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Published in the May 10, 2018, edition of the Lyons Recorder.

COMMENTARY: What’s the future of affordable housing in Lyons?

Funding may be an issue for affordable housing on eastern corridor

by Amy Reinholds

A Monday, May 7, workshop with the Lyons Board of Trustees revealed several challenges for an affordable housing proposal on the eastern end of Lyons. Development partners presented an update for a mixed-use proposal that includes an innovative food agriculture business, a commercial kitchen, and 45 rental homes for people who make 60 percent of the area median income. Trustees learned that it would be a struggle for Thistle Community Housing to complete the proposed housing with federal and state low-income housing tax credits and even as much as $2 million of federal disaster recovery funds.

At the regular meeting, the trustees did approve a conditional use application for one more new market-rate rental to be built in Lyons as a carriage house (the 4th legal accessory dwelling unit, or ADU, approved for single-family home zones in town). But as far as affordable rentals subsidized by federal funds, there were no new steps forward Monday night.

Eastern corridor proposal faces challenges

In January, the trustees heard from a partnership proposing to purchase town-own land east of Colo. Hwy. 66 and U.S. 36 for 45 affordable homes for rent (built and managed by Thistle Community Housing), agricultural food production with vertical greenhouses, a farm grocery, and a commercial kitchen. The trustees were supportive of town staff continuing to work with the partnership to gather more info.

At Monday night’s workshop, the Greens group presented an update to the trustees at a May 7 workshop on a proposal. The Greens partners are Donna Merten, who owns a real estate development company and is getting a masters degree from the University of Colorado in sustainable food systems, Paul Tamburello, who runs a real estate development firm and serves on the board of the indoor farm and marketplace GrowHaus in Denver, and Mary Duvall, CEO of affordable housing nonprofit Thistle.

The proposal included an updated site plan sketch with the vertical greenhouses consolidated into one building, more greenspaces between residential buildings, and a plan that could get as many as 52 rental homes (up from 45 in the original proposal), if the Town of Lyons Public Works building was located further to the west, instead of the area zoned municipal now on the northeast edge of the parcel. Another component of the mixed-use development is a lodging. Tamburello said he has spoken to hospitality consultants including people who focus on “Holiday Inn Express-sized lodging” as well as to Chad Fish, who runs Hostel Fish in Denver who like the proposal.

The main impediment identified at the workshop is that it took years to find a site for the town public works building that FEMA will fund as part of the recovery process for the building destroyed in the 2013 flood. Changing the location could put the funding at risk.

And another challenge is that Thistle found the project feasible if a majority of the $4 million in federal Community Development Block Grants – Disaster Recovery (CDBG-DR) earmarked for projects in the Town of Lyons. However, those funds might be committed elsewhere. The “4 percent tax credits” that are part of the federal Low-Income Housing Tax Credit program has a flexible schedule to apply. But it only covers about 30 percent of the costs/equity of an affordable rentals development, and the affordable housing developers must find other sources of funding to make the project work. Thistle was planning on using as much as possible of the other federal disaster recovery funds.

The partners were excited about incorporating a river walk area on the parcel south of Highway 66 in their proposal. However, a complication with that area is the timing of the river restoration process, and decisions that neighboring property owners make about participating in river restoration.

A year ago, the Town of Lyons purchased the former Longmont water treatment plant land east of U.S. 36 from the City of Longmont to use a portion of it as a permanent home for the town’s flood-destroyed public works building and to sell remaining available parcels to buyers who want to pursue uses described in the recent Lyons Primary Planning Area Master Plan. The and has been annexed into town, and the part that is for sale is currently zoned as agricultural land. The town put out the RFP for prospective buyers with development plans in the fall of 2017. The Merten-Tamburello-Thistle proposal is for purchasing all the land that Lyons is selling, on both the north and south sides of the highway (4.3 acres at 4651 Ute Hwy and 3.28 acres at 4652 Ute Hwy).

At Monday night’s workshop, the mayor and trustees were not prepared to give any direction to the updated proposal (and board decisions cannot be made in workshops), but Mayor Connie Sullivan said they could put it on the agenda for the next meeting of the board.

In the past two years, the Lyons Board of Trustees has been trying to find land for affordable housing, to not lose $4 million in federal Community Development Block Grant-Disaster Recovery (CDBG-DR) funds set aside for Lyons. Other federal funds were lost in 2015 when a proposal for using part of Bohn Park to build subsidized, affordable Boulder County Housing Authority rentals and some Habitat for Humanity for-sale affordable homes (a total of 50-70 units) was rejected in a town vote: 498 Lyons voters supported it, and 614 Lyons voters opposed it. However, with $4 million still reserved for Lyons in the years that followed, the trustees have been pursuing several smaller options for housing. Town Administrator Victoria Simonsen told the Trustees at the May 7 meeting that the Division of Housing has committed to allowing a maximum of $100,000 per unit of new affordable homes built in Lyons.

Another proposal for affordable rental homes that has moved as far as as a purchase agreement is with Summit Housing Group for a parcel in Lyons Valley Park. Summit was assigned the purchase and sale agreement to purchase Lyons Valley Park, Filing 8, Tract A from Keith Bell, and completed some due diligence tasks last month. However many more steps are required. Summit won a request for proposals process in March, after a selection committee, including representatives from the Lyons Planning and Community Development Commission (PCDC) and the Lyons Valley Park homeowners association, brought forward two finalists. Summit, based in Missoula, Mt., is a development company that specializes in low-income tax credit and mixed-use developments. It develops and manages rental properties in 6 states, including Montana, Wyoming, Utah, and Colorado, all which include portions affordable to people who make 60% of the area median incomes or less.

One more market rate rental: 4th legal ADU approved by trustees

The Lyons Board of Trustees approved the 4th new accessory dwelling unit (ADU) on May 7, following the town code for mother-in-law apartments or carriage houses on single family residential lots (zoned R-1). The Planning and Community Development Commission approved the conditional use review for a garage apartment at 1024 4th Ave on April 23, and it went to the Board of Trustees for final approval.

The owners are in process of building a primary residence with a storage garage and plan to convert the storage area above the garage into an apartment. There were no public comments on this ADU proposal at the PCDC public hearing, but nearby neighbors were notified as part of the regular process, and one neighbor wrote a letter in support of the application. No neighbors spoke at the public hearing before the trustees on May 7.

According to the application, the proposed ADU complies with all Town of Lyons Sec. 16-10-70 Accessory Dwelling Unit requirements, including that the owner will occupy the principal residence while the ADU is rented, and there will be no short-term vacation rentals on the property.

A process for adding accessory dwelling units (ADUs), small carriage houses, mother-in-law apartments, or garage apartments to single family home residential lots has been shaped in the Town of Lyons during the past few years, aiming to encourage more rentals in town at lower costs because of the size, but still at market rate. The Lyons ADU ordinance (available at http://www.townoflyons.com/566/Accessory-Dwelling-Units) allows small apartments or carriage houses to share utility connection fees with the main house (saving homeowners $20,000-$40,000 in construction costs). Homeowners of ADU properties must rent for periods of 30 days or longer (for example, at least a month-to-month lease), and cannot use their properties for short-term vacation rentals.

These approved plans for four new legal ADUs will add four more market rate rentals to the Town of Lyons, but as the rental market increases, those rents will likely increase as well. Although it’s good to see a few more smaller, lower-cost rentals will be available as a piece in the puzzle, the affordable housing need in Lyons won’t be solved by market rate rents or mother-in-law apartments. And the Town of Lyons has not set up a plan for bringing the 20 or more known non-conforming, existing carriage houses and garage apartments on R1 parcels into compliance of the ADU policy. When the ADU ordinance was approved for single-family zones in the Town of Lyons, bringing in existing out-of-compliance older homes to the program was intended to be part of the plan – so renters have safe homes that fire protection officials can find and that follow the other important requirements of the program like owner/landlord occupancy on the property and at least month-to-month rentals, instead of short-term vacation rentals.

The Town of Lyons lost about 76-94 flood-destroyed homes in the 2013 flood. To get an accurate number of housing stock lost in the September 2013 flood, there are two ways to count. First, according to counts of Town of Lyons water taps/customer accounts, 94 customer accounts were lost after the flood (taking into account the 32 homes in Riverbend Mobile Home Park that were originally part of one water tap). However, some of those customer accounts were on Apple Valley Road (not in town limits), and some lots in town have more than one water tap/customer account. A second way to count is the number of flood-damaged homes in the Town of Lyons lost to both the federal buyout programs and to the changed use of the Riverbend Mobile Home Park property to an event venue (rezoned for commercial use), which totals 76 lost residential units. Federal buyouts totaled 44 units – including all residential units in the Foothills Mobile Home Park – and there were also 32 families who lost homes in the Riverbend Mobile Home Park, which was rezoned as a commercial wedding and lodging venue after the flood.

This column is a weekly commentary (opinion column) in the Lyons Recorder about affordable housing after the September 2013 flood disaster in Lyons. If you have any questions, comments, or complaints about this column, please contact me directly at areinholds @ hotmail.com. For a history of post-flood efforts for affordable housing in Lyons, you can read previous columns from both Lyons-area newspapers posted on my blog at lyonscoloradonews.wordpress.com.