20% of which must be HUD Section 8 qualified.
Rural America is a non-profit, membership organization founded in 1975, whose goal is to assure rural people equity in the formulation and implementation of public policies and programs. Among their activities are a national program of action oriented research, technical assistance and training, current legislative information and public education and advocacy. Basically their programs center on providing information to their membership through several newsletters and publications and providing lobbying in Congress and at the state level. However, mentioned in their literature is the administration of "a revolving loan fund that helps community based organizations leverage capital needed to develop rural housing projects." (Isn't it


17
About Time Someone Spoke up for Rural America? p. 3).
This fund was established "in recognition of the growing problem affecting rural people's access to land," and currently has $1 million available, but the criteria for making these loans has yet to be finalized.
The third non-governmental agency involved in low and moderate income housing is Colorado Housing Incorporated (CHI), which was formed in 1971 to provide technical assistance and problem solving services in the field of subsidized housing for individuals and families in Colorado. CHI is a non-profit Colorado corporation governed by a nine member board of directors selected from various Colorado communities, and includes persons of low and moderate income levels as well as businesses. They receive their funds from the Community Services Administration. CHI offers assistance only to local groups, officials or individuals who demonstrate serious and constructive intentions. CHI requires that services to be rendered to be outlined in a letter of agreement, and except in the case where a 1^% fee for packaging is allowed in a government grant, CHI offers their services at no charge. (Northwest COG Guide to Federal and State Housing Programs, pp. 41, 42) Their approach is to assign staff personnel at various points in the project to help with such functions as housing surveys, funds applications, etc. Their primary responsibility is to stay informed on


18
the current levels of various monies available in Colorado.
This kind of inventory and planning service could be invaluable to a town who does not have the time or staff to pull together a complete housing package that many programs require for application for funds.
These then are the programs most involved with low and moderate income housing which are available to small towns today. Each of them was developed with a specific "target" in mind, each has a specific set of eligibility criteria.
These criteria, and the administration of the agencies dispersing the funds are what make these programs applicable to the shortages in Colorado—or not applicable.
/
/
'Jf


19
III. AN EVALUATION OF THESE PROGRAMS
In order to evaluate these programs, it is necessary to take a second look at low and moderate income housing shortages in Colorado. These small towns vary in political affiliation from liberal to extremely conservative, mostly on the conservative side, in a state that very much in its rural areas subscribes to the western philosophies of personal freedom, as little government as possible, and the work ethic. Rural residents often look on the involvement of government in their daily lives very skeptically, even though in the ski areas there tends to be more of an open mindedness to the need of government to be involved in housing. These towns do not have the extreme "pockets of poverty," or are "severely distressed" expecially compared to other cities reviewed for HUD programs. There is just as extreme need for moderate income housing as there is for low. Inflation has hit these towns even harder, as their rural locations and often difficult terrains make construction even more expensive. Additionally, developers are easily enticed to build the expensive condominium or vacation home, which are very much in demand too. Many of these small towns have neither the staff nor the understanding to plan for a more balanced housing inventory, let alone the expertise to be "on top of" available programs and/or funds


20
for their use. These conditions create the atmosphere that will be used to evaluate HUD's, FiQHA's, and all of the programs described here.
A. Federally Funded Programs
As was mentioned earlier, most of HUD's focus is on urban, distressed areas—and the more the urban and distressed, the better. Sources at the state Division of Housing and others stated flatly that HUD isn't interested in rural areas, and obstructs efforts to apply for funds there, which is very unfortunate considering that this agency is the primary federal resource of housing funds. HUD's focus is on extreme deed, by their own definition. The Small Cities Program division of the CDBG program criteria is an excellent examply of how the criteria do not apply to Colorado's situation. The federal regulations specifically state:
"The Small Cities Program is competitive in nature and the demand for funds far exceeds the amount available. . .
Eligible applicants selected for funding will be those communities having the greatest need as evidenced by poverty and substandard housing. . ." (Federal Register, Vol. 44,
No. 124, p. 27480) These kinds of extreme conditions do not usually exist in energy'boom towns or ski resort communities. Additionally, 50% of Small Cities funds go to small cities in urban areas, leaving only $3,487,000 available to rural small towns. Considering the housing need, that is precious little.


21
The Urban Development Action Grant funds are about the same in focus as Small Cities; only 25% of total UDAG funds are even available to smaller towns. Grants are made to towns who can demonstrate "ongoing results in providing low and moderate housing," in other words, have successfully applied for HUD funds before. Applicants must demonstrate "physical and economic distress," including the age of housing stock, per capita income, population outmigration. None of these conditions come anywhere near situations in Colorado small towns. In fact, as of 1978, only Denver and Pueblo were "certified" as eligible to even apply.
It is hard to believe that Denver, with her changing skyline and relative imperviousness to recession, could be considered physically and economically distressed, and towns like Craig and Rifle would not.
One program where Colorado small towns are taking / advantage of available federal monies is HUD's Section 8 rental subsidies. Even here, the program is highly slanted towards the urban poor. In the first half of 1978, of the new and rehabilitation housing starts, 13,353 of the 40,369, or 33% were in non-metro areas. It is important to note here that the new and rehabilitated units are only 29% of the total units, the remaining being existing units. The total number of non-metro units was 140,346, 21% of all units. Colorado and the rest of the mountain states use


22
the Section 8 funds almost exclusively for elderly housing, and as of April, 1978, 61% of the Section 8 housing units in Colorado were elderly housing. All of the 290 FmHA sponsored units in Colorado in 1978 were for elderly citizens. According to Rural America, the Section 8 monies are mostly urban in focus and when granted to rural areas, are almost exclusively for the elderly, and not nearly related in number to the relative shortage of housing.
(Rucker, pp. 2, 6, 10, 12) Of the towns queried for this report, those reporting any usage of programs at all stated that the program used was Section 8 housing for the elderly, which would support Rural America's research. The problem with this program is that it is not a construction, rehabilitation or purchase program—it must be used in combination with some other long term financing arrangement. These funds must be competed for from FmHA, CHFA and others. Units under contract for the subsidy must be managed, their residents screened, and HUD regulations met after construction. This is a very large and complex order for a small town to meet, which may be why in such towns as Telluride and Longmont, the citizens rejected proposals for subsidized housing.
Farmers Home Administration is an exclusively rural focused agency. All of their programs must be in rural areas by mandate from the Congress. Their home ownership program in Fiscal Year 1980 allocated $32 million for


23
Colorado, which is allocated on the basis of the percent of low income residents in an area. Many of Colorado's energy/ ski boom towns don't have a high percentage of low income residents, period. FmHA's Rural Rental Housing program in 1980 has a very small $7 million to offer to purchase, build or rehabilitate rental housing, a drop in the bucket when compared to the Colorado Division of Housing estimates which show as of January 1, 1977, 31,890 elderly renter,
17,350 elderly owner, 63,690 non-elderly rentor, and 19,010 non-elderly owner, lower income households exist in Colorado needing and eligible for housing assistance, and these numbers DO NOT inlude all one person, non-elderly rentor households. (Colorado Division of Housing, p. 7) FmHA is obviously very underfunded for the kinds of need they are trying to address, especially when you consider that all FmHA’s rental dollars go into Section 8 housing for the elderly.
FHA and VA are old housing finance standards. They are individual types of programs where the household applies and the loan is based upon the qualifications of the household. Both programs are utilized to their maximum for those who are eligible. What works against them is the increasingly high mortgage rates and the inflationary prices of the housing to be purchased. For instance, the average price of a home in Glenwood Springs is estimated to be around


24
$80,000 and very few individuals of low or moderate income can come anywhere near the down payment and monthly payments on a loan such as that, let alone qualify. FHA, and VA apply to the purchase of homes only, and cannot be considered as part of the solution of the rental picture.
This analysis reveals that the federal housing and community development programs come out as presumed at the onset—either out of sinq with the needs of Colorado, of so underfunded and/or urban slanted that they contribute very little to the solution. Among them, FmHA/Section 8 „
seems to be the best bet for small towns, if their problem is exclusively among the elderly. In most cases, it is not, it is low and moderate income singles and families, whose incomes cannot afford available housing.
Among the federal sources of aid, that leaves the two pieces of banking legislation. When contacted, the Federal Home Loan Bank Board said that the Community Re-Investment Act doesn't have any real teeth in it to coerce banks to comply, but that most banks are doing their share.
According to Mr. Wiske at the Board, the Act is designed more to encourage communication between citizens of a community and the lenders, so that needs are known, and is perhaps more appropriate to large cities than small towns.
In terms of actual dollars, then the CRA can't be relied upon in specific instances, but does provide an incentive


to a bank to comply, especially if the Board refuses permission for a new project, based upon a bank's past performance.
In terms of possibilities for real dollar help, the National Consumer Cooperative Bank Act seems more promising what this act relies on is the formation of a cooperative for housing. It does not state how many persons can compose a cooperative, and that could prove to be a problem if it is over ten or so. Forming a coop naturally presumes that the members are fairly stable members of the community—which would help the teachers, doctors, etc. of say an Aspen, but wouldn't help the seasonal employees, unless a housing cooperative could be built and then rented. Overall, a housing cooperative as described by the Act seems an excellent possibility for moderate income, permanent residents of a community. Conceivably in the development approval process in a town, extra points or density could be allowed cooperatives that serve low and moderate income residents. The only problem that appears then is if the bank assumes that because other housing can be provided, that the cooperative is not filling an unanswered need. Nonetheless, a housing cooperative seems a valid alternative to providing low and moderate income housing.
B. State of Colorado Programs
The Colorado state programs fare much better than the


26
standard federal programs with regard to their relevance to the state's needs. The State Division of Housing's Grants work well, if a community already has a project going and needs a bit more money. Since there is no "front end" money, planning and development funds for a program, and probably most of it, must come from other sources. Again, the requirement of "absolute need" as compared with other locations, can create the kind of competition, where very needy communities just can't win. The Division of Housing prefers grants to innovative projects, which may help a great deal—in the future, but may reject traditional approaches, also needed by some towns.
Two of the most promising and responsive programs, at least for those towns hit by the energy boom, are administered by the State Department of Local Affairs, and these are developed as specific responses to the tremendous problems presented by oil shale development and the rise in uranium, gold, silver, etc., mining on the Western Slope.
The Oil Shale Trust Fund and Energy Mineral Severance Taxes have a tremendous amount of money which can be applied for. (Some $70 million) The local planning and participation is one of the best features of these programs, and the prioritizing at the county level will help in non-duplication and coordination efforts. This local planning also provided the opportunity for towns to design programs unique to their


27
needs. The real importance of these programs is in their specific focus on the problems of energy impacted areas, one of the few programs tailored to a present and growing need in Colorado.
The third program that the Department of Local Affairs is involved with is a different story. The FmHA "601" funds, in which Local Affairs only advises, but is still considered to be energy impact funds, can only be used for obtaining land, and not for construction. What can and does happen is that land is obtained, and construction funds are not available. The Division of Housing mentioned that this lack of coordination has stopped several projects, or at least delayed them. These funds are only available if a community can't get a loan elsewhere in a "timely manner," which suggests more of a desperation source than a solid, planned for one. There are some $3-4 million available, and the principle of lessening the price of land would certainly be an excellent method to lower the developer's cost, and thus the price to the eventual owners or rentors. This program would have to be coordinated closely with the accumulation of funds for construction, or would be useless.
These state funded programs are definitely an improvement over the federal ones in many cases. The Division of Housing is funding innovation in approach, and filling in financial gaps, as well as acting as the lead agency for


28
HUD and FmHA dollars. The energy impact monies hit hard at problems in energy impacted towns by providing grants for individually tailored programs. Trouble is with especially Division of Housing—underfunding. Energy impact monies can't be spent in any other place and removes them as source of help for recreation impacted areas. Nonetheless, state programs address many of the needs of Colorado's small towns in an effective manner.
C. Other Sources of Monies and Aid
Lastly are the three agencies that are not state or federally funded. Colorado Housing Finance Authority is one of the most promising. Through their Single Family Mortgage Program, they are working on a one-by-one basis to get people housed by lowering the cost of borrowed money. This, of course, does not lower the prices of the homes, many of which are beyond the reach of all but the rich. CHFA's Multi-Family Rental Program has built 12 new developments in 1979 totalling 742 units, which is very impressive. CHFA is ties to HUD's Section 8 appropriations, which slows them down, as could the condition of the bond market which provides the money to finance the construction or rehabilitation of these units. The bond market is pretty tight now, which is curtailing their efforts to get units built. All in all, CHFA is a flexible kind of an agency, less tied to urban/rural advocacies, and very well tied


29
and sympathetic to the idiosyncracies of housing in Colorado.
Rural America, as a source of funds is pretty questionable. The million dollar revolving loan fund has no eligibility criteria applied to it yet. However, Rural America is one organization whose specific charge is to give rural areas and small towns a stronger voice in Washington. They have lobbyists watching legislation and regulation. They are on top of funds and sources and provide that information to their membership and others via newsletters and publications, which are extremely specific and helpful. They are an agency to watch because, once in the funding business, they could provide much valuable help to small towns.
Lastly is Colorado Housing Incorporated, whose services are mostly technical and not financial. One of the most consistently observed problems in rural Colorado, which surfaced as well at the State Housing Conference, was that towns are ill prepared to handle their problems: they have no housing inventories, no housing element in their comprehensive plan, if they even have a comprehensive plan, and have no idea where or how to get help. CHI provides exactly those kinds of assistance and directs a town to the program most likely to help them. Unfortunately, CHI cannot be everywhere, nor help everyone, and that is where they come up short, because the demand for their services


30
far out strips their ability to provide.
Where then do all of these alternatives leave the small towns? For several small towns, it has meant that they would rather develop their own strategies and rely’ on their own resources to resolve the housing shortages. There are at least three towns in Colorado who have taken some unique steps to create more low and moderate income housing and can serve as an example to other towns.


31
IV. SOME INNOVATIONS
A. Breckenridge
The American Institute of Planners conferred one of its 1978 planning awards to the Breckenridge Development Code, which differs substantially from commonly used subdivision and zoning regulations by not only eliminating uses-by-right, but also by assuring developers of a precise time frame for review of a proposed project and approval or disapproval. Kirk Wickersham's basic philosophy in helping to create this code was that "substantive controls can be as rigorous and comprehensive as any community would reasonably wish without serious protest from development interests, so long as the decision-making process is quick, cheap, straightforward, fair and predictable." (Rubin, p. 1) Breckenridge is a recreation-impacted town whose chief resource is their ski area, which opened in 1961. As their town grew, the frustrations7between what was being built and the needs of the town caused town officials to order a consultant to develop data, policy and impact analysis techniques for all growth factors of concern to the community. Each neighborhood was considered, and policy statements extracted from neighborhood research. The end result was to implement a points system of approving developments that takes no more than a given number of days based upon the dollar value of the proposed development. There are


32
"absolute policies," with which a developer roust comply, and "relative policies" which are given points based upon their importance, and compliance to these policies. The final "score," which ranges from -2 to +2, determines whether the plan will be approved or not. Scores over 0 can be awarded extra density allowances. Thus, Breckenridge is enticing developers to consider such relative polices as open space, scenic values, placement of structures, and development of employee or low/moderate income housing units.
The plan has a great deal of potential. According to Diane McGrath, in Breckenridge, the town is making every effort to encourage the development of low and moderate income housing. The Development Code has been altered to provide this encouragement by increasing the "allocation points" possible for employee housing. However, only one project is being developed now, and the future is holding only possibilities, not realities. This suggests that although the approval process has been streamlined and its cost to the developer lessened, and points are awarded for the development of employee housing—this is not enough enticement to developers to build low and moderate priced employee type housing. A voluntary type approach doesn't appear to have the strength to produce the needed housing.
B. Boulder
In May of 1980, the city of Boulder passed a truly


33
innovative ordinance which protects moderate income residents from the rapidly rising housing prices there.
Ordinance 4495 created the Moderate Income Sales Program, which insures that "dwelling units committed for low and moderate income sales under the Growth Control Ordinance and Resolution 115 shall be maintained in the low and moderate income housing stock of the City for a period of at least 15 years" (City Council of Boulder, May, 1980). Moderate income housing units must comprise 15% of new development by contract with the city, and the new ordinance then adds that not only are those units originally sold at moderate prices, but they must be sold at moderate prices for 15 years, which applies to all owners for 15 years each. If a seller cannot sell at the moderate price in six months, then the owner must allow the Boulder Housing Authority to buy the house, if the Authority desires to.
Only if the city doesn't want to buy the house can it be sold on the open market at the prevailing price.
This approach speaks to several issues. First, it commits a city already committed to very limited growth (450 building permits per year), to also provide a range of housing prices and availabilities. Implicit in this commitment is the recognition that the "free market" does not provide for this kind of housing when allowed to operate on a solely "profit motivated basis." Second, it is a


34
compromise, so that developers can use their remaining 85% of a proposed development to price as the market will bear, and so that the seller has an out if he/she cannot sell that dwelling at a later time. This kind of set aside will not rapidly build up a stock of moderate housing, but it is an excellent example of what a town can do utilizing their own legal structure and resources to add to and then preserve a supply of housing in a given price range.
C. Aspen
Aspen has a very comprehensive approach to their housing shortage. The Housing Task Force was created to study the problem and make recommendations. Their Housing Action Plan best states the position they did not want to find themselves in: "Community cohesiveness is threatened if the growing section of professional, management and longterm personnel cannot find affordable and adequate housing on a more permanent basis. The economic base of the resort
I
is seriously undermined if employees of all income levels are being displaced, or if newly arrived, forced to seek housing twenty or more miles away." (Aspen/Pitkin County Housing Task Force, 1980)
The resulting proposal for actions to be taken has three elements. The first element was the passage of housing guidelines, where three classes of housing rental


35
and purchase prices were set by law and to be evaluated on a yearly basis. The second element is a Housing Action Plan (HAP) the direct report of the Task Force. In the HAP, the Task Force lists three separate parts which make up a balanced and successful plan: production of units, promotion of better utilization of existing units and reduction of demand. For each of these parts there would be three types of responsibilities that together accomplish the aim of the part: legislative, administrative and private sector.
For example, under the "production of units" part, legislative responsibilities would be development of "caretaker units" to add additional units to the development, and development of a cooperative housing effort for Snowmass, Aspen and Pitkin counties. In this way, each of the necessary parts for creating enough housing would be then divided in responsibility between the legislators, administrators and the private sector. The third element in Aspen's housing program is the passage of two pieces of legislation to promote the development of low and moderate housing. The first was the 70:30 ordinance which exempts housing projects from the growth management plan (GMP) rules if 70% of the deeds are restricted. The second piece of legislation was the Additional Dwelling Unit Ordinance which promotes the development of bonafide low, moderate and middle income housing units free of speculative investment influences,


36
by increasing the density allowed in certain specific areas of the town if one half of the units built are deed restricted.
All in all, Aspen has put together a very complex and thorough program that addresses very strongly the need for housing in their area. Because these are new ordinances, though, there are no results to be studied. However, there are several key items in the program that point to its probable success. First of all, the HAP was developed by a task force representative of the community, a proven planning tool that adds credence and support to the plan. Secondly, the importance placed on the usage of private sector resources means that not only public resources are expended, but that the private sector is responsible to help resolve Aspen's housing shortages, which they in part create. Third, the legal and documented restriction on prices allow no vacillation; low, moderate and middle income housing is defined by law, which eliminates the possiblity of misinterpretation. However, when each of these price ranges were applied to a 672 square foot one bedroom townhouse purchased in Denver in 1979, and found that the rental on that unit would be $282 - low income, $369 - moderate income, and $457 - for middle income—very much on the high side for a rentor, which points quite clearly tto the higher incomes influencing an Aspen average. The real value of Aspen's program is its "bottom up" development, its in-


37
volvement of private and public sector resources, and its utilization of all resources at hand. It is an excellent example of classic planning/community development theory in action. The shortcomings of this approach are its idealism—Aspen is an "enlightened" and fairly liberal and involved community—and its relative time and cost. This is a very time-consuming and costly (both in terms of actual dollars spent, and staff hours) process. Small towns in a big crunch may not have the time or money to apply this methodical of an approach.


38
V. A PLANNING APPROACH TO PROVIDING LOW AND MODERATE INCOME HOUSING
The shortage of affordable housing is becoming a national crisis testified to by Governor Lamm at Colorado's housing conference, by Jay Janis, Chairman of the Federal Home Bank Board at the 88th annual convention of the United States League of Savings Associations, and by a government appointed commission in a new HUD sponsored report. Individuals at all income levels are being affected, and no community is exempt from the pressure. In spite of some tremendous pressures to act and build or buy right now, the best approach is still the lower, community based planning approach.
First and foremost must be an awareness of the problem. The fact that some communities cannot lure seasonal help, that management level residents must commute several miles each day to work, that homes for sale begin in price at $75,000—all must be construed as dangerous for the economic health of a community, and a decided problem. Inherent in this awareness that a laissez faire attitude will only permit the problem to increase, and, as the Aspen HAP declares, threaten community cohesiveness and seriously undermine the local economic base. Some effective methods to build awareness would be through the media, discussions in town meetings and in neighborhood meetings.


39
Once an awareness of the problem is achieved, the next step would be for a town to commit itself to including a variety of prices and levels of housing, and to put this commitment in writing in the form of a town policy and/or ordinance, such as Boulder has done. The best possible way would be to codify and define in price per square foot, as Aspen did, specifying the meaning of "low and moderate" income housing.
The beginning of a housing plan would be to inventory the current housing stock. An inventory of current stock is crucial to any approach a town would want to take, including no approach. An inventory of such qualities as standard, sub-standard and rental prices and purchase prices would provide a community with a foundation for whatever action the community wants to take. Along with the housing stock inventory, one should be taken of land allocated and not currently being used for housing in either the town's or the county's plan. If no such plan exists, an inventory of land usable and suitable for housing could be done.
Next, a town must consider what direction they wish their town to take. There are some things that cannot be prevented, such as a degree of growth, and some things that cannot occur in small towns, such as a total absence of low and moderate income housing. This picture of the town's


40
future need be drawn with the help of citizens of all incomes and occupations, and need be in writing as well in order to implement it. Provisions need be made for change and evaluation and response to changing conditions.
The town then has a current inventory and a future picture. The next step is to decide upon what to do to get from the current situation to the future goal—what needs must be satisfied if that picture is to become a reality. This needs assessment must be specific in order to determine how these needs will be met. Some of the specifics should be the types and prices of housing needed, the number of units needed, what kinds of facilities need be developed to service them and where all of this will be located.
The "rules" for that development, zoning, PUD, etc. are developed from this plan. The flexible points awarded system developed by Breckenridge is an excellent example of how the "rules" can work in both the town's and developer’s best interests.
It is at this point that all of the available services and programs can be considered as the means to the ends desired. Towns with a large number of elderly should consider the FmHA sponsored Section 8 units. Those with a large number of seasonal workers could consider employee housing programs provided by developers and new businesses. Energy impacted towns could use energy impact monies to provide


41
land or housing for thier new residents. The point being that by being specific in its needs, the town can then select a program from the government or design one of their own, but in neither case can they succeed without knowing exactly what is needed. Both federal and state programs require this kind of preparation prior to application.
Having come this far, the town should enlist the help of two sets of residents—the private sector business people, and the bankers, both of whom benefit from increased local business, but often don't take part in resolving the resulting housing shortages. It must become part of doing business in a town to consider the effect of that business on housing. Banks should be encouraged to honor their obligations under the Community Re-Investment Act, and these efforts tied into the housing plan. If voluntary types of programs fail to entice private sector businesses to provide low and moderate housing, then such legislation as that passed by Boulder must be considered by the town.
Now the town has a plan, some needs to be met and the cooperation of the private sector and the banks. At this point a town can decide to provide the housing from its own resources as Aspen is doing, or apply for outside funds.
The method which gives the town the most control would be


to use its own resources, but few towns have the kinds of staffs and monies available as in Aspen or Vail. The next best approach is to analyze the needs to be met and select the federal or state program that best suits them—not tailor a project to meet program needs, and have an alternative source in mind if the first one fails. The best of the programs analyzed in this paper are Colorado State Division of Housing Grants, CHFA rental and purchase programs,
State Energy Impact monies and Section 8 subsidies with FmHA funding. These programs have the best potentials for responding to needs in Colorado. Small towns should be members of Rural America to increase their awareness and understanding of available programs, and make use of Colorado Housing Incorporated to help with inventories, plans, etc.
To summarize, the steps recommended in a planning approach to providing low and moderate income housing would be:
- To develop an awareness of the shortage and its impact on the community
- To make a commitment to including a variety of prices and types of housing in the community
- To inventory current housing stock and lands available
for housing


43
- To develop a future goal for the town and priorities for its development
- To decide on what needs must be met to get from the current situation to the future goal—being very specific
- To obtain the cooperation of the private sector and local banks
- To decide if local resources can meet the needs developed
- If not, to decide which federal or state program can meet these needs, and have an alternate choice.
In formulating this plan, several of the elements were described to different housing experts, and the plan was also molded by the information given at the Colorado Housing Conference. The major criticism of this approach was that reality does not often provide for the idealism in the approach. Many towns aren't willing to consider having low income housing in their towns because they believe that such projects entice unwanted elements into their towns. There is a very real lack of understanding of housing as a need and the various programs available to help provide it, which impacts on the awareness phase. In an interview with John Maldonado, Director of the Division of Housing, he stressed the complexity and political nature of housing which can pit special interests against each other, and


that big money interests can unduly influence the development process. He feels as well that local people are not often aware of the future consequences and costs of providing housing.
All of this is fair criticism. The planning approach is a long frustrating process that at best comes up with a compromise. The method and features of this plan, though, were largely upheld by those interviewed and those attending the Conference. The elements most completely supported are knowing the parameters of the local problem, and tailoring the solution to fit, with the full participation of the community, the private sector and the banks. Admittedly, some of these are currently lacking now, but not because it wouldn't work, more because towns lack local expertise to help understand and implement.


45
VI. CONCLUSIONS
Every method of approach when implemented, must be adjusted to a town's specific situation, and in this case, while similar in several respects, energy impacted towns and recreation impacted towns are very different in the specifics of their problems. Recreation impacted towns are often single season/economy towns whose housing is expensive because of the demand of vacationers and second home owners as a function of their high income. The developer makes more money building for high income residents and the town gets more money by taxing them, both of which are pretty difficult pressures to counter. The town must then focus on protecting the middle income and low income workers from these market pressures, Boulder’s approach does this well. By contract with the city, the developer must allocate a certain percentage of units to moderate income pricing, and these units must remain at that price level for 15 years per owner. A second approach is to require new and expanding businesses to provide the needed housing as a cost of business. Recreation impacted towns must expand their existing low and moderate income housing and then protect these housing units from market pressures, making the first a responsibility of private business, and the second a responsibility of town adminis-
trators supported by law.


The energy impacted towns are different in practice. Their housing shortage is more absolute because their populations will grow at rates unheard of since the industrial revolution brought millions of peasants into the slums of the cities. These towns are faced with housing people, and fast. The current solution has been to provide mobile homes jammed in small, treeless parks that look much like barracks. The towns have better options. Monies can be used to acquire lands or plan to have lands developed for mobile homes in parks that are aesthetic and pleasant places to live. Towns must face the fact that mobile homes are currently their only source of quick housing, that parks for mobile homes do not have to be eyesores, and plan for them. Additionally, developers of modular unit housing could be encouraged to develop properties as well, it is possible to get Department of Housing monies for such innovative projects. The crucial factors to these towns in the absolute absence of housing and the need to build it—fast.
Of all the conclusions to be made from this research, the strongest is that providing low and moderate income housing, because housing touches everyone's life in different and sometimes opposing ways, is a very complicated issue, with no set of given parameters, and no easy solutions. What is certain is that providing housing is not a solely financial issue, that politics and basic human


47
values play large roles. However, the costs and dollar values are the core of the problem and become more often than not, the true basis for action, which means if that housing is to be provided, these costs must be mediated.
It is certain that inflation and the high cost of money will make the job tougher in the future and mandate better cooperation between town residents and their banks, and also mandate a larger role and greater responsibilities for the private sector.
The state's role could be expanded to include such responsibilities as getting attention paid to the problems suffered by Colorado's small towns, providing grants and aid for research and development of modular and other forms of "quick" housing, and perhaps working with local governments to encourage standards of development review which would decrease the time and cost of the review. City administrators and planners must reduce project approval time and its uncertainty which raises a developer's cost, but without sacrificing quality. Breckenridge has done that. Additionally, information must be provided to towns experiencing shortages as to what programs are available and what their eligibility criteria are. Perhaps another role for the state would be to help towns to acquire the expertise and monies to provide housing. It remains a fact that providing low and moderate income housing in energy or


/
48
recreation impacted small towns in Colorado is a costly and complicated task that must be undertaken by the towns the best way they can, with whatever help they can obtain.


APPENDIX I
Programs Summary


APPENDIX I
Programs Summary
ADMINISTERING
AGENCY
A. Federally
Housing & Urban Development
TITLE OF NATURE OF PROGRAM THE PROGRAM
ELIGIBILITY
CRITERIA
TOTAL
MONIES
AVAILABLE
Funded Programs
l)Small l)There are two types of
Cities grants: "single purpose,"
Program - one year grants to meet a (Part of specific need in areas of Community housing, deficiencies in Develop- public facilities or econo-ment Bloc mic conditions; "comprehen-Grants) sive" one to three year program which addresses need in defined areas which bear a relationship to each other and are carved out in a coordinated manner.
Grants are given to: l)Units FY 1978 of government with 50,000 or $1,649,396 less residents.
2)HUD considers the extent to which the proposed program benefits low and moderate income persons, and;
4) the impact of the program on problems idenfied by the applicant.
5) The most needy get higher priorities-competition is fierce.
6) Applicants must show citizen participation in planning, implementation, and assessment of the program, especially among low and moderate income persons.
7) The applicant must have the capacity to undertake the proposed program.
8) The program must benefit principally low and moderate income persons.
MONIES AVAILABLE IN COLORADO
16 programs $16,123.00
Region VIII 1980, $3.3mil-lion
Single purpose grant maximum: $375,000
Comprehensive grant maximum; $875,000


Sc TOTAL MONIES
ADMINISTERING TITLE OF NATURE OF ELIGIBILITY MONIES AVAILABLE
AGENCY PROGRAM THE PROGRAM CRITERIA AVAILABLE IN COLORADO
Housing & Urban Development 2)Urban Develop- ment Action Grants (UDAG) Grants to assist "severely distressed" cities and urban counties to revitalize local economies and reclaim deteriorated neighborhoods, through a combination of private and public investments . 1) The private sector's financial commitment must be secured prior to application. 2) Applicants must demonstrate ongoing results in providing low and moderate income housing; and providing equal opportunity in housing and 1) 25% allocated for small cities of 50,000 or less 2) $400 million FY 1978 FY 1978 4 programs $15,129.00 only Denver and Pueblo certified so far
employment.
3) Applicants must demonstrate physical and economic distress, including age of housing stock, per capita income, population outmigration, unemployment and job lag - must get HUD approval prior to applying.
4) The funding is based on a reasonable balance of resident, commercial and industrial projects.
5) Grants based on the degree of "physical and economic distress."
Housing & Urban Development
3)Low income Rent Subsidy (Sec. 8)
HUD provides rent subsidies l)Rentors incomes cannot for low income families exceed $10,979.
where the family pays 25% 2)Rents must fall in fair
only of their adjusted income market range determined by and HUD pays the difference HUD.
between that and the market 3)Local authority must be rate. authorized to receive funds.
As of FY 1977, 169,396 units with 161,581 more units reserved for federal subsidy.


ADMINISTERING AGENCY TITLE OF PROGRAM NATURE OF THE PROGRAM ELIGIBILITY CRITERIA TOTAL MONIES MONIES AVAILABLE AVAILABLE IN COLORADO
Housing & Urban Development 4)Low income Leased Public Housing HUD pays an annual contribution for local agencies to lease private housing to rent-to low income families. Same as above As of December 31,1975 163,297 units.
Housing & Urban Development 5)Home ownership for Low and Moderate Income Families Mortgage insurance is provided to commercial lenders against loss on loans to finance the purchase, construction or rehabilitation of low-cost family housing. 1) The maximum insurable loans are $31,000 ($36,000 in high cost areas). 2) Anyone may apply; displaced households qualify for special terms. Cumulative through September, 1977 837,092 units for over $11 billion*
Housing & Urban Development 6)1-4 Families Home Mortgage Insurance HUD insures commercial lenders against loss on loans for up to 97% of the property value, for up to 30 years, in urban and rural areas. Any person able to make the cash investment and mortgage payments. Cumulative through September, 1977 10,212,194 units with value of $125 billion.
Housing & Urban Development 7)Home-ownership Assistance for Low and Mod- HUD insures mortgages and makes monthly payments to lenders to reduce interest as low as 4%. 1) The homeowner must contribute 20% adjusted income and make a down payment of 3%. 2) The adjusted income must not exceed certain percentage Cumulative through September, 1977 478,553 loans at $8.6 billion.
erate In- of local median income,
come
Families


ADMINISTERING TITLE OF NATURE OF
AGENCY PROGRAM THE PROGRAM
Housing & 8)Multi-
Urban De- family
velopment Rentan Housing for Low and Moderate Income Families
HUD provides mortgage insurance to help finance construction rehabil itation of multi-family rental and cooperative housing.
Housing & 9)Existing HUD insures mortgages to
Urban-pe- Multi- purchase or refinance exist-
velopment family ing multi-family projects.
Rental Housing
Housing & Urban Development
10)Multi-family Rental Housing
HUD insures mortgages made by private lending institutions to finance construction or rehabilitation by private or public developers.
ELIGIBILITY
CRITERIA
1) Sec. 221d3: HUD insures 100% of the total cost.
2) Sec. 221d4: HUD insures 90% of its limited to profit motivated sponsors.
3) Mortgage amounts are controlled by statutory dollar limits per unit to insure moderate construction costs.
TOTAL MONIES
MONIES AVAILABLE
AVAILABLE IN COLORADO
Through
June, 1977 221d3 132,858 units over $1 billion 221d4 281,731 units
over $4 billion.
1) Investors, builders or developers who meet HUD regulations are eligible.
2) The project must have at least 8 units and be 3 years old.
Through June, 1977 112 projects valued at $307,719,380
1) The project must contain at least 8 units.
2) The project should be able to accomodate families at "reasonable rents."
3) Investors, builders or developers, etc., who meet HUD requirements apply to FHA approved institutions.
4) Projects must be in a HUD approved area showing a need for such housing.
Through June, 1977 2614 projects 282,782 units at value $3.89 billion.


TOTAL MONIES
ADMINISTERING AGENCY TITLE OF PROGRAM NATURE OF THE PROGRAM ELIGIBILITY CRITERIA MONIES AVAILABLE AVAILABLE IN COLORADO
Housing & Urban Development ll)Condo- minium Housing HUD insures mortgages to private lending institutions for the purchase of individual units. 1) Profit or non-profit sponsors are eligible to apply. 2) Any "credit worthy" person may apply. Through June, 1977 617 projects with 35,760 units valued at $330,645,306
Housing & Urban Development 12)Mobile Homes HUD insures mobile home loans by private lending institutions. Any person able to make the cash investment and the mortgage payments. Through January, 1977 over 60,000 loans valued at $580.00 million
Federal Housing Authority (FHA) Mortgage Insurance Mortgage lenders are insured against loss in financing first mortgages on single family homes and multi-family projects. Varies by specific program. Most families are eligible. FY 80 $2,356,267,000
Farmers Home Administration (FmHA)
l)Home
Ownership
Program
Home ownership loans are offered to help families with low and moderate incomes up to 100% of the FmHA appraised value, in "open country and places with populations of 10,000 or less, not associated with urban areas." (Loans may be made in towns with populations of 10,000-20,000 if the Secretaries of Agriculture and HUD find there is a lack of mortgage credit).
1) The families must be without decent, safe and sanitary housing.
2) The family must be unable to obtain a loan from a private lender.
3) The family must have sufficient income to make payments, insurance premiums, taxes and maintenance.
4) The income after deducting 5% and $300 per child cannot exceed $15,600.00
I-Y 1980 $32,000,000
Allocated on basis of percentage low income


ADMINISTERING
AGENCY
Farmers Home
Administration
(FmHA)
Veteran's
Administration
(VA)
Veteran's
Administration
(VA)
TITLE OF NATURE OF
PROGRAM THE PROGRAM
2)Rural
Rental
Housing
Loans made to build, purchase or repair apartment-style housing for persons with low and moderate income and those 62 or over in open country and areas to 20,000. This program often combines with HUD Rental Subsidy (Sec.8) programs.
l)Direct The VA provides direct
Loans housing credit assistance
to veterans, service personnel, etc., who live in small towns and rural areas, up to 33,000.
2)Guaran- Loans are guaranteed to 60% teed and of the total by the VA. Insured
ELIGIBILITY
CRITERIA
TOTAL
MONIES
AVAILABLE
MONIES
AVAILABLE
IN COLORADO
1) Family income cannot exceed $11,200.
2) Borrowers should have the ability and experience to operate and manage a rental housing project.
3) Loans made to individual, trusts, associations, partnerships, state, local public agencies consumer cooperatives profit and non-profit corporations.
4) When the financial position of the borrower reaches the point when he can repay or refinance through a commercial lender, he must do so.
$7,000,000 290 units approved Sec. 8 subsidy through April 1978
Veterans, unremarried widows, Estimated certain serviceman are eligible, appropriation
for FY 1979 $66,642,000
Veterans, unremarried widows, Estimated certain serviceman are eligible, appropriation
for FY 1979 $15,992.00


ADMINISTERING AGENCY TITLE OF PROGRAM NATURE OF THE PROGRAM
Federal Home Loan Bank Board Community Reinvestment Act (CRA) Financial institutions have "a continuing and affirmative obligation" to help meet credit needs of their local communities as stated by CR Act of 1977 (CD 1977, Title VIII).
Secretary of the Treasury
National Provide loans to establish Consumer consumer cooperatives. Cooperative Banking Act -1978
TOTAL
ELIGIBILITY MONIES
CRITERIA AVAILABLE
1) Banks must write a CRA statement delineating the "local" community and establishing the uses of credit available.
2) Banks are accountable when audited to ascertain and to meet community credit needs especially in areas of low and moderate income housing.
3) Community involvement in this process is important.
MONIES
AVAILABLE
IN COLORADO
1) Impact of cooperative in existing small business.
2) 35% loans made to low income serving cooperatives.
3) Made only if purposes of loan not being met in the community.
4) Must be chartered, non-profit cooperative, paying dividends within limits established by the bank.
5) Allocate net savings to members.
6) Cooperative must be non-discriminatory in its membership.
1978:
$500 million $75 for technical assistance


ADMINISTERING TITLE OF NATURE OF
AGENCY PROGRAM THE PROGRAM
B. State of Colorado Funded Programs
Colorado
State
Division of Housing (DOH)
State
Housing
Develop-
ment
Grants
Grants are provided for the rehabilitation, construction or acquisition of modest rental and owner occupied housing for low income persons and households .
Colorado Department of Local Affairs (energy impact monies) l)0il Shale Trust Fund
Colorado 2)Energy
Department Mineral
of Local Severance
Affairs Taxes
(energy im-
pact monies)
Monies returned to Colorado from oil leases controlled by the Joint Budget Committee
Providing funding to energy impacted communities for locally needed projects
TOTAL MONIES
ELIGIBILITY MONIES AVAILABLE
CRITERIA AVAILABLE IN COLORADO
1) Grants are based on the absolute need of the household, their income level.
2) Grants are equally matched from outside sources and that grant can't include planning or administrative costs.
3) Grants are made to public entities and private, tax exempt, non-profit corporations .
4) D0H encourages innovation in programs.
1) Small grants -$100,000 is the largest.
2) $2,000,000 appropriated in 1980 - 1000 units and 3,000 low income peopl 3)50/50 rural/ urban split
1) Projects are requested by N/A $63 million
communities, prioritized at
the local level - COG
2) Funds appropriated by legislature in one package each year
1) Must be an energy impacted FY 80 $6 million
community FY 81 $9 million
2) A local government agency must sponsor the project
3) Must benefit public at large
4) Goes through an advisory committee and decided by director of Department of Local Affairs


ADMINISTERING
AGENCY
TITLE OF NATURE OF
PROGRAM THE PROGRAM
Colorado 23"601" Loans made to acquire
Department Funds land for projects,
of Local Affairs (energy impact monies)
(with FmHa)
C. Additional Sources of Funds and Aid
Colorado Housing Finance Authori ty
(CHFA)
1)Single Family Mortgage Program
Through the sale of tax exempt bonds, CHFA provides funds, through private lenders, for moderate income single family mortgages.
Colorado
Housing
Finance
Authority
(CHFA)
2)Multi-
Family
Rental
Program
CHFA provides construction and permanent mortgage financing for the rehabilitation or construction of apartment dwellings for low income persons which are HUD
ELIGIBILITY
CRITERIA
TOTAL
MONIES
AVAILABLE
MONIES
AVAILABLE
IN COLORADO
Community cannot get money $20 million $3-4 million
from another source in a "timely manner"
1) The adjusted income cannot N/A exceed $18,500.
2) The applicant must occupy the home as their principle residence; and
3) can own no other property; and
4) can have no more than $6,000 in liquid assets after closing.
5) Applications cam only go through participating lenders.
To date $180 million 5,600 people became home-owners
1) At least 20% must be HUD Sec. 8 qualified.
2) Applicants can be individuals, groups or public entities.
1979: 12 new
developments, total 742 units
$121 million in construction
and nPTmanpnt


ADMINISTERING
AGENCY
Rural
America
Colorado Housing, Inc.
TITLE OF NATURE OF
PROGRAM THE PROGRAM
Revolving
Loan
Fund
Provide funds to rural communities to develop rural housing projects.
Provide technical assistance to towns wanting to apply for funds - provided with no charge.
ELIGIBILITY
CRITERIA
Not set yet
TOTAL
MONIES
AVAILABLE
$1,000,000
ljHave a sincere need. N/A
2) Show community based support.
3) Write a letter of agreement defining services needed.
MONIES
AVAILABLE
IN COLORADO
As much as can be provided


APPENDIX II
Letter Sent to Towns


APPENDIX II - Letter Sent to Towns
I am a graduate student in Urban and Regional Planning at the University of Colorado-Denver, and I am researching low and moderate income housing in Colorado small towns as an independent study this summer.
I have already obtained a great deal of information on the standard federal and state programs, and I am now looking for information on the actual usage and success of these programs here in Colorado. Even more, I am looking for the details and successes of those programs and approaches developed by towns themselves.
Would you please send to me any information you have on your current housing situation to include which state and/or federal programs you are using now, and your successes with them? If you have developed your own policies and programs, would you send to me the details of those? What problems are you facing in providing housing to your residents, and how much cooperation are you receiving from the private sector?
Any additional housing information you have or anyone else you can recommend that I contact, would also be greatly appreciated.
Thank you very much.
Sincerely,
Linda S. Rubin


APPENDIX III
Towns Receiving the Original Letter Other Agencies Solicited


APPENDIX III
Towns Receiving the Original Letter
Aspen Vail
Basalt Minturn
Craig Ouray
Breckenridge Silverton
Estes Park Telluride
Fraser Idaho Springs
Georgetown Crested Butte
Glenwood Springs Steamboat Springs
Other Agencies Solicited
San Juan Regional Commission
Grand County Department of Development
Longmont Housing Authority
Planning Department Placer County, California
\
Colorado West Area Council of Governments
Northwest Colorado Council of Governments


APPENDIX IV
Responses of Towns, COGs and Counties


APPENDIX IV - Responses of Towns, COGs and Counties
Questions Asked Towns Existence of a Shortage in Low And Moderate Income Housing? What Kind of Pressure is Being Exerted? What Programs Being Used? Housing Element In Plan? Is There a Regional or County Housing Authority?
Glenwood Springs Yes - average home price $80,000 -Mobile homes being used Energy impact Sec. 8 -elderly No County authority to be developed
Telluride Yes Recreation impact Sec. 8 voted out -Too high density - industrial revenue bonds - deed restricted employee housing proposed No No
Silverton No Recreation impact - No

Estes Park Not clear from their response Recreation impact No - housing is provided by the private sector


Questions Asked Towns Existence of a Shortage in Low And Moderate Income Housing? What Kind of Pressure is Being Exerted? What Programs Being Used? Housing Element In Plan? Is There a Regional or. County Housing Authority?
Fraser Yes Recreation impact - land costs None - private sector supplying - County (Grand) doing Sec. 8 -elderly Proposed Grand County Housing Authority - FmHA Sec. 8 - Rehabilitation of a school for senior housing - Sec. 8 - Energy impact housing
Longmont Yes Pressure from nearby Boulder None - passed ordinance prohibiting subsidized housing Has housing authority
Aspen Yes Recreation impact Individualized: Housing Action Plan Have a housing plan Tied in with Pitkin County in all their planning
Breckenridge Yes Recreation impact None Development code to provide low and moderate income housing incentives
Colorado West Area COG Yes Energy impact Sec. 8 CHFA They are the regional housing authority
FmHA VA, FHA


BIBLIOGRAPHY


BIBLIOGRAPHY
Aspen/Pitkin Housing Task Force. "Action Plan Report,"
Aspen, Colorado, April 21, 1980.
City Council Of Aspen. Ordinance Number 16, Series 1980,
(additional dwelling units) passed June 24, 1980.
City Council of Aspen. Ordinance Number 20, Series 1980,
(70:30 Projects) (Draft for revision).
City Council of Aspen. Resolution Number 3, Series 1980,
(Housing Price Guidelines) adopted January 16, 1980.
City Council of Boulder. Ordinance 4495, passed May 6, 1980.
Code of Federal Regulations: (on) Banks & Banking, 12 CFR,
Parts 25 (Comptroller of the Currency), 228 (Federal Reserve System), and 563e (Federal Home Loan Bank Board), revised January 1, 1980.
Colorado Division of Housing. Colorado Households Needing and Qualifying for Housing Assistance, January, 1977 to January 1, 1982, March, 1978.
Colorado Division of Housing. "State Housing Development Grants Program Fiscal 1980-81" (Draft).
Colorado Housing Finance Authority. Investing in Colorado 1979 Annual Report.
Colorado State Legislature. Colorado Housing Act of 1970.
Cracraft, Jane. "Boulder Ordinance Seeks to Assure Moderate Housing, The Denver Post, May 22, 1980, pp. 33.
Cracraft, Jane. "Boulder OKs Strict Code on Home Resale,"
The Denver Post, May 23, 1980, pp. 1, 16.
Farmers Home Administration. "Home Ownership Loans," Program Aid #977, revised November, 1976.
Farmers Horae Administration. "Rural Rental Housing," Program Aid #1039, 1978.
Farmers Home Administration. "This is FMHA," Program Aid #973, revised January, 1975.


Information in three letters to the author from Gary Beardsworth, Assistant Town Planner, Telluride, July 7, 1980, July 18,
1980, and October 29, 1980.
Interview with Ann Kizzier, Federal Housing Administration,
July 15, 1980.
Interviews with Eugene Gonzales, Office Housing, United States Department of Housing and Urban Development, June 27, 1980 and November 24, 1980.
Interview with Jane Harrington, Colorado Housing Finance Authority, August 6, 1980.
Interview with Miles Silverman, Housing Planner, City of Boulder, June 16, 1980.
Interview with Nancy Smith, Community Re-Investment Officer,
Empire Savings and Loan, July 28, 1980, August 4, 1980.
Interview with P. M. Lobb, Farmers Home Administration,
June 26, 1980, August 11, 1980.
Interview with Susan Rocco, Public Professional Intern,
Colorado State Division of Housing, July 23, 1980.
Interview with John Babbs, Director, Colorado Housing, Inc., November 4, 1980.
Interview with Irma Facundo, S.W. Field Office Supervisor,
Rural America, November 17, 1980.
Interview with Arminta Fernandes, Rural America, November 17, 1980.
Interview with John Maldonado, Director, Colorado State Division of Housing, November 19, 1980.
Interview with Diane McGrath, Planning Specialist,
Breckenridge, Colorado, November 4, 1980.
Interview with Randy Russell, Impact Analyst, Colorado State Department of Local Affairs, November 10, 1980.
Interview with Mike Siegel, Energy Impact/Housing Specialist,
Colorado West Area Council of Governments, November 20, 1980.
Interview with Susan Sheerah, Housing Specialist, Colorado Housing, Inc., November 17, 1980.
Interview with Ray wiske, Federal Home Loan Bank Board,
November 6, 1980.


Federal Register, Vol. 44, No. 124, Department Housing and Urban Development, Community Development Bloc Grants;
Small Cities Program, revised July 12, 1979, pp. 37478-37489.
Federal Register, Vol. 44, No. 167, Part IV, Department
Housing and Urban Development, Community Development Bloc Grants, Interim Rule, August 27, 1979, pp. 50248-50274.
Gaeddert, Beth. "Housing Resale Profit Limit is Okayed,"
The Rocky Mountain News, May 22, 1980.
"Housing Aid Plan Vital to Industry," The Denver Post,
November 23, 1980, p. 12G.
Information in a letter to the author from Jolene Vrochota, Assistant Planner, Aspen/Pitkin Planning Office,
November 7, 1980.
Information in a letter to the author from Diane McGrath,
Planning Specialist, Town of Breckenridge, August 19, 1980.
Information in a letter to the author from Michael L. Siegel, Energy Impact/Housing Specialist, Colorado West Area Council of Governments, September 23, 1980.
Information in a letter to the author from the Planning Department (unsigned), Estes Park, July 18, 1980.
Information in a letter to the author from Frederick G. Fox A.I.C.P., Planning Consultant, Fraser, July 16, 1980.
Information in letters to the author from John N. Fernandez, Planning Director, Glenwood Springs, July 8, 1980 and July 30, 1980.
Information in a letter to the author from R. Howard Moody, Director, Grant County 1 epartment of Development and Planning, October 24, 1980.
Information in a letter to the author from Martha J. Baker, Acting Executive Director, Longmont Housing Authority, August 5, 1980.
Information in a letter to the author from Timothy G. Sarmo,
Town County Coordinator, Silverton-San Juan County,
July 15, 1980.


Northwest Council of Governments. Guide to Federal and State Housing Programs, Frisco, Colorado, 1980.
"Panel Urges Changes to Offset Housing Ills," The Denver Post, November 23, 1980. p. 14G.
Rubin, Linda S. "The Breckenridge Developmental Code,"
May 8, 1979.
Rucker, George, Research Director. The Geography of Section 8, Rural America, October, 1978.
Rural America. "Isn't it About Time Someone Spoke Up for Rural America?", March, 1980.
U.S. Code Congressional and Administrative News, 95th Congress, Second Session, 1978, pp. 1303-1350.
U.S. Code Congressional and Administrative News, 95th Congress, First Session, 1977, pp. 2994-2995.
U.S. Congress. Community Re-Investment Act of 1977
(Title VIII Housing and Community Development Act 1977), Public Law 95-128.
U.S. Department of Housing and Urban Development. "Fact Sheet: Small Cities Program." Denver Regional
Office, March, 1980 (mimeographed).
U.S. Department of Housing and Urban Development. "Programs of HUD," (HUD-214-4-PA (3)) November, 1978.
U.S. Department of Housing and Urban Development. Local
Housing Assistance Tools & Techniques - A Guidebook for Local Government, June, 1979.
U.S. Department of Housing and Urban Development. Housing for Low Income Families, (HUD-392-F (2)) June, 1976.


Full Text

PAGE 1

IClDRlA c : are occu Breck CDenver) Bargain b&Mment for 1-. 1800 IQ. ft., down to Mrthl price 1850. per month . Long term , first month free. Sunnys i de of main street, heart of buslnesa district , below the Dell end liquor store. Ideal lor health food store, convlence food store, restaurant, disco or no lob tennis court. Great business opportunity . Cllll or wrlta Box 630 Telluride. H2,9, 18,23P PAPER I 2 j J (1 ? 'Now, HERE is an exceptional single-family home in your price range.' . -_ .. _., _ _ . FOR SALE TRULY AN OUTSTANDI BUY in the Telluri de this 5 bedroom remodeled torian home, l ocated i n a fortable residential Beautiful landscaping, outbuilding and upkeep makes this defini one to look at. Selling $124,500. Reasonable VIctorian: A rare op portunity of the person who want3 to be close to the lift, yet on the sunnyside. This one bedroom, with loft, one bath home features new siding, good roof, wood stove, spacious kitchen and private yard. $115,000. Condominium. Spacio 1380 square feet 3 level next to sunny Corone Creek. Quiet, great views south and west. 2 no., .. ,,,. ...... plus large loft. dryer, dishwasher, wood stained glass. 8'12 years $149,000. For sale b owner. Mark at 728-4103

PAGE 2

FINANCIAL ALTERNATIVES FOR PROVIDING LOW AND MODERATE I NCOME HOUSING IN $MALL TOWNS IN COLORADO . . by Linda S . Rubin I I I I I \IIIII Ill I IIII I l l \ Ill\ Ill\ Ill I l l IIIII\ \ Ill II \Il l Ill\ I ll\ I I I 3 1204 00265 5687 -A thesi s ( Studio 3) submitted in partial fulfillment of the requirement s for T he Degree of Masters of Urban and Regional Planning / C ommunit y Development College of Urban Design University of Colorado Denver Dec ember , 198 0

PAGE 3

P R OJECT OUT LINE

PAGE 4

P ROJECT OUTLINE I . The Nature of the Problem A. Rapid Growt h in Small Towns 1 . Energy Impacted a radical change 2. !{ecreation Impacted building on an existing shortage B. Common Characteristics c . 1. Sky high land costs 2. Hi g h construction costs 3 . R e d tape and d elay in processing development pla n s 4. More profit in expensive unit construction 5. Small budgets and staffs 6 . R e sidents needing housing solid, employed, n eeded How l. 2. 3. 4. T his Growth is Different eed i s in moderate a s w ell a s low income Sing l e people particularly handicapped P ressure building on existing shortages Trad itional programs not applicable D. Purpose o f the Study -Analysis of Alternatives, C ompare and Contrast E . M ethod of R e search l. Research nature of programs 2. Contact administering agencies 3. Contact small t owns for data on shortages and their program usage II. Available Programs A. The Planning Process B. Federally Funded Programs 1. D epartment of Housing and Urban Development (HUD) a, Smal l Cities Program (part of C ommunity Development Blo c Grants Program) b, Urban Development Action Grants (UDAG) c. Lower Income Rental Assistance (Section 8 subsidies) d. V arious Mortgage Insurance Programs 2 . F ederal Housing Administration (FHA) 3 . Farm ers Home Administration (FmHA) a. Home Ownership Loans b. Rural Rental Housing

PAGE 5

4. r eterans Administration ( VA) 5 . Banking Legislation a . C ommunity ReInvestment Act t.CRA) b . National C on s u mer C ooperative Banking Act c . State of Colorado Funded Programs l . Colorado State Division of Housing -Development Grant s 2 . Energy Impact Monies a . Oil Shale Trus t Fund b . Energy Mineral Severance Taxes c. FmHA "601" Funds D. Additional Sources of Funds and Aid l . Colorado Housin g Finance A uthority (CHFA) a . Single Family Mortgage Program b . Multi-family Rental Program 2 . Rural America 3. Colorado Housing, Inc. (CHI) III. E v aluation of Thes e Programs IV. Some Innovation s A . Breckenridge B . Boulder c . Aspen v. A Planning Approach VI. Conclusions •' ..

PAGE 6

VII. Appendic e s A. I -Pro grams S ummary Chart B . II -Letter Sent to Towns C . III -Lis t of Towns Receiving Letters Other Agencies Solicite d D . IV Chart o f Towns Resp onses VIII. Bibliography

PAGE 7

Recently, Colorado Governor Richard Lamm addressed a state sponsored conference titled "Housing, The Challenge of the 80's," and h e provided these startling statistics : In 1975, the median price for a home in Colorado was $35,000; in 19 80 it jumped to $72,500. If we are to house our projected increase in population, 1.1 million new homes must be build by the year 2000, with an estimated capital investment of $54.5 billion, 15% of which will need some kind of assistance. This need for new housing, in the face of rapidly escalating , and always high mortgage rates, paint a grim picture for prospective Colorado homeowners. The conference itself was an attempt by the state to bring together various factions in the housing field, developers, local and state government officials, financie r s and interested citizens , to try and develop a role for the state and provide a forum for these various individuals to communicate their needs and concerns. The d ebate during the day long conference was lively, to be sure. According to the Governor, the need for "affordable" housing will be one of the most difficult needs to meet in the future, and no one at the conference either disagreed with him, nor had an eas y solution. Housing is so much more to people than buildings--it is a career for contractors aRd developers, a community for residents, a tax base for local government, and a high or low risk for bankers--and no one is exempt from feelings on the issue of housing.

PAGE 8

CHAPT E R 1 T H E NAT URE OF THE PRO BL E M M any C olorado small t owns a r e e xp e r iencing a n increasing h ou sing s ho r tage f o r low and moderate incom e groups which is uniqu e to C olorado's chan g i ng e conom y , and linke d jus t a s str ongly to her past. S mal l mountain town s who have always attracted t o urists , and mor e r ecently, skiers, are experi encing a n expansion of tha t s easonal housing d e m and, and o f f e rings are a lmost exclusiv ely within the price range of t h e w ell-to d o--condomin i ums and homes be ginning in price a t $70,000 and going up f r o m ther e . Rentals, i n such town s a s Tell u ride, beg i n at $400 p e r month and f o r a one be d r oo m , and many rental u nits have been conve rted for sal e at ast r o nomi cal prices, e liminating their availability to low and mode rate income peopl e . The s e tour i s t a r e a s nee d p eople--usually single , and o f low a nd moderate income to -run the i r sto r e s , w ait on their table s a n d type their l etters. I t has only b een r e c e ntly tha t employ e r s have had to struggle to reciuit seasonal e mployees , and the l ack of ad equate , affordab l e housing i s one primary reason. O t h e r small toHn s are und e r going dramatic changes du e to a d e velop n n g (or i n som e cas e s , r e-de v eloping) mining econ omy--espe c ially a s it relates to oil shale . o v ernight, town s double or triple in size , or brand new towns are built. T here i s no or v e r y little existing hou sing stock to utilize, an d the mos t c ommon s olution has been to erect a serie s o f barracks-like trailer parks . In these towns, not

PAGE 9

only workers and service people, but managers and executives are moving in. T h e type of pressure being exerted in these town s is well exemplified by Exxon ' s estimate of an expected increas e of 1.7 million people living on Colorado' s oil shale rich western slope in 20 to 30 years, where only a few thousand live now. The prospect of housing all of these new residents is mind-boggling. Both types of towns have characteristics of their housing shortages which they share in common. The price of land for development has skyrocketed as soon as the pressure 2 to build has surfaced, Th ere is an accompanying very high cost of construction and supplies in towns that are harder to reach by truck. There is much more profit available to the developer who builds "custom units" for high income families Hith all t he "amenities." Long procedures full of red tape delay in approving a plan and increase a builder's costs. Small towns have small budgets and staffs who often cannot deal effectively with the kinds of pressures the shortages bring. Often, the residents needing hou sing are residents with a solid job, solid citizens who benefit their communities by living there, and Hhom the communities nee d just as much for the services they provide and the jobs they perform. What complica t e s the problem is that this housini shortage i s different from shortages experienced in the rest of the United States, and d ealt with by various government programs . Th• need for hou sing d efinitely exists in the I

PAGE 10

moderate income level as well as low income. Single residents are particularly handicapped by the high prices, and even two jobs in a town may not provide enough income to 3 pay for a person's expenses. These shortages are building, in many cases, on existing shortages , already resistant to resolution due to the high costs mentioned above . A large part of the problem i s that these traditional governmental approaches do not appear to be aimed at the components of Colorado ' s housing shortages. The purpose of this study is, then, not so much an analysis of the problem, because the problem appears pretty cut and dried, and there is widespread acceptance of the existence of i t , but to analyze the current financial alternatives available to small towns to provide needed low and moderate income housing, and to contrast and compare these alternatives with what is actually being done by small towns. The assumption is that what is available is not always known to the town administrators, and that much of what is available isn't applicable to Colorado' s specific problems . The method employed was to research different sides of the issue. Programs were studied and analyzed to determine their eligibility criteria, target population, and the amount of their usage in the state. The agencies administering these housing programs were contacted to acquire information on which programs are being used in Colorado and what success I

PAGE 11

4 is being met with them. Various other agencies dealing with housing were contacted to discover their programs, purposes, and impressions of the problem and possible solutions to it. Several small towns all over the state were contacted to obtain the following information: l)Does a housing shortage exist in y ou r town? 2)If so, are you using any federal or state programs? 3)If so, which ones, and how successfully? 4)If not, why not and what is your town's policy and approach? The eventual result of this research was to develop an approach to providing low and moderate income housing that will have some universal appeal and application. The tenets of this approach would be checked with different authorities in the housing field to add relevance and realty.

PAGE 12

CHAPTER II AVAILABLE PROGRAMS The Planning Process calls for a series of steps intended to resolve a given problem, the key to which is the direct invol v emen t in the process of the community. The most crucial step a community must take , after b ecoming aware of a hou sing shortage , and analyzing and assessing the reason s for it, is to research available alternatives which have been used to address the problem. Ideally, the mos t applicable alternative(s) to t h e town' s situation and establishe d goals woul d b e implemented in the community, with as much citizen participation a s possible , and 5 followed at a sp cific point in time by a period of evaluation and adjustment. T hose towns in Colorado experi encing a shortage of low and moderate income housing are for the mos t part aware of the shortage and of the causes for it, though there are a f e w town s whose conservatis m prevents them from considering low and moderate income housing a s a relevant concern of town government. a good many of the town admin i s trators stand now is at the research or imple m entation phase. Many have employed a trial and error method of applying for various programs or, others having heard that federal and s tate assistance i s mor e trouble than it i s wor th, have avoided "institutionalized " programs . N on e theless, the federal government a nd the Stat e of Colorado, as well as several other agencies, offe r a numbe r of

PAGE 13

of programs designe d to help both governments and individuals directly in providing low and moderate income housing. Additionally, there are several towns whose approaches are unique to their town, and whose methods of approach are of value to other towns. In this section, each of the available programs will be reviewed briefly; a summary chart appears at the e nd o f this paper as Appendix I . A. Federally Funded Programs The agency dispersing the largest amount of funds and programs for housing is the Department of Housing and Urban Development (HUD). Their program booklet lists 40 programs dealing specifically with housing, and an addition-6 al four that deal with community development and have potential uses in providing housing. One of the most widely utilized programs that HUD has to offer is the Community Development Bloc Grant Program (CDBG), created by the Housing and Community Development Act / of 1974. Bloc grants are awarded to local governments for a variety of community development activities. But most of the funds, however, are allocated to urban counties. What used to be called "discretionary funds" for smaller town s has now becom e the Smal l Cities Program, which provides two types of grants, single purpose: one year grants to meet a specific need in the areas of housing, d eficiencies in public facilities of economic conditions; and comprehensive

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grants: one to three year grants used to addres s a need in defined areas which are related to each other. T o qualify, a town must hav e 50,000 residents or less, show citizen participation in the planning, implementation and assessment of the program, and must demonstrate a degree of poverty and n eed . Grants are based on the extent of,the poverty and substandard housing in the community, the extent to which the proposed program benefits low and moderate income persons, and the impact of the program on problems identified by the applicant. Competition is great for the $33 million allocated to the six state Region VIII in 1980, and 50% of these monies go to small cities within urban areas. A second important program of HUD's is the Urban Development Action Grant Frogram (UDAG), which became law as part of the Housing and Community Development Act of 1977. These grant s are intended to assist "severely distressed" cities and urban counties to revitalize local econom ies and deteriorated neighborhoods, through a combination of public and private investments, in projects of maximum benefit to low and moderate income persons and members of minority groups. The private sector' s financial commitment must be secured by the community prior to the start of a project. Of each year' s UDAG appropriation, at least 25% will be set aside for communities with populations 7 ! ' ! oo( •

PAGE 15

of 50,000 or less. Funding is based on a reasonable balance of residential, commercial, or industrial projects. Several eligibility criteria are used, but the primary one is the comparative degree of "physical and economic dis tress" among the applicants . (HUD Programs, p. 6) Here again, as in the CDBG Program, stiff competition for monies is stressed. Housing provided to low and very low income residents is often provided with funds from the "Lower Income Rental Assistance Program" more commonly referred to as "S ection 8" funds. (Section 8 of the United States Housing Act of 1937) Neither construction nor rehabilitation is provided in this program, but a rental subsidy which make s up the difference b e tween 25% of that rentor's income and the "fair market value" of the unit rented are. Residents must meet income guidelines which are different for each state, and for Colorado are $10,979. Included in Section 8 funding are ne1.,r, rehabilitated and existing units. The most common use of this program in small towns has been housing for the elderly. The above three programs are the largest sources of funds for providing low and moderate incom e housing in small towns by HUD. HUD has seven additional programs which provide mortgage insurance for such housing types as multi-family rental for low and moderat e incomes, horne 8

PAGE 16

for low and moderate income families, multifamily rental hou sing, condominium hou sing and mobile homes. Some examples: Mortgage insurance is provided to lenders in the Low and Moderate Income Families Program in the maximum amount of $31,000, which buys nothing in these t01ms. In the "l-4 Families" Program, the eligibility criteria apply to those who "can afford the case investment and mortgage payments." The condominium program loans are available to those who are "credit Horthy." Here again, programs are aimed too low for the cost of housing, or the eli gibility criteria are aimed too high for residents to qualify. The Federal Housing Admin istration is part of HUD and insures mortg age loans made by private lenders on homes through creation of a mutual mortgage insurance fund. Prior to the National Housing Act of 1934, residential mortgages often required a 50% d own payment and a five year t erm during which interes t was payable annually, frequently with the principal falling due in full at the end of the term. FHA changed this by offering long term, level debt service and loH down payment. FHA administers mortgage insuranc e programs under which mortgage l enders are insured against loss in financing first mortgages on single family homes, on housing projects and on loans to finance repairs and/or home improvements. 9 .' ..

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10 (Northwest COG , p. 23 ) FHA's programs are available to most income l evels through their local mortgagee. One of the most interesting hou sing alternatives en-couraged by FHA i s cooperative housing where the .resident does not own his unit, but owns stock in a non -profit corporation \ihich in turn owns his building. He then has the right to live in that unit as long as he/she owns that stock. Section 213 of the Housing Act includes cooperative projects designed primarily for middle income families. ( Northwest COG, pp . 27-28) ot especially popular in the West, the Housing Cooperative , which has been very success-ful in the East, can provide a flexible and independent source of housing for low and moderate income residents. Charged with serving the rural population of the Unite d States, i s the Farmers Home Administration (FmHA), a part of the United States Department of Agriculture. FmHA has a variety of programs for rural and farm families, and two apply specifically to low and moderate income hou sing. The Home Ownership Program offers loans to help families with low and moderate income s up to 100% of the FmHA appraised value in "op e n country and in places with popu-lations o f 10,000 or less and not associated with urban areas." T h e families must be without decent safe and sani-tary housing, b e unable to obtain a loan from a private lender, and have sufficient income to make payments, I I

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insurance premium s , taxes and maintenance. According to the Denv e r office of FmHA, the formula for determining eligibility i s to take the gros s incom e , d educt 5/. and $ 300 for each child, the resulting adjusted income cannot excee d $15 ,200 . In Fiscal Year 1980, FmHA allocated som e $32,000,000 to Colorado for this program. FmHA also has a Rural R ental Housing program where loans are made to b uild, purchase or r epair apartment style housing for pe r s ons with low and moderate incomes and those 62 years of age or older, again in "open c ountry and are a s to 20,000 i n population." Family incom e cannot excee d $11 , 000 (adju s t e d incom e), borrowe r s must have the ability and e xperience to operate and mana g e a r ental pro j ect and m ust repay o r refinance through commercial l enders whe n their financial po sition r eaches the point whe r e they can do so. I ndividual s , trusts , local public agencies, consumer cooperative s a nd profit and non-profit corporations are elig ible to apply for the $7,000, 000 allocated for Colorad o in Fiscal Y ear 19 8 0 . The Veterans Administration (VA) aids v eterans in o btaining loans on favorable terms to buy or build homes with no down paymen t require d , T h e VA maintains three major a r e a s of a uthority: l) To partially guarantee loans made to veterans by eligible lenders, 2) to insure loans made to v e t erans by private l enders, and 3) to make direct ll { .

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loans to veterans in instances where mortgage credit is not otherwise a vailable. Those eligible for VA loans are v e terans, un-remarried widows and certain servicemen, and these individuals can receive a great deal of help in obtaining housing in small towns by u sing their VA benefits. 12 These programs are the major sources of aid specifically fou housing from the federal go v ernment. In the forseeabl e future, as an energy impacted a rea, Colorado may be eligible for special federal energy development/impact types of funds . Outside of the housing l eg i slation, C ongress has passed two pieces of banking that may have a positiv e impact on providing low and moderate incom e housing in small towns. Neither o ne provided funds directly, but could be combin ed with other efforts to get needed housing built. Title VIII of the Community Develop ment Act of 1977, now referre d to as the Community ReInvestment Act (CRA) states that financial institutions hav e a "continuing and affirmative obligation" to help meet the credit needs of their local communities, especiall y as those needs apply to the areas of low a nd moderate income housing. Bank s are examine d periodically and their performance on meeting community needs is evaluated . According to Ray Wiske of the Federal Home Loan Bank B oard, the legislation doesn't have any real "teeth" in it for enforce ment, but future projects a ba nk wishes federal approval -I /

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for can be delayed until a bank's performance on CRA standards is improved, The second piece of banking legislation is the National Consumer Cooperative Bank Act of 1978, which created the Consumer Bank. The Bank was established to encourage the development of consumer assistance to eligible consumer housing cooperatives and their members to finance the construction of new projects, acquisition of existing housing for conversion to cooperative ownership, including necessary rehabilitation, improvement repair, or modernization. Included in the Bank ' s services is provision of technical assistance in developing and managing such coops. Either one of these pieces of legislation could provide incentives to build or acquire, and develop low or moderate income housing. Cooperatives have an excellent potential for providing housing. B. State of Colorado Programs Within the structure of the state o f Colorado, there are two sources of housing financial aid. The Colorado State Division of Housing (DOH) gives State Housing Development Grants for t he rehabilitation, construction or acquisition of modest rental and o wner occupied unit s f o r 13 low income persons and households. These grants are designed to make up the difference between what an agency has already received in grants and aid, and what is further needed-there are no "front end" monies available. The appropriI f

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ated funds are split evenly between urban and rural applicants. Grants are based upon the absolute need of the household, their income level, and are made to public entities and private, tax exempt, non-profit corporations. Some $2,000,000 was appropriated for 1980, most of which has already been applied for and granted. The State Department of Local Affairs has three energy impact related sources of funds for energy impacted impacted communities only. The Oil Shale Trus t Fund , som e $50 million, i s lease payments returned to Colorado that is in turn appropriated by the legislature. Local communities must present requests to their local COG' and then to the Joint Budge t Committee. One bill consisting of several requests is then presented to the legislature for approval. The Energy Mineral Severance Taxes are paid in the process of mining in Colorado. Of the total monie s , 15% i s returned to local communities in energy impacted areas where the community has decided on local projects. A local r evie w team prioritizes the requests and the Department of Local Affairs makes the final decisions on grants. For receipt of these monies, a community must b e in an energy impacted area, the project must be sponsored by a local gov ernmen t ag ency and the project must benefit the public at large. 14 T h e third program under the Department of Local Affairs

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is actually a loan program administered by the FmHA--called "601" grants. In this case loans are made to buy land and bring in utilities, but not to build. The state has advisory capacity, but decisions are made by FmHA. Monies must b e used for public facilities and usually go into publicly owned and assisted public housing. The grants are made to town s who cannot get any other funds in a timely manner. Again, with these Colorado programs, communities are competing for scarce funds, and there is not nearly enough mone y to meet every community ' s needs. C. Additional Sources of Funds or Aid Among the financial alternatives for small towns to provide housing for low and moderate income residents are three agencies that are no t governmental in nature, but do provide some very essential help and money . The Colorado Housing Finance Authority (CHFA) was created in 1973 by the Colorado General Assembly to provide funds for 15 the financing of housing for low and moderate income persons and families through the sale of tax-exempt revenue notes and bonds. These notes and bond s are the obligation of the Authority and not of the state (Investing in Colorado, p. 1). CHFA operates two separate housing programs. The Single Family Mortgage Program, due to the tax-exempt statu s of its bonds, is able to make funds available to participating lenders at a below-market rate of interest, and the lenders in turn use I /

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the funds to make below-mark e t rate mortgage loans to qualified families and individuals. These f amilies' and individuals' adjusted income cannot exceed $18,500. Since the inception of CHFA, some $180 million has bee n loaned to 5600 people in Colorado. In 1979, 807. of these loans were mad e to prior rentors, whose a verage income was $15,082, whose median age was 27, and 44.5% of which were minority, including 23% of whic h were women. CHFA' s Nulti-Family Rental Program provides construction and permanent mortgage financing for the rehabilitation or construction of apartment dwellings for low income persons, at least 20% of which must be HUD Section 8 qualified. Rural America is a non-profit, membership organization founded in 1975 , whose goal is o assure rural people 16 equity in the formulation and implementation of public policies and programs. Among th ir activities are a national program of action oriented research, t echnical assistance and training, current legislative information and public education and advocacy. Basically their programs center on providing information to their membership through several newsletters and publications and providing l obbying in Congress and at the state level. However, mentioned in their literature is the administration of "a revolving loan fund that helps community based organizations leverage capital needed to develop rural housing projects." (Isn't it

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About Time Someone Spoke up for Rural America? p . 3) . This fund was established "in recognition of the growing problem affecting rural p eople's access to land," and currently has $1 million available, but the criteria for making these loans has yet to b e finalized . 17 The third non-governm ental agency involved in low and moderate income hou s i n g is Colorado Housing Incorporated (CHI), which was formed in 19 7 1 to provide t echnical assistance and problem solving services in the field of s ubsidized hou sing for individuals and families in Colorado. CHI is a non-profit Colorado corporation governed by a nine m ember board of directors sel ected from various Colorado communities, and includes persons of low and moderate income levels as well as businesses. They receive their funds from the Community Services Administration. CHI offers assistance only to local groups, officials or individuals who demonstrate serious and constructive intentions. CHI requires that services to be rendered to be outlined in a l etter of agreement, and except in the case wher e a fee for packaging is allowed in a government grant, CHI offe r s their services at no charge. (Northwest COG Guide to Fed eral and State Housing Programs, pp. 41 , 42) Their approach is to assign staff personnel at variou s points in the project to help with such functions as housing surveys, funds applications, etc. T heir primary responsibility is to stay informed on

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the current levels of various monies available in Colorado. This kind of inventory and planning service could be invaluable to a town who does not have the time or staff to pull together a complete housing package that many programs require for application for funds. These the n are the programs most involved with low and moderate income housing which are available to small towns today. Each of them was developed with a specific "target" in mind, each has a specific set of eligibility criteria. These criteria, and the administration of the agencies dispersing the funds are what make these programs applicable to the shortages in not app licable. 18 ,. I f .

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III. AN EVALUATION OF THESE PROGRAMS In order to evaluate these programs, it is necessary to take a second look at low and moderate income housing shortages in Colorado. These small towns vary in political affiliation from liberal to extremely conservative, mostly on the conservative side, in a state that very much in its rural areas subscribes to the western philo sophies o f personal freedom, as little government a s possible,. and the work ethic. Rural residents often look on the involve ment of go vernment in their daily lives very skeptically, even though in the ski areas there tends to be more of an open mindedness to the need of government to be involved in housing. These towns do not have t he extreme "pockets of poverty," or are "severely distressed" expecially compared to other cities reviewed for HUD programs. There is just 19 as extreme need for moderate income housing as there is for low. Inflation has hit these to\ms even harder, as their rural locations and often difficult terrains make construction even more expensive. Additionally, developers are e asil y enticed to build the expensiv e condominium or vacation home, which are very much in demand too. Many of these s mal l towns have neither the staff nor the understanding to plan for a more balanced housing inventory, let alone the expertise to be "on top of" available programs and/or funds

PAGE 27

20 for their use. These conditions create the atmosphere that will be used to evaluate HUD's, FmHA's, and all of the programs described here. A. Federally Funded Programs As was mentioned earlier, mcst of HUD's focus is on urban, distressed areas--and the more the urban and distressed, the better. Sources at the state Division of Housing ' and others stated flatly that HUD isn't interested in rural areas, and obstructs efforts to apply for funds there, which is very unfortunate considering that this agency is the primary federal resource of housing funds. HUD's focus is on extreme deed, b y their own definition. The Small Cities Program division of the CDBG program criteria is an excellent examply of how the criteria do not apply to Colorado's situation. The federal regulations specifically state: "The Small Cities Pro g ram i s competitive in nature and the demand for funds far exceeds the amount available. Eligible applicants selected for funding will be those communities having the greatest need as evidenced by poverty and substandard hou sing ••• " (Federal Register, Vol. 44, No. 124, p. 27480) These kinds of extreme conditions do not u sually exist in energy boom towns or ski resort communities. Additionally, 50% of Small Cities funds go to small cities in urban areas, leaving only $3,487,000 available to rural small towns. Considering the housing need, that is precious little.

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The Urban Development Action Grant funds are about the same in focus as Small Cities; only 25% of total UDAG 21 funds are even available to smaller towns. Grants are made to towns w ho can demonstrate "ongoing results in providing low and moderate housing," in other words, have successfully applied for HUD f und s before. Applicants must demonstrate "physical and economi c distress," including the age o f housing stock, p e r capita income , population outmigration. None of these conditions come anywhere near situation s in Colorado small towns. In fact, as of 1978, only Denver and Pueblo were "certified" as eligible to even apply. It is hard to b elieve that Den v er, with her changing skyline and relative imp erviousness to recession, could be conside r e d physically and economically distressed, and town s like Craig and Rifl e would not. One program where Colorado small towns are taking 1 advantage of a v ailable federal monies is HUD's Section 8 rental subsidies. E v e n here, the program is highly slanted towards the urban poor. In the firs t half of 1978, of the new and rehabilitation housing starts, 13,353 of the 40,369, or 33 % were in non-metro areas. It is important to note here that the new and rehabilitated units are only 29% of the total units , the remaining being existing units. The total number of non-metro units was 140,346, 217. of all units. Colorado and the res t of the mountain states use

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the Section 8 funds almost exclusively for elderly housing, and as of April, 1978, 617. of the Section 8 housing units in Colorado were elderly housing. All of the 290 FmHA sponsored units in Colorado in 1978 were for elderly citizens. According to Rural America, the Section 8 monies are mostly urban in focus and when granted to rural areas, are almost exclu sively for the elderly, and not nearly related in number to the relative shortage of housing. 22 (Rucker, pp. 2, 6, 10, 12) Of the towns queried for this report, those reporting any usage of programs at all stated that the program use d was Section 8 housing for the elderly, which would support Rural America's research. The problem with this program i s that it is not a construction, rehabilitation or purchase program--it must be used in combination with some other long term financing arrangement. These funds must b e competed for from FmHA, CHFA and others. Units under contract for the subsidy must be managed, their residents screened, and HUD regulations met after construction. This is a very large and complex order for a small town to meet, which may be why in such town s as Telluride and Longmont, the citizens rejected proposals for subsidized housing. Farmers Home Administration is an exclusively rural focused agency. All of their programs must be in rural areas by mandate from the Congress. Their home ownership program in Fiscal Year 1980 allocated $32 million for

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23 Colorado, which is allocated on the basis of the percent of ' low income residents in an area. Many of Colorado's energy/ ski boom town s don't have a high percentage of low income residents, period. FmHA' s Rural Rental Housing program y ' in 1980 has a very small $7 million to offer to purchase, build or rehabilitate rental housing, a drop in the bucket when compared to the Colorado Division of Housing estimates which show as of January 1, 1 977, 31,890 elderly renter, 17,350 elderly owner, 63,640 non-elderly rentor, and 19,010 non-elderly owner, lower income households exist in Colorado needing and eligible for housing assistance, and these numbers DO NOT inlude all on e person, non-elderly rentor households. (Colorado Division of Housing, p. 7) FmHA is obviously very underfunded for the kinds of need they are trying to addre s s , especially when you consider that all FmHA's rental dollars go into Section 8 housing for the elderly. FHA and VA are old housing finance standards. They are individual types of programs where the household applies and the loan is bas ed upon the qualifications of the house-hold. Both programs are utilized to their maximum for those who are eligible. What works against them is the increasingly high mortgage rates and the inflationary prices of the housing to b e purchased. For instance, the average price of a home in Glenwood Springs is estimated to be around

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24 $80,000 and very few individuals of low or moderate income can come anywhere near the down payment and monthly payments on a loan such as that, let alone qualify. FHA, and VA apply to the purchase of homes only, and cannot be considered as part of the solution of the rental picture. This analy sis reveals that the federal housing and community development programs come out as presumed at the onset--either out of sinq with the needs of Colorado, of so underfunded and/or urban slanted that they contribute very little to the solution. Among them, FmHA/Section 8 seems t o be the best bet for small towns, if their problem is exclusively among the elderly. In most cases, it is not, it is low and moderate income singles and families, whose incomes cannot afford available housing. Among the federal sources of aid, that leaves the two pieces of banking legislation. When contacted, the Federal Home Loan Bank Board said that the Community Re-Investment Act doesn't have any real teeth in it to coerce banks to comply, but that most bank s are doing their share. According to Mr. lvis k e at the Board, the Act is designed more to encourage communication betw een citizens of a community and the lenders, s o that needs are known, and is perhaps more appropriate t o large cities than small towns. In terms of actual dollars, then the CRA can't be relie d upon in specific instances, but does provide an incentive

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to a bank to comply, especially if the Board refuses permission for a n e w project, based upon a bank's past performance. 25 In terms o f p o ssibilities for real dollar help, t he National Consumer Cooperative Bank Act seems more promising. what this act relie s on is the formation o f a cooperative for housing. It do e s not state how many persons can compose a cooperative , and that could prov e to be a problem if it is over ten or so. F o r ming a coop naturall y presumes that the m e mbers are fairly stable members of the communi ty--which would help the teachers, doctors, et:::. of say an Aspen, but wouldn ' t help the seasonal empl oyees, unless a housing c o op erative could be built and then rented. Overall, a housing cooperativ e as described by the Act seems an excellent possibility for moderate income, permanent residents o f a community . Conceivably in the development approval process in a t own, extra points or density could be a l low e d cooperatives that serve low and moderate income residents . T he only prob lemthat appears then is if the bank a ssumes that because other housing can be provided, t hat the c oop erative is not filling an unan swe r ed need. Nonetheless, a housing cooperativ e seems a valid alternative to providing low and moderate incom e h ousing. B . State of Colorado Programs The Colorado state programs fare much better than the . .

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standard federal programs with regard to their relevance to the state's needs. The State Division of Housing's Grants work if a community already has a project going and needs a bit more money. Since there is no "front end" money, planning a n d d evelopment funds for a program, and probably most of it, must come from other sources. Again, the requirement of "absolute need" as compared with other locations, can create the kind of competition, where very needy communities jus t can't win . The Division of Housing prefers grants to innovative projects, which may help a great deal--in the future, but may reject traditional approaches, als o needed by some towns. Twp of the most promising and responsive programs, at least for those tmms hit by the energy boom, are administered by the State Department of Local Affairs, and these are develope d as specific responses to the tremendous problems presente d by oil shale development and the rise in uranium, gold, silver, etc., mining on the Western Slope . The Oil Shale Trus t Fund and Energy Mineral Severance 26 Taxes have a tremendous amount of money which can be applied for. (Some $70 million) The local planning and participation is one of the be s t features of these p rograms, and the prioritizing at the county level will help in non-duplication and coordination efforts. This local planning also provided the opportunity for towns to design programs unique to their

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needs. The real importance of these programs is in their specific focu s on the problems of energy impacted areas, one of the few programs tailored to a present and growing need in Colorado. 27 The third program that the Department of Local Affairs i s involved with is a d ifferent story. The FmHA "601 " funds, in which Local Affairs only advises, but is still considered to be energy impact funds, can only be u s ed for o btaining land, and not for construction. What can and does happen is that land is o btained, and construction funds are no t available. The Division of Housing mentioned that this l ack o f coordination has sto pped several projects, o r at least delaye d them. Thes e funds are only available if a community can't get a loan elsewhere in a "timely manner," which suggests more of a desperation sourc e than a solid, planned for on e . There are some $3-4 million available, and the principle of lessening the price o f land would certainly b e an excellent metho d to lower the developer's cost, and thu s the pric e to the eventual owners or rentors. This program would have to be coordinated closely with the accumulation o f f unds for c onstruction, or woul d be use less. These state funded program s are definitely an improvement over the federal ones in many c ases. The Division of H ousing is funding innovation in approach, and filling in financial gaps, as well as acting as the lead ag ency for ..' I

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HUD and FmHA dollars. Th e energy impact monies hit hard at problems in energy impacted town s by providing grants for individually tailor ed programs. Trouble i s with especially Division of Housing--u nderfunding. Energy imp act monies can't be spen t in any other place and remove s them as source of help for recreation impacted areas. N onetheless, state programs address many of the needs of Colorado's small towns in an effective manner. C . Other Sources of Monies and Aid Lastly are the three agencies that are not state or federally funded. Colorado Housing Finance Authority is one o f the most promisin g . Through their Single Family Mortgage Pro gram, they are working on a one-by-one basis 28 to get people housed by lowering the cos t of borrowed money . This, of course, does not lower the prices of the homes, many of which are beyond the reach of all but the rich. CHFA's Multi-Family Rental Program has built 12 new developments in 1979 totalling 742 units, which i s very impressive. CHFA is ties to HUD's Section 8 appropriations, which slows them down , as could the condition o f the bond market which provides the money to finance the construction or r ehabilitation of these units. The bond market is pretty tight now, which is curtailin g their efforts to ge t units built. All in all, CHFA is a flexible kind of an ag ency, less tied to urban/rura l advocacies, and very well tied

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29 and sympathetic to the idiosyncracies of housing in Colorado. Rural Americ a , as a source of funds is pretty questionable. The million dollar revolving loan fund has no eligibility criteria applie d to it yet. However, Rural America i s one organization whose specific charge is to give rural areas an d small towns a stronger voice in Washington. They have lobbyists t-latching legislation and regulation. They are on top of funds and sources and provide that information to their membership and others via newsletters and publications, which are extremely specific and helpful. They are an agency to watch because, once in the funding business, they could provide much valuable help to small towns. Lastly is Colorado Housing Incorporated, whose services are mostly technical and not financial. One of the most consistently observed problems in rural Colorado, which surfaced as well at the State Housing Conference, was that towns are ill prepared to handle their problems: they have no housing inventories, no housing element in their comprehensive plan, if they even have a comprehensive plan, and have no idea where or how to get help. CHI provides exactly those kinds of assistance and directs a town to the program most likely to help them. Unfortunately, CHI cannot be e verywhere, no r help everyone, and that is where they come up short, b ecause the demand for their services • J • ' .

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far out strips their ability to provide. Where then do all of these alternatives l eave the small t owns? For several small towns, it has mean t that the y would rathe r develop their own strategies and rely' on their own r e sources to resolve the housing shortages. There are at least three towns in Colorado who have taken some unique s teps to create more low and moderate income housing and can serve as an example to other t o wns. 30

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31 IV. SOME INNOVATIONS A. Breckenridge T he American Institute of Planners conferred one of its 1978 planning awards to the Breckenridge Developmen t Code, which differs substantially fro m commonly used subdivision and zoning regulations by not only eliminati ng uses-byright, but also by a ssuring developers of a precise time f rame f o r revie w of a proposed project and approval or disapproval. Ki r k Wickersham's basic philosophy in helping to creat e this c od e was that "substantive controls can be as rigorous and c omprehensive as any community would reasonably w i s h without serious protest f rom d e velopm ent interests , so long a s the decision-making process is quick, cheap, straightforward , fair and predictable." (Rubin, p. 1) Breckenridge is a r ecreation-impacted town whose c hief resource is their ski area, which opened in 1961. As their town grew, the frus trations /between what was being built and the needs of the town cau sed town officials t o order a consultant to d e v e l op data, po licy and impact analysis t e c hn iques for all growth factors of concern to the community, Each neighborhood was considered, and policy statem ents extrac t e d from n eighbo r ho od r esearch. T h e end result was to implement a points system of approving developments that takes n o more than a give n nu mber of days based upon the dollar valu e o f the propos ed development. There are

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32 "absolute policies," with which a developer must comply, and "relative policies" which are given points based upon their importance, and compliance to these policies. The final "score," which ranges from -2 to +2, determines whether the plan Hill be app r ov ed or not. Scores over 0 can be awarded extra density allowances. Thus, Breckenridge is enticing developers to consider such relative polic e s as open space, s cenic values, placement of structures, and development of employe e or low/moderate income housing units. The plan has a great deal of potential. According to Diane McGrath, in Breckenridge, the town is making every effort to encourage the development of low and moderate incom e housing. The D evelopm ent Code has been altered to provide this encouragement by increasing the "allocation points" possible for employee housing. However, only one project is being developed now, and the future is h olding only possibilities, not realities. This suggests that although the approval process has been streamlined and its cost to the develope r lessened, and points are awarded for the development of employee housing--this is not enough enticement to developers to build low and moderate priced employee type housing. A voluntary type approach doesn't appear to hav e the strength to produce the needed housing. B. Boulder In May of 1980, the city of Boulder passed a truly ' .

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innovati v e ordinance which protects modera t e i ncom e residents from the rapidly rising housing prices there. Ordinan c e 4495 creat e d the Moderate Income Sales Program, \-lhich insures that "d\velling units committed for low and m od e rate incom e sal e s und e r the Growth Control Ordinance a nd R e solution 115 shall be maintained in the low and moderate income h ou sing stock of the City for a period of at leas t 15 years" (City Council of Boulder, May, 1980). Moderate income hou sing units must comprise lSi. of new development by contract with the city, and the n e w 33 ordinance then adds that n d t only are those units originally sold at moderate pric es, but they must b e sold at moderate prices for 15 years, which applies to all owners for 15 years each. If a seller cannot sell at the moderate price in six months, t hen the owner mus t allow the Boulder Housing Authority to buy t he hou se, i f the Authority desires to. Only if the city d oesn't want to buy the house can it be sold on the op e n market at the prevailing price. This approach speaks to several issues. First, it commit s a city already committed to very limited growth (450 building permit s per y ear), to also provide a range of housing prices a nd availabilities. Implicit in this commitment i s t he recognition that the "free market" does not provide for this kind o f housing when allowed to operate on a solely "profit motivated basis." Second, it is a -

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compromise, so that developers can use their remaining 85% of a proposed developm ent to price as the market will bear, and so that the seller has an out if he/she cannot sell that dwelling at a later time. This kind of set aside will not rapidly build up a stock of moderate housing, but it is an excellent example of what a town can do utilizing their own legal structure and resources to add to and then preserve a supply of housing in a given price range. C. Aspen 34 Aspen has a very comprehensive approach to their housing shortage. The Housing Task Force was created to study the problem and make recommendations. Their Housing Action Plan best states the position they did not want to find themselves in: " Communit y cohesiveness is threatened if the section of professional, management and longterm personnel cannot find affordable and adequate housing on a more permanent basis. The economic base of the resort is seriously undermined if employees of all income levels are being displaced, or if newly arrived, forced to seek housing twenty or more miles away." (Aspen/Pitkin County Housing Task Force, 1980) The resulting proposal for actions to be taken has three elements. The first element was the passage of housing guidelines, where three classes of housing rental .J

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35 and purchas e prices were set by law and to be evaluated on a y earl y basis. The second element is a Housing Action Plan (HAP) t he direct report of the Task Force. In the HAP, the Task Force lists three separate parts which make up a balanced and successful plan: production of units, promotion of better utilization of existing units and reduction of demand . For each of these parts there would be three types of responsibilities that together accomplish the aim of the part: legislative , administrative and private sector. For example, under t h e "production of units" part, legislative responsibilitie s would b e d evelopment of "caretaker units" to add additional units to the development, and development of a cooperative h o u sing effort for Snowmass, Asp e n and Pitkin counties . In this way, each of the necessary parts for creating enoug h housing would be then divided in responsibility between the legislators, administrators and the private s ector. T he third element in Aspen's housing program is the passage of two pieces of legislation to promot e t h e deve l opment of low and moderate housing. The first was the 70:30 ordinance which exempts housing projects from the growth managem ent plan (GMP) rules if ,JO% of the deeds are restricted. The second piece of legislation 1.ras the Additional D w elli n g Unit Ordinance which promotes the developm ent of bon afide low, moderate and middle income housing units free of speculative investment influences,

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36 by increasing the density allowed in certain specific areas o f the town if on e half o f the units are deed restricted. Al l in all, Aspen has put togeth e r a v ery complex and thorough program that addresses very strongly the need for h ousing in their area. Because these are n e w ordinances, though, there are no results to be studied. However, there are several k ey items in the pro gram that point to its probable success. First of all, the HAP was developed by a task force representativ e of the community, a proven planning tool that adds credence and support to the plan. Secondly, the importance placed on the usage of private sector re-sources mean s that not only public resources are expended, ' but that the private sector i s responsible to help resolve Aspen's housing shortages, which the y i n part create. Third, the legal and documented restriction on prices allow no vacillation; low, moderate and middle income housing is defined by law, eliminates the p ossiblity of mis-interpretation. when each of these price ranges wer e applied to a 6 72 square foot one bedroom townhous e purchased in Denver in 1979, and found that the rental on that unit would be $282 l o w incom e , $369 -moderate incom e , and $4 57 for middle incom e --very much on the high side for a rentor, which points quite clearly ,to the higher incomes influencing a n Aspen average. T h e real value of Aspen's program is its "bottom up" development, its in-

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volvement of private and public sector r esources, and its utilization o f all resources at hand. It i s an excellent example of classic planning/community development theory in action. The shortcomings of this approach are its idealism--Aspen is an "enlightened" and fairly liberal a nd involved community--and its relative time and cost. This is a very time-consuming and costly (both in terms of actual dollars spent, and staff hours) process . Small towns in a big crunch may not have the time or money to apply this methodical of an approach. 37 .

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V . A PLANNING APPROACH TO PROVIDING LOW AND MODERATE INCOME HOUSING The shortage of affordable hou sing is becoming a national crisis testified to by Governor Lamm at Colorado' s housing confe rence, by Jay Janis, Chairman of the F e deral Home B ank Board at the 88th annual convention of the Unite d States League of Savings Associations , and by a government appointe d commission in a new HUD sponsore d report. Individuals at all income levels are b eing af-fected, and no community i s e xempt from the pressure . In spite of some tre m e ndo u s pressures to act and build or buy right now, the be s t approach is still the lower, community based planning approach . 38 First a nd foremo s t must be an awareness of the problem. The fact t h a t some communities cannot lure seasonal help, that management level residents must commute several miles each day t o wor k , that homes for sale begin in pric e at $75,000--all must be construed as dangerous for the economic health of a community, and a decided problem. Inherent in this aware ness that a laissez faire attitude will only permit the problem to increase, and, as the Aspen HAP declares, threate n community cohesiveness and seriously undermine the local economic base. Some effective methods to build awareness would be through the media, discussions in tow n meetings and in neighborhood m eetings.

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Once an awareness of the problem i s achieved, the next step would be for a town to commit itself to including a variety of prices and levels of housing, and to put this commitment in writing in the form of a town policy and/or ordinance , such a s Boulder has done. The best possible way would be to codify and define in price p e r square foot, as Aspen did, specifying the meaning of "low and moderate'' income hou sing. The beginning of a hou sing plan would b e to inventory the current housing stock. An inventory of current stock is crucial to any approach a town would want to take, including no approach. An inventory of such qualities as standard, sub-standard and r ental prices and purchase prices would provide a community with a foundation for whatever action the c ommunity wants to take. Al ong with 39 the housing stock inventory, one should be taken of land allocated and not currently being used for housing in either the town's or the county's plan. If no such plan exists, an inventory of land usable and suitable for housing could be done. Next, a to n must consider what direction they wish their town to take. There are some things that cannot be prevented, such as a degree of growth, and some things that cannot occur in small town s , such as a total absence of low and moderate income ho using. This picture of the town's

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40 future need b e drawn with the help of citizens of all incomes and occu pation s , a nd need b e in writing as well in orde r to imple m ent it. Provisions need b e made for change and evaluation and response to changing conditions . The tmm then has a current inventory and a future picture . The next step is to d ecide upon what to do to get from the current situation to the future goal--what needs must b e satisfied if that picture is to b ecome a reality. This needs assessment must be specific in orde r to determine how these n eeds will b e met. Some of the specifics s hould be the types and prices o f housing needed, t h e number o f units needed , what kinds of facilities need be developed to service them and where all of this will b e located. The "rules" for that de v e lopm ent, zoning, PUD, etc. are developed from this plan. The flexible points awarded syst e m developed by B r eckenridge i s an excellent example of how the "rules" can wor k in both the town's and developer's best interests. It is at this point that all of the available services and prog ram s can be considered as the mean s to the ends desired. T owns with a large number of eljerly should consider the FmHA s ponsore d Section 8 units. Those with a large number of seasonal workers could conside r employee housing p rograms provided by developers a n d new businesses. Energy impacte d town s coul d use e nergy impact monies to provide /

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land or housing for thier new residents. The point being that by being specific in its needs, the town can then select a program from the government or design one of the i r own, but in neither case can they succeed without knowing exactly what is needed. Both federal and state programs require this kind of preparation prior to appli-cation. Having com e this far, the town should enlist the help of two sets of residents--the private sector business people , and the bank ers, both of whom benefit from increased local business, but ofte n don' t take part in resolving the resulting housing shortages. It must become part of doing bu siness in a town to consider the effect of that business on housing. Banks should be encouraged to honor their obligations under the Community Re-Investment Act, a nd these efforts tied into the housing plan. If voluntary types of programs fail to entice private sector businesses to provide low and moderate housing, then s uch legislation as that passed by Boulder must be considered by the tmm. Now the town has a plan, some needs to be met and the cooperation of the private sector and the banks. At this point a town can decide to provide the housing from its own resources a s Aspen is doing, or apply for outside funds. The m ethod which giv s the town the most control \-'Ould be 41 ..: . '

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42 t o use its own resources, but few towns have the kinds of staffs and monie s available as i n A s p e n o r Vail. The next best approach is to a nalyze the needs to be met and select the federal o r state program that best suits them--not tailor a project to meet needs, and have a n alternative source in mind if the firs t one fails . The best of the programs analyzed in this paper are Colorado State Division of Housing Grants , CHFA r ental and purchase programs, State Energy Impact monies and Section 8 subsidies with FmHA funding. These have the best potentials for responding to need s in Colorado. Small town s should be members of Rural America to increase their awareness and understanding of available programs, and make use o f Colorado Housing Incorporated to help with inventories, plans , etc. T o summarize , the s teps recommended in a planning approach to providing low and moderate income housing would b e : T o develop a n aware ness of the shortage and its impact on the community -To make a commitment to including a variety o f prices and t ype s of housing in the commun ity To inventory current hou sing stock and lands available for housing ..;

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-To develop a future goal for the town and priorities for its development -To d ecide on what needs mus t be met to get from the current situation to the future goal--being very specific To obtain the cooperation of the private sector a nd local banks T o decide if loca l resources can meet the needs developed -If not, to decide which federal or state pro gram can meet thes e needs, and have an alternate choice. In formulating this plan, several of the elements wer e describe d to different hou sing experts, and the plan was also molded by the information given at the Color ado Housing Conference. The major criticism of this approach was that reality does not ofte n provide for the idealism in the approach. Many towns aren't willing to consider having low income housing i n their towns because they believe that such projects entice unwanted elements into their towns. There is a very real lack of understanding of housing as a need an d the various programs available to help provide it, which impacts o n the awareness phase. In an interview with John Maldonado, Director of the Division of Housing, he stressed the complexity and political nature of housing which can pit special interests against each other, and 43

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44 that big money interests can unduly influence the development process. He feels as well that local p eople are not often aware of the future consequences and costs of providing housing. All of this is fair criticism. The planning approach is a long frustrating process that at best comes up with a compromise. The meth od and features of this plan, though, were largely upheld by those interviewed and those attending the Conference. The elements most compl e t ely support e d are knowing the parameters o f the local problem , and tailoring the solution to fit, with the full participation of the communi ty, the private sector a nd the bank s . Admittedly, some of these are currently l acking now, but not bec ause it wouldn't work, m ore because towns lack local expertise to help und erstand an d implem ent. !

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VI. CONCLUSIONS Every method of approach when implem ented, must be adjusted to a town's specific situation, and in this case, while similar in sev eral respects, energy impacted towns and recreation impacted towns are very different in the specifics of their problems. Recreation impacte d towns are often single season/economy town s whose housing i s expensive b ecause of the d emand of vacationers and second home owner s a s a function of their high income. The developer make s mor e money building for high income residents and the town g ets more money by taxing them, both of which are pretty difficult pressures to counter. The town m u s t then focus on protecting the middle incom e and low income worke r s from these market pressures. Boulder's approach does this well. By contract with the city, the developer mus t allocate a certain percentage of units to moderate incom e pricing, and units must remain at that price level for 1 5 years per owner. A second approach is to require n e w and expanding businesses to provide the needed housing a s a cost of business. Recreation impacted must expand their existing low and moderate income housing and then protect these housing units from market pressures, the firs t a responsibility of private business, and the second a responsibility of town administrators supported by law. 45 .j

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The energy impacted towns are different in practice. Their housing short a g e is more absolute because their populations will grow a t rate s unheard of since the industrial revolution brought millions of p easants into the slums of the cit i e s . These t owns are faced with housing p eople , and fast. The current solution has been to provide mobile homes jamme d in s m all, treel ess parks that look much like barracks . The t owns have better options. Monies can b e used to acquire land s or pla n to have lands developed for mobile homes in parks that a r e aesthetic and pleasant 46 places to live . To\ms must face the fact that mobile homes are currently their o nly source of quick housing, that parks for mobile ho mes do not h av e to be ey esores, and plan for them. Addition ally, d e v elopers of modular unit housing could b e encouraged to d evelop properties as well, it is possible to get D epartment of Housing monie s for such innovative projects . The crucial facto r s to these towns in the absolute absence of hou sing and the need to build it--fast. O f all t he c onclusion s to b e made from this research, the strongest is tha t providing low and moderate income hou sing , becaus e housing touche s everyone ' s life in differ ent and s ometimes opposing ways , i s a very complicated issue, with no s e t o f given parameters, and no easy solutions. What i s certain is that providing housing is not a solely financial i ssue , that politics and basic human

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values play large roles. However, the costs and dollar values are t h e core of the problem and become more ofte n than not, the true basis for action, which means if that housing is to b e provided, these costs must be mediated. It is c ertain that inflation and the high cost of money will make the job tougher in the future and mandate better cooperation betwee n town residents and their banl{s, and also mandate a l arger role and greater responsibilities for the private sector . The state's role could be expanded to include such responsibilities as getting attention paid to the problems suffered by Colorado's small towns, providing grants and aid for research a n d development of modular and other forms of "quick" housing , and perhaps working with local governments to encou rage standards o f development revieH which would decrease the time and cost o f the review. City administrators and planners must reduce project approval time and its unc ertainty which raises a developer's cost, but without sacrificing quality. Breckenridge has done tha t . Additionall y , information must b e provided to town s experiencing s hortages as to what programs are available and what their eligibility criteria are. Perhaps another role for the state would be to help towns to acquire the expertise and m onies to provide hou sing . It remains a fact that providing low a nd moderate income housing in e nergy or 4 7

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recreation impacte d s mall towns in Colorado is a costly and complicated task that must b e undertaken by the towns the best way they can, with whatever help they can obtain. 48 ,, .

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APPENDIX I Programs S ummary

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APPENDIX I -Programs Summary ADMINISTERING AGENCY TITLE OF PROGRAM NATURE OF THE PROGRAM A . Federally Funded Programs Housing & Urban Development l)Small Cities Program (Part of Community Develop, ment Bloc Grants) l)There are two types of grants: "single purpose," on e year grants to meet a specific need in areas of housing , deficiencies in public facilities or economic conditions; "compr ehen sive" one to three year program which addresses need in defined areas which bear a relationship to each other and are carved out in a coordinated manner. ELI GIBILITY CRITERIA Grants are given to: l)Units of government with 50,000 or less residents. 2)HUD considers the extent to which the proposed program benefits low and moderate income persons, and ; 4)the impact of the program on problems idenfied by the applicant. 5)The most needy get higher priorities-competition i s fierce, 6)Applicants must show citize n participation in planning, implementation, and assess ment of the program, especially among low and moderate income persons. 7)The applicant must have the capacity to undertake the proposed program. 8)The program must benefit principally low and moderate income persons. TOTAL MONIES AVAILABLE FY 1978 $1 ,649,396 MONIES AVAILABLE IN COLORADO 16 programs $16,123.00 Region VIII 19 80 , $3. 3mi 1-lion Single purpose grant maximum: $375,000 Comprehensive grant maximum: $875,000

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ADMINISTERING AGENCY Housing & Urban Development Housing & Urban Development TITLE OF PROGRAM 2)Urban Development Action Grants (UDAG) 3)Low in come Rent Subsidy (Sec. 8 ) NATURE OF THE PROGRAM Grants to assist "severe-ly distressed" cities and urban counties to revitalize local economies and reclaim deteriorated neighborhoods, through a combination of private and public investments. HUD provides rent subsidies for low income families where the family pays 25% only of their adjusted income and HUD pays the difference between that and the market rate. E LIGI BILl TY CRITERIA l)The private sector's financial commit ment must b e secured prior to application. 2)Applicants must demonstrate ongoing results in providing low and moderate income housing; and providing equal opportunity in housing and empl o yment . 3)Applicants must demonstrate physical and economic distress, including age of housing stock, per capita income, population outmigration, unemployment and job lag -must get HUD approval prior to applying. funding i s based on a reasonable balance of resident, commercial and industrial projects. 5)Grants based on the degree of "physical and economic distress." l)Rentors incomes cannot exceed $10,979. 2)Rents must fall in fair market range determined by HUD. 3)Local authority must be authorized to receive funds. TOTAL MONIES AVAILABLE MONIES AVAILABLE IN COLORADO 1)25% allo-FY 1978 cated for 4 programs small cities $15,129.00 of 50,000 or only Denver less and Pueblo 2 )$400 mi 11 ion certified FY 1978 far As of FY 1977, 169,396 units with 161,581 more units reserved for federal subsidy. so

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ADMINISTERING AGENCY Housing & U rban Development Housing & Urban Development Housing & Urban Development TITLE OF PROGRAM 4)Low income Leased Public Housing 5)Home olmership for Low and Moderate In come Families 6)1-4 Families Home Mortgage Insurance NATURE Of THE PROGRAM '. HUD pays an annual contribution for local agencies to lease private housing to rent-to low income families . Mortgage insurance is provided to commercial lenders against loss on loans to finance the purchase, construction or rehabilitation of low-cos t family housing. ELIGIBILITY CRITERIA Same as above l)The maximum insurable loans are $31,000 ($36,000 in high cost areas). 2)Anyone may apply; displaced households qualify for special terms. HUD insures commercial Any person able to make the lenders against loss on loans cash investment and mortgage for up to 97% of the property payments. value, for up to 30 years, in urban and rural areas. TOTAL MONIES AVAILABLE As of MONIES AVAILABLE IN COLORADO December 31, 1975 163,297 units. Cumulative through September, 1977 837,092 units for over $11 bi1lion• Cumulative through September, 1977 10,212,194 units with value of $ 125 billion. ---------------------------------------------------------------------------------------------------------------Housing & Urban Development 7)Homeownership Assistance for Low and M od erate Income Families HUD insures mortgages and makes monthly payments to lenders to reduce interest as low as 4%. l)The homeowner must contribute 20% adjusted income and make a down payment of 3%. 2)The adjusted income must not exceed certain percentage of local median income. Cumulative through September, 1977 478,553 loans at $8.6 billion.

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ADMINISTERING AGENCY Housing & Urban Development Housing & Urban-pe velopment Housing & Urban Development TITLE OF PROGRAM 8)Multifamily Rentan Housing for Low and Moderate In come Families NATURE OF THE PROGRAM HUD provides mortgage insuranc e to h elp f inance construction r ehabilitation of multi-family rental and cooperative housing. 9)Existing HUD insures mortgages to Multi-purchase or refinance exist-family ing multi-family projects . Rental Housing lO)Multi family Rental H ousing HUD ins ures mortgages made by private lending institutions to finance construction or rehabilitation by private or public developers. ELIGIBILITY CRITERIA l)Sec. 22ld3: HUD insures 100 % of the total cost. 2)Sec. 22ld4: HUD insures 90% of its limited to profit motivated sponsors. 3)Mortgage amounts are controlled by statutory dollar limits per unit to insure moderate construction cos t s . l)Investors, builders or developers who meet HUD regulations are eligible. 2)The project must have at least 8 units and be 3 years old. l)The project must contain at least 8 units. 2)The project should be able to accomodate families at "reasonable rents." 3)Investors, builders or developers, etc., who meet HUD requirements apply to FHA approved institutions. 4)Projects must be in a HUD approved area showing a need for such housing. TOTAL MONIES AVAILABLE Through MONIES AVAILABLE IN COLORADO June, 1977 22ld3 1 32 , 858 units ov e r $1 billion 22ld4 281 ' 7 31 units ov e r $4 billion. Through June, 1977 ll2 projects valued at $ 30 7, 719 , 380 Through June, 1 977 2614 proj ects 282 , 7 8 2 units a t value $3.89 billion.

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ADMINISTERING AGENCY Housing & Urban Develop ment TITLE OF PROGRAM ll) Condo minium Housing NATURE OF THE PROGRAM HUD insures mortgages to privat e len d i ng institutions for the purchase of individual units. ELIGIBILIT Y CRITERI A l)Profit or non -profit sponsor s are elig i b l e to apply. 2)Any "credit worthy" pers on may apply. TOTAL MONIES AVAILABLE Thro ugh June, 1977 6 17 projects with 35,760 units valued at $ 3 30 , 6 4 5 , 30 6 MONIES A VAILABLE IN COLORADO -------------------------------------------------------------------------------------------------------Hous ing & Ur b an De velopment Federal Housing Authority (FHA) Farmers Home Administration (FmHA) l2)Mobile HUD insures mobile Homes home loans by private lending institution s . Mortgage Mortgage l enders are inInsurance sured against loss in financing first mortgages on single family homes and multi-family projects . l)Home Ownership Program Home ownership loans are offered to help families with low and moderate in come s up to 100% of the FmHA appraised value, in "open country and places Hith populations of 10,000 or less, not associated with urban areas." (Loans may b e made in towns with populations of 10,000-20, 000 if the S ecretaries of Agriculture and HUD find there is a lack of mortgage credit). Any perso n abl e t o make the cash investmen t and the mortgage payme nts. Varies by specific program . Most families are eligible. l)The families must be 1\ithout decent, safe and sanitary housing. 2)The family must be unable to obtain a loan from a private lender. 3)The family must have sufficient income to make payment s , insuranc e premium s , taxes and maintenance. 4)The income after deducting 5 % and $300 per child cannot exceed $15 , 6 0 0 . 00 Through January, 1977 over 60,000 loans valued at $580.00 million FY 80 $2,356,267,000 FY 1980 $32,000,000 Allocated on basis of percentage low income

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ADMINISTERING AGENCY TITLE Of PROGRAM Farmers Home 2)Rural Administration Rental (FmHA) Housing Veteran's l)Direct Administration Loans (VA) NATURE OF THE PROGRAl'l Loans made to build, purchase or r epair apartmentstyle hou sing for persons with low and moderate income and those 62 or over in open country and areas to 20,000 . Thi s program ofte n combines with HUD Rental Subsidy (Sec.8) programs. The VA provides direct housing credit assistance to v e terans, service personnel, etc., who live in small towns and rural areas, up to 33 ,000. E LIGI B ILITY CRITERIA l)Family income cannot exceed $11,200. 2)Borrowe r s should have the ability and experience to op erate and manage a rental housing project. 3)Loans made to individual, trusts, a ssociations, partnerships, state, local public agencies consumer cooperatives profit and non-profit corporations. 4)When the financial po sition of the borrowe r reaches the point when he can repay or r e finance through a commercial l e nd er, he must do so. TOTAL AVAILABLE Veterans, unremarrie d widows, Estimate d certain serviceman are elig ible. appropriation for FY 1979 $66,642,000 M ONIES AVAILABLE IN C OLOR ADO $7 , 000 , 000 290 units approved Sec. 8 subsidy throug h April 1978 ----------------------------------------------------------------------------------------------------------------------Veteran's Administration (VA) 2)Guaranteed and Insured Loans are guaranteed to 60% of the total by the VA. Veterans, unremarried widows, Estimate d certain serviceman are eligible. appropriation for FY 1979 $15,992.00

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ADMINISTERING AGENCY Federal Home Loan Bank Board Secretary of the Treasury TITLE OF PROGRAM Corrununity Reinvestment Act (CRA) NATURE OF THE PROGRAM Financial institutions have "a continuing and affirmative obligation" to help meet credit needs of their local corrununities as stated by CR Act of 1977 (CD 1977, Title VIII). National Provide loans to establish Consumer consumer cooperatives. Cooperative Bank-ing Act 197 8 ELIGIB ILITY CRITERIA l)Banks must write a CRA statemen t delineating the "local" corrununity and establishing the uses of credit available. 2)Banks are accountable when audited to ascertain and to meet community credit needs especially in areas of low and moderate income housing. 3)Community involvement in this process is important. l)Impact of cooperative in existing small business. 2)35% loans made to low incom e serving cooperatives . 3)Made only if purposes of l o an not b eing met in the corrununity. 4)Must b e charte r ed, non-profit cooperative, paying dividends within limits established by the bank. S)Allocate net savings to members . 6)Cooperative must be nondiscriminatory in its membership. TOTAL 1-IONIES AVAILABLE 1 97 8 : $ 500 million $75 for t echnical assi stan c e MONIES AVAILABLE IN COLORADO

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Af'MINIS TERING AGI-NCY TITLE O f PROGRAM NATURE Of THE PHOGH A 1 B . State of Colorado Funded Programs Colorado State Division of Housing (DOH) State Housing Development Grants Grants are provided for the r ehabilitation, construction or acquisition of mode s t r ental and owner occupied housing for low income p ersons and households . 1\LlGIBILITY CR lTF'HI A l)Grants are based on the absolute need of the household, their income level. 2)Grants are equally matched from outside sources and that grant can' t include planning o r administrative costs. 3)Grants are made to public entities and private, tax exempt, non-profit corporations. 4)DOH encourages innovation in programs. TOTAL MONIES AVAILABLE MONIES A VAILABLE IN COLORADO l)Small grants $100,000 is the largest . 2)$2,000,000 appropriated in 19 8 0 -1000 units and 3,000 low income peopl 3)50/50 rural/ urban split ---------------------------------------------------------------------------------------------------------------Colorado Department of Local Affairs (energy im-pact monies ) Colorado Department of Local Affairs (energy impact monies) l)Oil Shale Trust Fund 2)Energy Mineral Severance Taxes Monies returned to Colorado from oil leases controlled by the Joint Budget Committee Providing funding to energy impacted communities for locally needed projects l)Projects are requested by communities, prioritized at the local level COG 2)Funds appropriated by legislature in one package each year l)Must be an energy impacted community 2)A local government agency must sponsor the project 3)Must benefit public at large 4)Goes through an advisory committee and decided by director of Department of Local Affairs N / A $63 million FY 80 $6 million FY 81 $9 million

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ADMINISTERIN G AGENCY Colorado Department of Local Affairs (energy impact monie s ) (with FmHa) TITLE OF PROGRAM 2"J "601" Funds NATURE OF THE PROGRAM Loan s made to acquire land for projects. C . Additional Sources of Funds and Aid Colorado Housing Finance Authority (CHFA) Colorado Housing Finance Authority (CHFA) l )Single Family 1-'Jortgage Pro g ram 2)MultiFamily Rental Program Through the sal e of tax exempt bonds , CHFA provides funds, through private lenders, for moderate income single family mortgages. CHFA provides construction and permanent mortgage financi ng for the rehabilitation or construction o f apartment dwellings for low income persons which are HUD ELIGIBILITY CRITERIA Community cannot get money from another source in a "timely manner" TOTAL MONIES AVAILABLE $20 million MONIES AVAILABLE IN COLORADO $ 3 4 mi 11 ion l)The adjus ted income cannot N/A To date exceed $18,500. 2)The applicant must occupy the home as their principle residence; and 3)can own no other property; and 4)can have no more than $6,000 in liquid assets after closing. 5)Applications can only go throu gh participating lenders. l)At least 20% must b e HUD Sec. 8 qualified. 2)Applicants can be individuals, groups or public entities. 1979: 12 new development s , total 742 units $121 million in construction P r $180 million 5 , 600 people became homeowners

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ADMINISTERING AGENCY Rural America Colorado Housing, Inc. TITL E OF PROGRAM Revolving Loan Fund NATURE OF THE PROGRAM Provide funds to rural communities to develop rural housin g projects. Provide technical assistance to tmms wanting to apply for funds -provided with no charge. ELIGIBILITY CRITERI A Not set yet a sincere •need. 2)Show community based support. 3)Write a l etter of agreement defining services needed. TOTAL MON IES AVAILABLE $1 ,000, 000 N / A MOt IES AVAILABLE IN COLORADO As much as can be provided

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nPPENDI X II Le t ter Sent to Towns

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APPENDIX II -Letter Sent to Towns I am a graduate student in Urban and Regional Planning at the University of Colorado-Denver, and I am researching low and moderate income hous i ng in Colorado small towns as an independent study this summer . I have already obtained a great deal of information on the standard federal a nd state programs, and I am no\• looking for information on the actual usage and success of these programs here in Colorado. Even more, I am looking for the details and successes of those programs and approaches developed by town s themselves. Would you please send to me any information you have on your current housing situation to include which state and/or federal programs you are u sing now, and your successes with them? If you have developed your own policies and programs, would you send to me the details of those? What problems are you facing in providing housin g to your resid ents, and how much cooperation are you receiving from the private sector? Any additional housing information you have or anyone else you can recommend that I contact, would also be greatly appreciated. Thank you very much . Sincerely, Linda s . Rubin ,.

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APPENDI X Ill T o w n s Rec e i ving the Original Lette r Othe r Agencies Solicite d

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APPENDIX III Towns Receiving the Original Letter Aspen Vail Basalt Minturn Craig Ouray Breckenridge Silverton Estes Park Telluride Fraser Idaho Springs Georgetown Crested Butte Glenwood Springs Steamboat Springs Other Agencies Solicited S an Juan Regional Commission Grand County Departmen t of Development Longmont Housin g Authority Planning Departm ent Placer County, California ' Colorado Area Council of Governments Northwest Colorado Council of Governments

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APPENDIX IV Responses of Towns , and Counties \

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Questions Asked Towns Glenwo od Springs Telluride Silverton Estes Park Existenc e of a Shortage in Low And Moderate Income H ousing? Yes -average home price $80,000 -Mobile homes being used Yes N o Not clear from their response APPENDIX IV Responses of Towns , COGs and Counties I Kind of Pressure is Being Exerted? Ene rgy impact Recreation impact Recreation impact -Recreation impac t Wha t Programs Being Used? Sec. 8 -elderly Sec. 8 vote d out Too high dens ity -industrial revenue bonds -deed restricted employee housing proposed No N o -housing is provided by the private sector Housing Element In Plan? No 0 Is There a Regional or Coun t y Housing Authority? County authority to be de veloped N o

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Questions Asked Towns Fraser Longmont Aspen Breckenridge Existence of a Shortage in Low And Moderate Income Housing ? Yes Yes Yes Yes Colorado West Yes Area COG What Kind of Pressure is Being E x e r t e d? Recreation impact -land costs Pressure from nearby Boulder Recreation impact Recreation impact Energy impact I What Programs Being used? None -private sector supplying County (Grand) doing Sec. 8 -elderly None -passed ordinance prohibiti ng subsidized housing Individualized: Housing Action Plan None Sec. 8 CHFA FmHA Housing Element In Plan? Proposed Has housing authority Have a housing plan Development code to provide 10\.; and moderate income housing incentives Is The r e a Regional or. County Housing Authority? Grand County Housing Authority-FmHA Sec. 8 -Rehabilitation o f a school for senior hou sing Sec. 8 Ene r gy impact hou sing Tied in with County in all their planning They are the regional housing authority

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BIBLIOGRAPHY

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.. BIBLIOGRAPHY Asp en/Pitkin Housing Task Force. "Ac t i on Plan Report," Asp en, Colorado, April 21, 1980. City Council Of Aspen. Ordinance Number 16, Series 19 80 , (additional dwelling units ) passed June 24, 1980. City Council of Aspen. (70:30 Projects) Ordinance N u mber 20, Series 1980, (Draft for revision). City Council of Aspen . Resolution Number 3 , Series 1980 , (Housing Price Guidelines) January 16 , 1 980. City Council of Boulder. Or d inanc e 4495, passed May 6 , 1980. Code of Federal Regulation s : (on) Banks & Banking, 12 CFR, Parts 25 (Cornptroll r o f the Currency), 228 (Federal Reserv e System), and 5 63e (Federal Horne Loan Bank Board), revised January l, 1980 . Colorado Division of Housing . Colorado Households Needing and Qualifying for H ou sing Assistance, January, 1977 to January 1 , 1982 , March, 1978 . Colorado Division of Housing . "State Housing Development Grants Program Fiscal 1980-81" (Draft). Colorado Housing Finance Authority. Investing in Colorado 1979 Annual Report. Colorado S t a t e Legislature. Colorado Housing Act of 1970. Cracraft, Jane. " Boulder Ordinance Seeks to Assure M oderate Housing," The Denver P ost, May 22, 1980 , pp. 33 . Cracraft, Jane. " Boulder OKs Strict Code on Horne Resale," The Denver Po st, May 23, 1980, pp . l , 16 . Farmers Horne Admini stration. "Home Ownership Loans," Program Aid U977, revised November, 1976. Farmers Horne A d min i s tration. " Rural H.ental Housing," Program Aid Ul039, 1978. Farmers Horne Administration. "This is FMHA," Program Aid 11973 , r evised January, 1975.

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Information in three letters to the author from Gary neardsworth, Ass i stant Tmvn Planner, Telluride , July 7, 1980, July 18, 1980, and October 29, 1980. Interview with Ann Kizzier, Federal Housing Administration, July 15 , 1980 . Interviews with Eugene Gonzales, Office Housing, United States Department o f Housing and Urban Development, June 27, 1980 and November 24, 1980. Interview with Jane Harrington, Colorado Housing Finance Authority, August 6 , 1980 . Interview with Miles Silverman, Housing Planner, City of Boulder, June 16, 1980. Interview with r ancy Smith, Community Re-Investment Officer, Empire Savings and Loan, July 28, 1980, Augus t 4 , 19 8 0 . Interview with P. M . Lobb, Farmers Home Administration, June 26, 1 980 , August 11, 1980. Interview with Susan Rocco, Public Professional Intern, Colorado State Division of Housing, July 23 , 1980 . IntervieH with John Bab b s , Director, Colorado Housing, Inc., November 4, 1980. Interview with Irma Facundo, s . w . Field Office Supervisor, Rural America, N ovember 17, 1980. Interview with Arminta Fernandes, Rural America, November 17, 1980 . Interview with John Maldonado, Director, Colorado State Division of Housing, Novembe r 19, 1980. Interview with Diane McGrath, Planning Specialist, Breckenridge , Colorado , November 4 , 1980. Intervie\.J with Randy Russell, Impact Analyst, Colorado State Department of Local Affairs, November 10, 1980. Interview with Mike Siegel, Energy Impact/ H ousing Specialist, Colorado \.Jest Area Council of Governments, November 20, 1980 . Interview with Susan Sheerah, Housing Specialist, Colorado Housing, Inc., November 17, 19 80 . Intervie w with Ray Wisk e , Federal Home Loan Bank Board , N ov embe r 6, 1980 .

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Federal Register, Vol . 44, No. 124 , Department Housin g and Urban Oev lopment, Community Development Bloc Grants ; Small Cities Program, revised July 12, 1979, pp . 37478-37489. Federal Register, Vol. 44 , No. 167, Part IV, Department Housing and Urban Development, Community Development Bloc Grants , Interim Rul e , Augu s t 27, 1 979, pp. 50248-50274. G aeddert, Beth. "Housing Res ale Profit Limit is Okayed," The Rocky Mountain News, May 22, 1 980 . "Hou sing Aid Plan Vital to Indu stry," The Denver Po st, November 23 , 1980 , p . l2G . Information in a letter to the author from Jolene Vrochota, Assistant Planner, Aspen/Pitkin Planning Office , November 7, 1980. Information in a letter to the author from Diane McGrath, Planning Specialist, Town of Brec k enridge, August , 1 980. Information in a letter to the autho r from Michael L. Siegel, Energy Impact/Housing Specialist, Colorado West Area Council of Governments, September 23, 19 80 . Information in a letter to t h e a u t hor from the Planning Department (unsigned), Estes Park, July 18, 1 980 . Information in a letter to t he author from Frederick G . Fox A.I.C.P., Planning Cons ultant, Fraser, July 16 , 1980 . Information in letters to the author from John N . Fern andez, Planning Director, Glenwood Springs, July 8 , 1 98 0 and July 30, 1980 . Information in a letter to the author from R. Howard Moody, Director, Grant County lepartment of Development and Planning, Octo b e r 24, 1980. Information in a letter to the author from Martha J. Bake r , Acting Executive Dir ector, Longmont Hou sing Authority, August 5, 1980 . Information in a letter to the author from Timothy G . S arma , Town County Coordinator, Silverton-San J uan County, July 15, 1 980 .

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North\.,rest Council of Governments. Guide to Federal and State Hou sing Programs, frisco, Colorado, 1980 . "Panel Urges Changes to Offset Housing Ills , " The Denver P o st, N ov embe r 23, 1 980 . p . 14G. Hubin, Linda s . " The Breckenridge Developmental Code," May 8 , 197 9 . H uck er, George, Hesearch Director. The Geography of Section 8 , Rural America , October, 1978. Rural America. "Isn' t it About Time Someone Spoke Up for Rural America?", March, 1980. U.S. Code Congressional and Administrative News, 95th Congress, second Session, 1978 , pp . 1 303-1350 . u . s . Code Congressional and Administrative News, 95th Congress, First S ession, 1977, pp. 2994 2995 . u.s. Congress. Community Re-Investment Act of 1977 (Title VIII Housing and Community Development Act 1977), Public Law 95-128. u.s. D epartment of Housing and Urban Development. "Fact Sheet: Small Cities Program." Denver Regional Office, March , 1980 (mimeographed). U.s . Department of Housing and Urban Development. "Programs of HUD," (HUD-214-4-PA (3)) November , 197 8 . u.s. Department of Housing and Urban Development. Local Housing Assistance Too l s & Techniques -A Guidebook for Local Government, June, 1979. u.s. Department of H ou sing and Urban Developm ent. Housing for Low Incom e Families, (HUD-392-F (2)) June, 1976.