In The Press

Read the entire story at the Lone Tree Voice.

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About those rising home prices: In Phoenix — hit hard by the housing meltdown, prices were up more than 16 percent in July. In Detroit, they jumped more than 6 percent. And in Denver, prices were up nearly 5.5 percent. All of that are good news for the folks who are keeping up with their mortgages. But people facing foreclosure are running into a new problem. Nationally,the availability of rentals is now at its lowest rate since 2001. When John and Gina Burnett bought their home 10 years ago in suburban Denver, they thought they would spend the rest of their lives here with Gina’s son, Keith, who has Down’s syndrome. But John lost his job three years ago in the construction industry. “What happened to all the jobs?” John asked. “Where did they go?”

Now they face losing their house to foreclosure, and for them an unplanned transition from homeowner to renter. “It’s very hard. It’s painful,” said Gina. “It’s frustrating.” She acknowledged that is not all the way the American Dream was supposed to come out. “We’ve done everything that we possibly to keep this from happening. ” And as more foreclosed families need apartments, they are driving up demand and prices. Nationwide vacancy rates hit a 10-year low in 2011, and rents increased 4.7 percent since last year. “At one apartment,” said Gina, “it would cost approximately $3,000-$4,000 just to get into the apartment.” She added that she doesn’t have $4,000 and doesn’t know what they’ll do.

Ron Throupe, a Denver real estate economist, said it will take at least two years for new construction to ease the tight apartment market, and much longer for foreclosed families to buy another home. “They lost their equity so they’re going to have to save in order to buy a new home someday.” Throupe. As for how long it would take for them come back and do that, he said, “Likely 5 to 7 years.” Gina is 51, John is 60 — ages when life should be about the good days ahead. “At this age, we should be looking at retirement. And that’s really hard,” said Gina.

Instead, the Burnetts are looking for an apartment. They know that the longer it takes, the higher their rent may be.

http://www.cbsnews.com/8301-18563_162-57520239/once-happy-homeowners-now-reluctant-renters

By Jennifer Oldham

Six years after the housing crisis hit Colorado, Claire and Alan Pegg are at risk of losing their home in the Denver suburb of Brighton. Left without an income after their tree farm failed, Claire says she isn’t sure her family will be able to keep the ranch-style house they’ve owned for eight years. “We have no savings and nothing to fall back on,” said Claire, a 39-year-old mother of two who does voiceover work by day and waits tables at night. “If things go well for a few years we’ll get back on our feet, but if anything else happens we’ll be out.” While housing prices in the Denver area bottomed out last year and are now posting modest gains, thousands of homeowners are still trapped in homes worth less than they paid, and foreclosures continue to sap property-tax revenue in hard-hit Denver suburbs, forcing the state to raise its share of funding for public schools in those areas and statewide. The same factors are putting pressure on state governments and school districts nationally, as the lingering effects of the housing crisis are expected to chill property-tax collections into next year and beyond. That’s because home prices remain far below pre-crisis levels, and reassessments raising taxes lag behind upticks in property values by as long as three years. “Property-tax revenues are projected to be essentially flat at the national level,” said Tony Yezer, a professor of economics at the Elliott School of International Affairs at Washington-based George Washington University. “That means in real terms, adjusted for inflation, they are down. That’s very unusual.”

Stagnant property-tax revenue in states hardest hit by the housing crisis are forcing lawmakers to use general-fund money to prop up local school districts. In Florida, a 3.6 percent drop in property-tax collections in fiscal 2013 led the legislature to allocate an additional $247 million in state funds to its 67 county school districts. In Nevada, where property-tax revenue is down 24 percent from the assessed value’s peak in 2009, legislators used $111 million in lodging taxes to shore up basic support for the state’s 17 districts and increased a sales tax dedicated to schools by 15 percent. Nevada is the only state in the country in which net homeowner equity is negative, meaning that in the aggregate, every house in the state is worth less what owners owe, according to data compiled by CoreLogic Inc. In Arizona, where a district’s bonding capacity is set at a percentage of its property values, some districts are unable to issue more securities until they pay down existing debt, or their assessed real estate values improve.

“We have $71 million in voter approved bonds that we can no longer access,” said A. Denise Birdwell, superintendent of Higley Unified School District in Gilbert, Arizona, about 22 miles (35 kilometers) southeast of Phoenix. “We are a growing district with approximately 650 new students yearly. We will have five schools over capacity next year with no ability to build.” In Colorado, the decline in property-tax revenue, coupled with a falloff in sales and income taxes, meant schools got $1 billion less than they needed to cover expenses over the past four years, Leanne Emm, assistant commissioner of public school finance for the Colorado Department of Education, said in an interview. Foreclosure sales in Colorado fell to 19,600 in 2011, down 22 percent from a peak of 25,054 in 2007 and the lowest level since the housing crisis began in 2006, according to data from the Colorado Division of Housing. Housing prices in the Denver metro area, meanwhile, rose 3 percent since last September and are down 8.5 percent from their peak in March 2006, according to the S&P Case-Shiller Index.

In four of the Colorado counties hit hard by foreclosures –Denver, Douglas, Adams and Arapahoe — the state expects to contribute $39.4 million more in fiscal 2013 than it did a year earlier to counter plunging property-tax revenue and assist with rising per-pupil counts. The extra state contribution in those counties isn’t enough to compensate for the decline in revenue since the recession began in 2007. “We’re underfunding schools by over $1 billion this year,” Emm said. “Nobody is generating enough money to fully fund the needed increase year over year in school finance.” Arapahoe is among the counties struggling to cope with the declines in tax revenue. In the county’s Deer Trail School District, home values plummeted 24 percent last year, forcing the school superintendent to do the jobs of three people.

“We’ve saved costs by me absorbing the principal position,” said Superintendent Robin Purdy, who runs Deer Trail’s single school, which serves 147 students in kindergarten through 12th grade. “I will probably take on the athletic director position next year,” added Purdy, whose office is about 54 miles southeast of Denver. “What’s next? Mowing the lawn?” Given its declining home values and student population, Purdy’s tiny district is expected to suffer the state’s largest drop in per-pupil funding between fiscal 2012 and fiscal 2013 — $179 per student, according to an analysis conducted by the Colorado Department of Education. Blame for Purdy’s dilemma rests on Arapahoe County’s continuing wave of foreclosures — the highest in Colorado in 2011, said Tom Thibodeau, academic director of the University of Colorado Real Estate Center. “A high incidence of foreclosure actually dragged down the market value of properties through entire neighborhoods,” he said. “I suspect we’ll continue to see declines in assessed values for the next year or two before prices in places like Arapahoe County level off.”

While housing prices may rise in the coming fiscal year, it won’t compensate Colorado for the costs of the housing collapse, Henry Sobanet, director of Governor John Hickenlooper’s Office of State Planning and Budgeting, said in a telephone interview. “Right now, a little bit of growth is expected in 2012-2013, but I don’t think we’re close to making up the losses from during the down years,” Sobanet said. “The effects of the recession can linger.” The impact of declining housing values on Colorado’s state budget and county school districts is surfacing now because counties assess real estate values every two years. “Much of the deterioration of the real estate market and the economic downturn had not yet occurred by June 2008, the reappraisal date for the 2009 assessment year,” wrote Colorado’s nonpartisan Legislative Council in its December 2011 revenue forecast. “The 2011 assessment year captured much of the decline in value that occurred during the recession.”

The foreclosure struggle of the Peggs and thousands like them caused the market value of Colorado housing to fall 9 percent in 2011 to $488.3 billion from $536 billion, according to the Colorado Division of Property Taxation’s 2011 annual report. The decline marks only the second time in almost 30 years that residential values dropped. For many Colorado homeowners, the lingering housing crisis continues to depress home values, causing them to owe more than their houses are worth and putting them at risk of foreclosure. Realtor Marilyn Allen, 66, is $55,000 in arrears after she stopped paying her $2,200 mortgage in November 2009 when her business declined. “I couldn’t keep going, I stripped my home equity lines and I was in debt up to my ears,” said Allen, who’s filed paperwork for a loan modification 10 times with her lender and faces an Aug. 1 foreclosure sale of her 2,600-square-foot home. With her home worth 30 percent less than the $405,000 she paid for it in 2004, its assessed value and property tax collections are also likely to fall next year — bad news for Arapahoe County schools and the state budget.

http://www.bloomberg.com

Douglas County latest casualty of market in Q1

Foreclosures. They’re not just for low-priced homes anymore.

Douglas County, one of the richest and fastest-growing counties in the nation, is seeing on average one $1 million home go into foreclosure each week.

“I haven’t seen any $2 million homes yet, but I definitely have seen homes pushing $1.5 million,” said Dianne Bailey, the Douglas County public trustee.

She said that the homes are mostly speculative – those built without buyers – constructed by custom-home or larger builders.

“These are typically developer-built homes that have never been sold,” she said. “They are not typically owner-occupied homes.”

It’s not just Douglas County where expensive homes are going into foreclosure. Bailey noted that none of the homes in last year’s Parade of Homes in Arapahoe County has sold, and one is in foreclosure.

Bailey said most of the houses entering foreclosure in Douglas County are in the $300,000 to $350,000 range, while in the past they had been in the $250,000 to $300,000 range.

Bailey blamed adjustable rate mortgages moving upward for the increase in expensive homes going into foreclosure.

In the first quarter, foreclosures in Douglas County jumped 78 percent, the largest increase from the same period a year earlier, according to a report released Thursday by the Colorado Division of Housing.

There were 665 foreclosures in Douglas County in the first quarter, compared with 373 a year earlier.

Statewide, foreclosure filings were 23 percent higher during the first quarter of 2008 compared with a year earlier, according to the division.

Overall, 11,630 new foreclosures were filed during the first quarter, compared with 9,443 for the same period last year. There were 39,915 new foreclosure filings reported during 2007.

That equates to one foreclosure filing for every 159 households. Adams County had the highest foreclosure rate with one foreclosure filing for every 86 households, while Weld County showed one foreclosure filing for every 102 households.

Mike Rinner of the Genesis Group, which tracks housing along the Front Range, said he isn’t surprised that expensive homes in Douglas County are increasingly being foreclosed on.

“The lower end of the market is still the most hit by foreclosures,” Rinner said. “But if you can’t sell your lower-end home, it puts you at a disadvantage to move up. It means there are not as many new-home buyers. It’s a reverse snowball effect, if you will. Or a trickling up of bad news, instead of a trickling down of good economic news.”

He noted that when a home just begins the foreclosure process, the owner, not the lender, can still try to sell it.

“Any good broker will tell you that if a home is priced right, it will sell,” Rinner said.

He said some builders may have been trying to sell a house for $1.2 million that cost them $900,000 to build and until the foreclosure were unwilling to budge on the price.

“The lender starts the foreclosure to protect itself, and the builder gets a reality shot,” Rinner said.

Independent broker Gary Bauer also said he isn’t surprised that more expensive new homes are going into foreclosure.

“Builders who have been trying to scrape by are now getting caught,” Bauer said.

Statewide, foreclosures likely will continue to rise this year but not as rapidly as in past years.

According to the housing division study, foreclosure filings for 2008 are likely to be 15 percent higher than record 2007 totals. Foreclosure filings increased 30 percent during 2006 and 40 percent during 2007.

“We’re glad to see a break in the rate of increase in new foreclosures opened,” said Kathi Williams, director of the Colorado Division of Housing and co-chairwoman of the Colorado Foreclosure Prevention Task Force.

“What we’d really like to see is a drop in the total number of new foreclosures this year. However, adjustable rate mortgages will continue to reset through 2009, and the cost of living looks like it will continue to increase this year. That will likely mean we won’t see any drop in foreclosure numbers this year.”

rebchookj@RockyMountainNews.com or 303-954-5207

By: Rhonda Moore, Staff Writer

Whispers about a coming recession began in one industry widely considered the benchmark of economic indicators – the housing market. With home sales down, prices stalled in markets from coast to coast and new starts at a standstill across the Front Range, Colorado is no stranger to the effects of the housing crunch.

And hand-in-hand with the housing fallout is the most dreaded f-word of all – foreclosure.

Ranked fifth in the nation in foreclosures, Colorado’s public trustees in March 2008 saw 3,954 public notices for foreclosure, according to RealtyTrac.com, a company that tracks foreclosure statistics across the nation. That same month, 2,191 properties were listed as bank-owned properties – a slight decrease from the previous month for the state, but part of a 57 percent increase in nationwide foreclosures from the same time last year.

In Douglas County, public notices for foreclosures during the four-week period ending in mid-April increased 28 percent. For a county where the median household income increased 5 percent between 2005 and 2006 and demand for emergency housing assistance at a steady rise, the numbers are part of what one public agency calls “the perfect storm.”

In Arapahoe County, the public trustee’s office posted 6,225 foreclosures in 2007 and is facing a year-to-date increase of more than 60 percent. Publicly-noticed foreclosures through March 2007 were 1,151; the number of foreclosures published through March 2008 is 1,851.

The foreclosure storm chasers in Colorado comprise an array of public agencies primed to assist homeowners who are either in foreclosure or at risk of foreclosure.

Colorado Attorney General John Struthers began the mortgage consumer fraud task force, providing foreclosure prevention forums, housing counseling and foreclosure and homeownership counseling through its foreclosure prevention hotline.

The County of Douglas joined the fight with a foreclosure mediation program offered since July 2007 through the Douglas County housing partnership.

The agency in the past has provided housing and emergency assistance to low- and moderate-income residents, but with 1,642 foreclosures filed in the county in 2007, finds the demand for assistance with foreclosure at an all-time high. The agency anticipates the county is on track for about 2,500 foreclosure filings in 2008, said Travis Anderson, single family programs manager.

The foreclosure mediation program provides counseling and mediation services to homeowners who are facing foreclosure and May 6 will begin bi-monthly foreclosure workshops free to the public.

The program guides clients through the process of contacting the lender to attempt to mediate a payment plan, providing assistance with phone calls, review of payments, hardship letters and other correspondence, much of which is beyond the client’s scope, Anderson said. The ultimate goal is to restore the loan to a healthy balance or assist with an arrangement to help keep the foreclosure off the client’s credit record, he said.

In some cases, an arrangement could be a short sale or simply walking away from the house and signing the deed back to the lender.

Regardless of the final solution for foreclosure clients, from the moment they pick up the phone to make the first call for assistance, time is of the essence.

“We would love to get people even before they go into foreclosure – maybe when they’re one month or less than two months behind,” Anderson said. “The sooner they come to us, the better position we are in to work with the lender.”

About half of those who contact the foreclosure mediation program are players in the “sub-prime” mortgage market which included adjustable rate mortgages that adjusted at nearly double the original interest rate, stated-income mortgages where the lender did not verify the borrower’s income and other “bad loan decisions” on the part of the borrower and the lender which boiled down to borrowers who simply “bit off more than they could chew,” Anderson said.

The other half of the program’s clients face a life-changing situation such as divorce, job loss, health issues or a simple shortfall in the face of the rising cost of living, he said.

Most clients who call the foreclosure mediation program do so only at the end of a long, embarrassing and, in many cases, secretive road with no end in sight. Many callers are timid or nervous and are making their first phone call for help, Anderson said. Most have yet to share their “f” secret with a family member and in some instances, the caller declines a return phone call. A phone call to the family home might tip off a spouse who still is in the dark.

“As you can understand, it’s a very private situation,” Anderson said. “It’s very personal.”

Regardless of where the finger-pointing begins or ends – whether taking into consideration the homeowner who loses grip on the American Dream or the lender left holding an asset worth a fraction of the loan – the one paying the highest price for the foreclosure twister is none other than the American taxpayer, Anderson said.

The county’s housing partnership oversees $800,000 each year from the division of housing and urban development for foreclosure mediation, down payment assistance for qualified individuals and emergency housing needs, said Jennifer Eby, community development block grant administrator. Requests for emergency housing assistance increased about 15 percent from 2006 to 2007, Eby said.

“I know from talking with service providers the amount of clients coming to them is increasing rapidly,” she said. “It’s a basic shift in the economy. I think the issue is the downturn in the economy and increasing costs – everybody across the board is starting to feel it now … you have a lot of people having a hard time making ends meet and they have to go to these agencies for assistance.”

In the foreclosure mediation program, the full-time position and foreclosure workshops are courtesy of a $75,000 federal grant, part of $150 million in taxpayer funds earmarked to fight the foreclosure fallout, he said.

“It’s like the perfect storm. The credit crunch combined with the economy, lenders willing to make any kind of loan …” Anderson said. “I would almost say the borrower [pays the highest price, but] unfortunately what’s happening is the government has to step in and at end of day it comes back to the taxpayers.”

The Douglas County housing partnership foreclosure mediation workshops begin at 7 p.m., May 6 and May 20, at 9350 Heritage Hills Circle in Lone Tree. Workshops will take place the first and third Tuesday of each month. For more information call 303-784-7857

303-663-7162 | rmoore@ccnewspapers.com.

© Colorado Community Newspapers 2007

It’s easy to assume that the nation’s richest counties dot the tri-state area around New York City, or San Francisco’s Bay Area. Homeowners there, after all, shell out millions of dollars for small luxuries such as a lawn and a garage.

But while affluent areas such as Nassau County, on New York’s Long Island, and Marin County, just north of San Francisco, boast well-off residents, the nation’s wealthiest live in the D.C. suburbs.

Fairfax County, Va., Loudoun County, Va., and Howard County, Md., top the list of America’s richest counties, which we based on median household income data from the 2006 census. In Fairfax, that number reaches $100,318 a year; Loudoun households pull down a livable $99,371 a year; Howard residents follow at $92,260.

Yet D.C. is not generally regarded as a center of wealth. What about the billions handed out in bonuses to Wall Street execs, or the seemingly never-ending stream of Silicon Valley-based tech billionaires?

Those factors have an impact on the ranking, helping drive New Jersey’s Hunterdon County and California’s Santa Clara County, near San Jose, to Nos. 4 and 17, respectively. But we are not measuring what the extremes earn, only the middle. Except for Santa Clara, none of the richest counties we found are in cities that contain some of the country’s most expensive homes, which only a select few can afford. Instead, suburbs are where most of the country’s money goes to live.

“The general process of suburbanization is, the richer you are, the more likely you move to the suburbs,” says Julie Martin, a senior demographer for the Weldon Cooper Center for Public Service at the University of Virginia.

In the case of Washington, D.C., she says that well-paid government employees, and the area’s lobbyists, lawyers and other tangential personnel, are “suburbanizing like mad” and in doing so have created a “feedback loop,” driving more money into the area’s suburbs by populating them with higher-priced homes and better school systems.

This often results is significant income differentiation among neighboring counties. In Forsyth County, Ga., for example, the median household earns $83,682 a year, about $33,000 more than Fulton County, its immediate neighbor. The more a county becomes an established bastion of wealth, the more residents from the surrounding areas want to move there, driving up prices for homes and creating superior tax-based services.

Income Issues
Money creates its own set of problems, however. The most straightforward example: High home prices, and the subsequent boon to tax collectors, mean money for schools but often a paucity of teachers, as educators often cannot afford high home prices.

While an influx of high-earners might fortify an area, money managers and corporate lawyers still need people to teach their kids, and firefighters and police officers to protect them. To make sure these civil servants can live where they work, counties filled with posh suburbs need to provide affordable housing for those who couldn’t otherwise live there.

Consider Douglas County, Colo., just outside Denver and No. 5 on our list of richest counties. It offers below-market interest rates as well as interest-free, five-year, payment-deferred loans of $20,000 to teachers, firemen, and policemen. The county also incentivizes builders to offer those buyers $5,000 discounts on home prices, or to waive closing costs.

Sounds fair, and it might even have a silver lining in this market.

“The home sales market isn’t what it was,” says Wendy Holmes, a Douglas County spokeswoman, on the housing downturn. “But these incentives are helping to move homes, especially for workers that service everybody.”

© 2008 Forbes.com LLC™

By Kiersten J. Mayer, Staff Writer

Recovering from a car accident and domestic violence, Freya Collins is now struggling with the task of finding affordable housing in Douglas County.

The Highlands Ranch resident is a make-up artist and stylist and a single mother with a teenage boy. She wants to keep her son in Douglas County schools.

Collins has been looking for housing since May. She is living in her ex-boyfriend’s house, but it’s in foreclosure.

She and her son moved into her ex-boyfriend’s big three-story house to give her time to recover from one of two automobile accidents. She needed to heal and needed a good school for her son. But after a recent violent dispute, her ex-boyfriend was arrested and charged with her attempted murder, kidnapping, child abuse and more.

Now it is vital for her son to stay in his school, she says. He’s getting great grades and he loves his friends. She doesn’t want to uproot him after all he’s been through. The teachers and the curriculum are good for him, Collins said.

There would be nothing more tragic than taking that away from him, she said.

If she can’t find an affordable place to live, her son is going to have to live with his aunt in Highlands Ranch so he would be able to stay in school.

“Which is horrible because these are the last three years I have with him before college,” she said.

For her part, Collins feels safe in Highlands Ranch. It’s quiet. When she goes to downtown Denver, she quickly gets overwhelmed.

The trouble with housing

Collins is one of many Douglas County residents who struggle to find affordable housing.

A house in Highlands Ranch will cost about $1,200 a month to rent, she said. And she has no idea when the foreclosure will be final.

“There’s absolutely no HUD housing out here,” she said. “There’s absolutely nothing in Highlands Ranch I’m going to possibly be able to afford.”

The median sale price of a house in Douglas County is about $330,000 and rentals average to $800-$900 a month for a one bedroom, said Jeff Watson, Douglas County assistant director of community services.

Douglas County’s cash in lieu of affordable housing program will allow the Douglas County Housing Partnership to build affordable rental housing where it’s needed.

The biggest need is for people and households earning 50-80 percent of the area median income.

“The intent is to try and target that group with regard to supporting affordable housing or what you could call workforce housing,” Watson said.

Not only service and retail employees, but teachers, firefighters, police officers and some hospital staff could qualify, he said.

“They’re providing an important service and can’t necessarily afford to live here at strictly market rates,” he said.

In Denver, Collins could find a 750-square-foot, three-bedroom apartment for $695 a month.

At the beginning of her search in Highlands Ranch, she was hopeful she could find something. Now she’s starting to wonder if she and her son are going to have to move into a studio apartment for $800 a month.

“Do they even have studio apartments out here?” Collins said.

Craig Maraschky, executive director of the Douglas County Housing Partnership said there is a demand for roughly 200 units of additional rental housing each year.

If there are rental apartment buildings for sale, his agency investigates a possible purchase.

“But because those [properties] have been built in the last 10 years, the cost is prohibitive,” he said. “They were built as market rate rental housing, and that’s not what we do.”

Combined with competing for existing rental units is the prospect of building new apartment units in Douglas County.

“You’re looking at costs between $160,000 and up per unit to build new rental units,” he said.

That includes cost of land, attorney services, permits, design and construction, impact fees, interest costs by lenders and consultants’ fees, he said.

“We compete for land like anybody does,” he said. “We have to pretty much pay market prices for the land.”

Another difficulty is finding land in the right place. Affordable rentals have to be where there are jobs for those who need them, in urban parts of the county like Parker and Castle Rock.

A jump start

Federal money makes up 75 percent of the $3.4 million the housing partnership has raised to provide affordable housing, to Douglas County residents who are in need, over three and a half years, including the purchase of the Oakwood Senior Housing complex in Castle Rock. The remaining 25 percent in local money comes from corporate donations, small fees from developers and contributions from Parker, Castle Rock and Douglas County for general operations.

The housing agency’s major financing mechanism is the federally funded Low-Income Housing Tax Credit Program. Corporations that pay a lot of income tax can soften that blow by buying a tax credit to invest in affordable housing.

However, the program is very competitive and agencies like the Douglas County Housing Partnership have to be ready to proceed with architectural design, a contract to buy the land, Maraschky said.

“It probably takes $125,000 to get to that point,” he said.

In addition to trying to provide rentals, cash in lieu fees will be used for down payment assistance for people to buy homes.

Douglas County community development officials are proposing a program that might help alleviate the problem in the future.

Staff has worked with a number of developers who were required to build affordable housing for qualified people such as service and retail workers, Watson said.

And while that requirement hasn’t gone away, community development staff took another approach to get cash instead.

Developers will be able to pay a fee instead of building affordable housing, which goes directly to the partnership to build and keep attainable housing in Douglas County, Watson said.

Representatives for Canyons South, a development northeast of Castle Rock agreed to pay a total of $874,000 instead of building affordable housing. The first minimum payment will be $260,000 and Canyons South representatives anticipate making that payment this fall.

Being able to pay cash instead of having to build affordable units was the real bottom line for Douglas County officials and for Canyons South developers, said Don Hunt, project adviser for the Canyons South development.

It was a matter of location, the lack of transit access and the nature of the project, a golf club community.

“It’s hard to incorporate attainable housing into that sort of setting,” Hunt said.

Making cash payments instead of requiring developers to build is a long-term solution.

“It’s a tool in the box of affordable housing,” Maraschky said. “This is not an instant solution to the problem. It’s a step in the right direction, but it will provide benefits in the long run.”

Falling through the affordable housing gap

Because the house she’s living in isn’t in her name, 32-year-old Collins has no idea how long she has until the foreclosure will be complete. She has worked her whole life, but her ex-boyfriend took care of the bills and the finances.

She has her bad days, still recovering from injuries she suffered when he choked her and threw her all over the house, she said. All the physical therapy she went through for the second auto accident was undone.

She lives now on medication and is always in pain. If she doesn’t take her medication, she’s a mess. She has filed lawsuits for the car accidents, neither of which were her fault, she said.

She suffered disc injuries in her neck, which has affected her ability to use her hands. She is starting to back to work as a make-up artist and stylist, but it’s physically difficult for her, and she’s displaced and can’t be completely reliable.

She just lost her Internet service, which her son needs for school and she needs to find housing. There is no car and she won’t be able to get one until at least one of her lawsuits is settled. She has to replace all of her cosmetics.

Collins is upbeat and strong in spirit, and doesn’t seem to have fallen into a victim mentality. But she has physical limitations.

She can only stand, and use her hands, for so long. Some days she doesn’t know if she’s going to wake up because of the injuries to her neck. Sometimes her vision will go in and out. She suffers from post-traumatic stress disorder, she said.

Collins recently qualified for Medicaid and is hoping to go back to physical therapy.

She’s been trying to work and provide a decent life for her son and has a lot of help. She understands that her state in life right now is only a temporary thing.

“My family and friends are so supportive,” she said. “My son is awesome. He’s the coolest person on earth. He goes with the flow. We have a really strong bond.”

She also has a team of doctors she sees, including a psychologist, a psychiatrist and a neurologist.

Collins was looking on the Internet by putting in her available income to find something she can afford. She has just started to go to agencies in Douglas County that can help her find a place.

She worries that the things she has collected over the years that have sentimental value to her and help her stay connected to who she is; they will either have to be sold or put into storage.

“I’m very hopeful there will be something, somewhere, by the glory of God someone, someplace, will be able to find us [something] out here,” she said.

Contact Kiersten J. Mayer at 303-663-7174 or kmayer@ccnewspapers.com.

© Colorado Community Newspapers 2007

The middle class often can’t afford the market, but a partnership aims to stem the exodus.

By Joey Bunch
Denver Post Staff Writer

Greenwood Village – For John Purchio, the American dream of home ownership was just that – a dream. The single 50-year-old could not afford a home near his job as a grade-school custodian in Highlands Ranch.

And despite a record of employment and good credit, he was squeezed out of the home market in most of south metro – like countless middle-class workers, housing advocates say.

“I know a lot of teachers in the same boat,” Purchio said last week, as he prepared to move into a condo in Parker made possible with the help of the Douglas County Housing Partnership.

While north Douglas and south Arapahoe counties make up one of the country’s wealthiest and fastest-growing communities, that opulence is driving up home prices and driving out its middle-class workforce.

Rent in the region is no bargain, either, on average $1,100 for a two- bedroom apartment, according to the partnership.

“It’s the quiet crisis,” said Craig Maraschky, executive director. “But I think we’re going to have to be talking about affordable housing for a long time to come.”

Government programs are trying to stem the exodus with down-payment assistance and subsidized communities.

If not, Maraschky said, every new restaurant or store in these high-priced housing markets means highways clog with more commuters, or businesses will struggle to find affordable help.

Maddy Crowell, a 45-year-old retail clerk at Park Meadows mall, already commutes nearly an hour each day by bus and light rail to and from downtown Aurora.

“People are strained to pay for a car, strained to pay for gas, strained to pay for insurance,” she said. “I wonder all the time what people do for a living to afford to live in Lone Tree.”

Arapahoe and Douglas counties are even helping build affordable apartments.

Last month, MBR Development Co. broke ground on the second phase of Lincoln Pointe Lofts in the Meridian Office Park. With the help of tax breaks and other incentives from Douglas County, MBR will add 88 apartments to the 133 that opened in 2004.

This year, the same developer opened the 104-unit Prentice Place Lofts in the Denver Tech Center, which filled up quickly with restaurant and office workers, MBR partner Tim Roble said.

Rent starts at about $600 a month in each community, limited to those who earn $35,850 a year or less. In Greenwood Village, per-capita income is $80,188, according to the city.

Arapahoe County, Greenwood Village and other public agencies worked on the Tech Center housing deal, worth an estimated $500,000 in incentives.

Mike Krause, a fellow at the Independence Institute in Golden, a free-market think tank, sees such government meddling in the marketplace as pernicious.

Government lures economic development with abatements and incentives, but when those businesses don’t pay enough for workers to live nearby, the government bails out those businesses again, he said.

Subsidizing housing for workers, he said, allows businesses to pay less to retain a workforce.

“Governments are creating the need for more subsidies with their original subsidies,” he said. “This isn’t how our economy is designed to work.”

But Roble said government money alone isn’t filling the need.

“Affordable housing is a continuous problem,” he said, “but the ability to build them is limited by the availability of programs.”

If the problem is left to the market, it probably won’t be addressed, said Jim Taylor, Arapahoe County’s housing and community development director.

“As a developer, you go where the dollars take you,” he said. “And they take you to commercial development and high-end residential.”

Supply-and-demand principles mean little to those who work for too little to afford a home, he said.

“They are people living in their parents’ basements, sleeping on sofas, crowding into small apartments or living in substandard homes,” Taylor said of the growing workforce. “We’re doing the best we can to deal with the problem, but it’s so big.”

Staff writer Joey Bunch can be reached at 303-954-1174 or jbunch@denverpost.com

A house on the 9600 block of Marmot Ridge Circle in Littleton sits vacant June 28 after the residents were forced to move out due to foreclosure. Analysts say houses that are foreclosed upon often drive down the prices of other homes in the nearby vicinity.
A house on the 9600 block of Marmot Ridge Circle in Littleton sits vacant June 28 after the residents were forced to move out due to foreclosure. Analysts say houses that are foreclosed upon often drive down the prices of other homes in the nearby vicinity.
Provided by: Erin Williams

Contributed by: Joseph Kirchmer/YourHub.com

A record number of foreclosures in Douglas County has prompted county officials to step in and attempt to help residents who may be in over their head on a mortgage.

The Douglas County Housing Partnership (DCHP) launched a new program this month aimed at reducing the number of foreclosures in the county. Although Douglas County is one of the wealthiest counties in the nation, it has experienced a considerable spike in its foreclosure rate.

The county recorded 1,200 foreclosures in 2006, which tied it for sixth most in the state with Larimer County, according to Public Trustee Dianne Bailey.

The county has already received close to 900 foreclosure notices through June of this year, which puts it on pace to nearly double the amount of foreclosures from last year, she said. Something needed to be done to help curb those numbers, Bailey said.

“I felt we needed to take some proactive action in trying to help homeowners resolve their foreclosure issues,” she said. “My hope is that we can help educate the homeowner in such a way that they will be able to resolve the current payment on their mortgage.”

She approached the Housing Authority because the public trustees office is not allowed to refer homeowners to banks and lenders.

Craig Maraschky, executive director of the DCHP, said his office can act as a mediator between homeowners who are facing foreclosure and their lenders. Often the goal is to negotiate a deal with a lender that avoids a foreclosure.

“The more we can do to reduce the number of foreclosures in the county, the better it will be for everyone,” he said.

The rising number of foreclosures has given both the county and the state a black eye in recent years. Reports indicate Colorado has consistently ranked near the top or at the top of the nation in terms of foreclosure rates over the course of the last two years.

Much of the problem has to do with loose regulations on mortgage brokers in the state, Maraschky said. Until recently, mortgage brokers weren’t required to be licensed to operate in the state. As a result, some lenders extended questionable adjustable rate mortgages and interest free loans that offer small monthly payments upfront but rise considerably over time.

After a while, homeowners can’t keep up with payments that double or even triple after a year, he said.

That’s not the only reason, however, foreclosures are on the rise.

Travis Anderson, single family programs manager for DCHP, said there are other factors to consider, such as an unexpected job loss or expensive medical bills that aren’t fully covered by health insurance.

But the so-called “predatory lenders” appear to be the primary cause for concern, he said.

“Some people are told they can get into a house for $500 a month and don’t realize it could go up to $1,500 a month in a year,” he said. “But the lenders, in most cases, probably knew those people shouldn’t be in a house that big but they did it anyway.”

The state recently took action against predatory lenders by passing SB 203, which requires brokers to be licensed by the Division of Real Estate and pass a series of tests. Until recently, Colorado was one of only two states that didn’t require brokers to be licensed.

Other bills passed last session require lenders to act in good faith and only extend loans to people who will be able to pay it back.

Anderson said those measures will likely help the problem.

“It should be better now,” he said. “It should get some of the bad guys out of there.”

But there is bound to be a ripple effect from the number of foreclosures in the county on other homeowners. Foreclosures often drive down property values in the neighborhood and slow down appreciation rates on homes, Maraschky said.

“It affects people on both a micro and a macro level,” he said. “On a micro level, it negatively impacts the family and on a macro level, it negatively affects property values.”

For more information on the DCHP, call 303-784-7856.

Read five simple tips to help avoid foreclosure by clicking here.

NUMBER OF FORECLOSURES RECEIVED IN DOUGLAS COUNTY:

1988 – 600
1989 – 557
1990 – 413
1991 – 387
1992 – 254
1993 – 143
1994 – 91
1995 – 77
1996 – 128
1997- 171
1998 – 187
1999 – 181
2000 – 212
2001- 270
2002 – 415
2003 – 652
2004 – 800
2005 – 912
2006 – 1258
2007 foreclosures opened as of June 27 – 866

A combination of funding sources — and some creativity — helped a Colorado county save its affordablesenior housing.

By Shannon King

Douglas County, Colorado, located between the state’s two largest metropolitan areas, Denver and Colorado Springs, was the fastest growing county in the nation during the 1990s. Its population went from 60,391 in 1990 to 175,766 a decade later, a 191 percent increase. Located in the Front Range foothills of the Rocky Mountains, the county consistently attracts outdoor enthusiasts who also consider it a great place to raise a family.

However, as in many high-growth communities, one of the consequences of rapid growth is skyrocketing housing costs. Douglas County saw median home prices climb from $119,900 in 1990 to $237,600 in 2000, with similar increases in rental rates for apartment dwellers. And that number keeps going up. Between 2000 and 2005, the average sales price for all housing in the county rose 33.7 percent, topping out at $355,042.

Meanwhile, income has increased only nine percent in the last three years, making housing affordability a major issue. This trend is expected to continue, with 79 percent of the county’s new jobs paying less than $20 per hour, and 42 percent of them paying under $10 per hour (in 2000 dollars), according to the Douglas County Community Development Information Resource Group.

This jobs-housing gap certainly hurts schoolteachers, firefighters, police, retail employees, and service industry workers, but no one is more challenged by the housing crunch than seniors of modest means. Although the county’s comprehensive plan emphasizes the need for affordable housing for seniors, there are only 99 units of affordable senior housing in the entire county.

Two-thirds of those units are at the Oakwood Senior Apartments in Castle Rock, the county seat. The challenge of finding — and keeping — housing that is affordable to low- and moderate-income seniors was brought into sharp focus in August 2005, when the owner of the Oakwood complex proposed converting the units to market-rate condominiums.

The Oakwood apartment complex was built in 1984 and operated under the U.S. Department of Agriculture’s Rural Development 515 Rural Rental Housing Program. That program provides affordable rental housing to seniors and people with disabilities. An interest rate credit subsidy on the loan took the rate down to one percent, and qualifying tenants received rental assistance from the Rural Development program.

But last summer, the owner of the Oakwood Senior Apartments paid off the RD 515 loan before its 50-year term was over. He announced plans to convert the units into condos, and gave the senior residents notice that their rents would increase by $200 per month beginning in February 2006.

Out in the cold

By paying off the loan, the owner was no longer restricted in how much rent he could charge. Further, the subsidies that many residents received under the Rural Development program were no longer available to them. That double blow left many of Oakwood’s 89 senior residents searching for a new place to live. Suddenly, an apartment complex that had served the housing needs of low- and moderate-income seniors for more than 20 years and had a year-long waiting list was left with 34 percent of its units unoccupied.

Mindful of the impact that the loss of 64 affordable units could have, the Douglas County Housing Partnership — the housing authority that serves unincorporated Douglas County, as well as the cities of Parker, Castle Rock, and Lone Tree — acted immediately. In August, the housing authority contacted the owners of the building to ask about buying the complex, with the intent of maintaining it as affordable rental apartments for seniors.

The Douglas County Housing Partnership worked hard to put together a financing package that would allow it to purchase the complex at a mortgage rate it could afford. “Conventional rates were not going to work; the rents were too low to support the debt,” says Craig Maraschky, AICP, the housing authority’s executive director.

In looking for a way to buy the property, DCHP reached out to numerous funders and finally came to a collaborative solution. The agency created a public-private partnership with the property owner and worked with federal, state, and local officials to get commitments for both debt and equity. In the end, financing came from multiple sources, which is typically the case in affordable housing deals, Maraschky notes.

Let’s make a deal

The appraised value of Oakwood Apartments was $4.2 million, but the Douglas County Housing Partnership, after negotiations with the owner, got the complex for $3 million plus closing costs. To make up the loss, the owner took a $1 million charitable contribution. The negotiations were especially challenging because of the tight timeframe, although the owner was cooperative.

The Douglas County Board of Commissioners approved the reallocation of $646,000 of the county’s 2004 and 2005 community development block grant funds to support the acquisition. Recognizing the area’s need for affordable senior housing and the significant contribution from the county, the Colorado Division of Housing also provided $600,000 in HOME funds for the purchase. These funds, combined with $42,000 of DCHP funds, provided the much-needed equity portion of the finance package.

The critical piece of the deal came in March 2006 from the Colorado Housing and Finance Authority, which committed to a $2.1 million loan at 1.5 percent interest for 65 months. But with the support of HOME and CDBG funds, the acquisition would not have been feasible if CHFA had not agreed to such an extraordinarily low financing rate, a rate that was unprecedented, according to Jeff Watson, AICP, assistant director for community services in the Douglas County Community Development Department.

Generally, a loan with a 1.5 percent interest rate won’t be issued because the lender would lose money by doing so — and in fact, CHFA is taking a loss on this loan. Various options were considered, including low-income housing tax credits, but they were not feasible due to the extremely tight timeline.

CHFA recognized the dire need for affordable housing at Oakwood. Many residents may have faced homelessness had the acquisition not gone through.

DCHP bought the Oakwood Senior Apartments in April with the help of several other agencies. Thus it could honor its commitment to keep rent for existing tenants at $350 per month and rents for new tenants at $400. Keeping rents low was critical to the project because 97 percent of Oakwood’s senior residents have incomes at or below 50 percent of the area median income. With DCHP’s acquisition of the property, the complex will remain affordable to seniors in Douglas County for at least the next 30 years — a requirement imposed by the CDBG and HOME programs.

In June, residents of Oakwood, agency representatives, and guests celebrated the grand reopening of the Oakwood Senior Apartments, nestled at the foot of Castle Rock’s namesake monument. Thanks to a successful collaboration, the 64-unit complex will continue to provide decent housing and affordable rent for residents today and in the future.

Now what?

Across the U.S., the search for affordable housing is difficult for many, especially the most vulnerable — the poor, children, those with disabilities, and senior citizens. Planning for affordable housing for seniors will become especially important as baby boomers retire. The U.S. Census forecasts that the proportion of people age 65 and older will grow from 12.5 percent of the total population in 1990 to 17.7 percent in 2020, a 41.6 percent increase.

Senior citizens accounted for just 4.2 percent of the Douglas County population in 1990 and 2000. But forecasts from the Douglas County Community Development Information Resource Group indicate that ratio will grow to 10 percent by 2020, and to almost 20 percent by 2030. Douglas County demographics are changing, reflecting similar changes in an aging population nationwide.

Douglas County’s goal is to continue to integrate for-sale and rental affordable housing units into new development and redevelopment, and its comprehensive master plan specifically targets the needs of seniors.

The RD 515 program, under which the Oakwood Senior Apartments complex was originally built and financed, is the primary housing program in the U.S. Department of Agriculture’s Rural Development program. Today, however, the courts are leaning towards giving owners the opportunity to prepay their mortgages, which could lead to as many as 45,000 low-income households losing their housing. According to Craig Maraschky, a similar situation exists with prepayment of Section 8 properties. However, Section 8 tenants receive rent vouchers, whereas there was no additional assistance for the Oakwood Apartment tenants or for other seniors who lose their 515 umbrella.

Will local governments be proactive in providing housing for their most vulnerable citizens? Perhaps multijurisdictional housing authorities and passionate collaboration are part of the answer. As people face the possibility of losing their low-cost housing, it is important for government agencies to continue to make affordable housing a priority not only for seniors, but for other segments of the population, too.

Shannon King is a long-range planner for Douglas County, Colorado.