Investment Opportunities - Housing

As indicated in the Community Challenges section of this prospectus, housing is an identified need within Limon and the Opportunity Zone.

Housing Needs

This information is summarized from the Limon and Hugo Housing Needs Assessment completed by Prior & Associates with an effective date of December 14, 2018. The Needs Assessment may be downloaded by CLICKING HERE.

Rental Market Conditions

  • In December 2018, the average vacancy rate at surveyed Public Housing, Section 515 and market rate projects in the Primary Markey Area was 1.8%, including 4.8% at Class B family market‐rate apartments, 0.0% at Class B senior market‐rate units, 0.0% at Class C market‐rate dwellings and 0.0% at the deeply subsidized project.
  • All but one of the surveyed rental projects in the Primary Market Area reported stable occupancy at or near 100% during the past year. Smokey Trail Village, a Class B market‐rate property at the top of the overall market in terms of property attributes and effective rents, reported a stable occupancy rate at or near 95%.
  • The precedent of the surveyed Class B market‐rate properties is most relevant for a new apartment project at the proposed site that meets the market standard for project attributes. These Class B projects had effective rents of $835 for a one‐bedroom unit, and $900 and $1,050 for a two‐ and three‐bedroom dwelling, respectively.

Demand for Rental Housing

  • A new rental project with monthly rents starting at $835 could target households with annual incomes of at least $30,364, based on a 33% rent‐to‐income ratio, and up to $100,000, which is the high end of the incomes reported at all surveyed rental properties and property managers.
  • The best option for a new rental project in the PMA would be to include a mix of income restricted and market‐rate apartments in order to broaden its target market to the fullest extent possible. It is also advised that any new income‐restricted dwellings have rents set no higher than the net Payment Standards in order to target tenants with Housing Choice Vouchers and have the same effective target market as the only existing income‐restricted properties in the Primary Market Area, which are deeply‐subsidized.

Conclusions and Recommendations

  • Construction of new, high‐quality single‐family homes would be appealing to potential renters or buyers, as the market area has an extremely limited stock of newer properties, is experiencing growth and has a prominent renewable energy sector supporting demand for quality new construction housing.
  • The proposed Limon Housing Project site is feasible as a rental or for‐sale development in the current economic and housing conditions.
  • A property with both affordable units restricted at or below 60% of the area median income (AMI) and traditional market‐rate units would result in a broad target market and could then accommodate up to 38 dwellings. Any income‐restricted units should have rents set at or below the net Payment Standards in order to house Housing Choice Voucher (HCV) recipients, which would enable them to match the performance of the deeply‐subsidized units in the Primary Market Area that were 100% occupied with waitlists.
  • In order to be competitive in the Primary Market Area’s rental housing market, only limited common amenities and surface parking would be required, but a new rental project’s unit features should include air conditioning, ceiling fans, storage closets, coat closets, patio/balconies, refrigerators, stove/ovens, dishwashers, disposals, microwaves and washer/dryer hook‐ups or in‐unit washer/dryers.
  • Based on surveyed levels of demand and waitlists, a unit mix of 35% one‐, 45% two‐ and 20% three‐bedroom dwellings would be most ideal for an unrestricted market‐rate apartment project in the PMA. However, demand was greater for smaller unit types at income‐restricted properties. A mix of 45% one‐bedroom, 45% two‐bedroom and 10% three‐bedroom dwellings would be appropriate for an income‐restricted property.

Limon Housing Project

The Limon Workforce Housing Project was created through Housing Colorado's Design Charrettes Program. The Design Charrettes Program provides an opportunity for non-profit housing developers and Housing Authorities to benefit from pro-bono pre-development services for an affordable housing project. A team of professionals, led by architects and landscape architects, created an affordable housing concept for the Limon Housing Project site.

Additional team expertise will include finance professionals, development professionals, sustainable design and building/ construction professionals, municipal staff and resident representatives.

The parcel being considered for development was acquired in 2016 by Lincoln County Economic Development with the goal of assisting the Town of Limon to address housing needs identified in its 2016 Comprehensive Plan. The site consists of 10.26 acres of undeveloped, greenfield land located within the Town of Limon in a Multi-Family Residential (R-3) Zone District. The legal description of the Project Site is:
ALL BLOCK 3, NORTH VIEW TOWNHOMES ADDITION TO THE TOWN OF LIMON, LINCOLN COUNTY, COLORADO.

Location Map


Vicinity Map

Site outlined in red

Project Site Control

The Project Site is under control of the Lincoln County Economic Development Corporation, Inc. (LCEDC). LCEDC intends to transfer the property to the developer of the Limon Housing Project described below.

Town of Limon Commitment

The Town of Limon is committed the following resources to this Limon Workforce Housing Project. The Town of Limon shall provide materials for the development of K Avenue to the property.

Additionally, the Town of Limon is offering to provide one-half (1/2) cubic yard of gravel per square foot of backfill material per square foot of new building construction in excess of 1,000 square feet at no charge. The Town of Limon makes no warranty as to the quality or grading of the material. The material will be available as is at the Elbert County pit. It is up to the user to verify the material is suitable for their purpose. The quantities utilized under this incentive will only be sufficient to meet the need specified by a professional engineer to complete the project.

Project Site Description

The Project Site consists of 10.26 acres but includes a drainage way that creates some floodplain designation. The Floodplain A2 Zone in the graphic below identifies the 100-year floodplain that impacts development within that area.

Floodplain Map

Floodplain Map

Limon Workforce Housing Concept

Project Goals

    1. Provide workforce housing for Limon, where nearly 50% of the available jobs are filled by workforce commuting into the town
    2. Attract & retain a skilled workforce with adequate housing options

 

Financial Proforma

62 Units

1 Bed - 28 Units
2 Bed - 28 Units
3 Bed - 6 Units

 

 Site Plan Development

 

 Amenity Designs

 Floor Plans

 

 

 

Elevations


Unit Perspectives

North Side Rendering

South Side Rendering