Oct 24, 2019
Funds to Further Support Denver’s “D3” Program
DENVER - The Denver Housing Authority (DHA) announced today that it has closed on the issuance of $129,810,000 Intergovernmental Agreement (IGA) Bonds. In 2018, to double Denver’s dedicated Affordable Housing Fund and provide for a funding surge of over one hundred million dollars for affordable housing, DHA and the City entered into the IGA to accelerate the production and preservation of much-needed affordable housing over the next five years through the “DHA Delivers for Denver” Program (D3). The $129.8 million generated through this transaction outperformed the original estimate of $105 million, increasing our collective investment in affordable housing by $24 million.
“An affordable home is the foundation that any family’s economic security is built upon. Protecting and improving the affordability of our homes is the guiding principal that informs and shapes all our work and our policies,” Mayor Michael B. Hancock said. “DHA is a critical partner in this effort, and through this funding surge we will deploy more funding quicker to support our residents and families without increasing costs on the very households we are working to serve.”
Bond proceeds will go toward the creation and preservation of more than 2,400 units of affordable housing, part of the City of Denver’s overall housing goals of adding at least 6,000 units in five years, as more specifically detailed in the City’s 5 Year Housing Plan: Housing an Inclusive Denver.
Half of the fund proceeds are specifically dedicated to acquiring buildings, land, and/or existing subsidized rental housing that can be developed for Denver’s lowest income residents. Bond funding will also go towards the development of permanent supportive housing for individuals and families experiencing homelessness while linking them to intensive supportive services using the Housing First model. The other half of fund proceeds will be used to accelerate nearly 1,300 of DHA’s planned housing units over the next five years.
“This is the largest single financing in DHA’s 80-year history and is a clear demonstration of our commitment to being a vital part of the housing solution for the City of Denver. Through the D3 Bonds, we are accelerating and expanding our housing production, completing in five years what would normally require 10 years or more,” stated Ismael Guerrero, DHA’s Executive Director. “I am very proud of the DHA team that made this possible, including our partners at the City of Denver, our financial advisors at S.B. Clarke, and the legal team at Butler Snow. In addition, the joint underwriting team of J.P. Morgan and Stifel Nicolaus were able to exceed expectations, raising over $129 million in bond proceeds. “
DHA partnered with the City to receive an annual appropriation of the City’s property tax mill levy revenue for the next 20 years as a result of its ability to issue bonds and its proven administrative, financial and housing production capabilities. The agency worked extensively with the Denver Department of Finance (DOF) and Denver Economic & Development Opportunities (DEDO) to make this critically important bond program a reality. S&P Global Credit’s rating of the bonds as “AA+” provided DHA with an independent credit rating of “AA- “, allowing for very favorable pricing in the bond market.
In anticipation of the D3 Bond proceeds, DHA has already accelerated its housing production pipeline, delivering or commencing construction on over 850 housing units in the coming 12 months. Two examples include:
655 Broadway – The redevelopment of a vacant Denver Health office building, creating 110 new units serving residents between 20%-60% AMI. This innovative partnership with will provide 14 single room occupancy units as transitional housing options for Denver’s chronically ill and medically unstable homeless population. On-site health and wellness programs will be provided to promote aging in place and the coordination of long-term housing options.
Shoshone Apartments - Redevelopment of ten aging public housing townhome units into a modern, three-story apartment building with 53 units of 1, 2 and 3- bedroom housing, serving residents between 20% and 80% AMI.
The project will also provide an onsite parking structure for tenants and upgraded right- of-way improvements.