SCEDD Housing Project for Southeast Colorado

The housing shortage in southeast Colorado is critical and a center point for future economic development in this region.  Without adequate housing, prospective employers will pass on a community where there are no homes or apartments for employees.

SCEDD, Southern Colorado Economic Development District and SECED, Southeast Colorado Enterprise Development Incorporated have joined forces to provide as many as 60-70 new houses and duplexes in the six counties served by SECED.  At present, the houses, which will be built on a pre-paid program, will be intended for workers deemed essential by their communities in Prowers, Baca, Bent, Kiowa, Otero and Crowley counties.

Michael Yerman of SCEDD and Stephanie Gonzales from SECED have been meeting with municipal leaders to get a determination on how many properties each community can offer to the program.

Gonzales attended a recent PEP, Prowers Economic Development board meeting in Lamar as she outlined the steps needed to address the housing shortage.  She explained the properties can be owned by a city or county or purchased outright, but they would be best suited to provide needed infrastructure in the areas highlighted for development.

“We’re planning on two-to-three-bedroom houses and duplexes which would be priced between $150,000 and $199,000 with potential add-ons the owner would pay for such as an attached garage or rear patio.  They’ll pay the price of 80% of AMI, area median income based on household size or income, but the program can exceed up to 140% AMI for a $150,000 priced home.

The houses would not be built on spec, but would be pre-paid to eliminate financial risk to a developer and local contractors.  The program is calling for bids from serious developers, who, she said, would be paid for their time in developing a working, customized plan.  “We don’t want anything that has been sitting on a shelf,” she explained.

Some towns already have employers that have expressed an interest in buying the homes and renting them to employees such as Cove Civic in Bent County and Crowley County has indicated a need for ten for their prison workforce.  Gonzales explained that by stimulating the housing market, developers will continue to build in all six counties, separate from the program.  Forty properties are needed to initiate the project which is being held to only 70 total in the first phase of the program due to cost considerations.

Granada has a need for six properties, Wiley has recommended five to start and Lamar is considering from seven to eight, but has already earmarked some funding for another project.  The city council is deliberating alternatives.  With the go-ahead, once a developer has been selected and designs approved by October, ground-breaking can start in March 2022 and be completed by February, 2023 according to a feasibility study.

Gonzales said communities will have three-month window to advertise these new houses to their essential workers, such as those in education or the medical field who could have first choice and then each community can decide when they want to open the homes to the general public.  She said local lenders would also offer insight to prospective home-buyers who are eligible for a loan.  The property will be transferred to SECED as security the developer once construction begins and building permits will also be taken care of to assist the developer and contractors.

Gonzales explained that as the funding stems from the American Recovery Act, no community will be asked to pledge more than 8.5% of their total allowance from the federal funding to balance the payments.  As an example, Lamar would fund the project at $105,000 to meet the six-county goal of $550,000 while Wiley would only need to contribute $3,700 or Granada at $4,800.

By Russ Baldwin