A Little-Known Federal Program Is Keeping Senior Housing Affordable in Denver

The last few years have been rough for the Northeast Denver Housing Center. Rising utility prices, property taxes, and renovation costs have all cut into the nonprofit organization’s cash flow and threatened the operability of NDHC’s more than 1,000 affordable housing units across Denver. On top of that, Denver’s homeless population has ballooned by 80% since 2021 to roughly 10,000 people, which serves as a stark reminder of the need for local affordable housing options.

At times, executive director Dominique Acevedo wondered how long NDHC could weather the storm. That was until NDHC received a more than $5 million grant from a little-known program administered by the Department of Housing and Urban Development to help the organization retrofit one of its most important properties with green energy technology that will make it sustainable into the future.

The NDHC property that Acevedo was most concerned about was Liggins Tower, a 72-unit Section 8 affordable housing property in Denver’s Park Hill neighborhood. The eight-story, 46,000-square foot building was completed in 1971, making it one of the older multifamily buildings in the neighborhood. Acevedo says NDHC purchased the property in 2008 and made some capital upgrades with a 4% Low-Income Housing Tax Credit.

Liggins Tower is one of a handful of senior housing options in northeast Denver, and it is close to public transportation, grocery stores, and the Forest Street Compassionate Care Center, a 60-bed skilled nursing center. Most residents at Liggins Tower earn no more than 50% of the city’s median income, or roughly $45,000 annually, she says.

“We never have issues with vacancy, and that speaks to the need for affordable housing for seniors,” Acevedo tells Next City. “But that need is growing, especially because of what’s happening with seniors on fixed incomes, and then what’s happening with the cost of everything going up, like food and utilities. It’s putting a strain on anybody who needs affordable housing.”

Despite the demand for affordable senior housing in Denver, Acevedo says rent payments have not kept pace with growing utility and maintenance costs at Liggins Tower. If something didn’t change, NDHC’s projections showed the building would become cash-flow negative within the next five years, she says.

Then Acevedo received an email from Colorado Gov. Jared Polis’ office earlier this year about a federal program called the Green and Resilient Retrofit Program (GRRP). Since GRRP was introduced in 2022 through President Joe Biden’s Inflation Reduction Act, the program has paid over $1.43 billion, supporting 225 properties and more than 26,000 rental homes, according to data from HUD.

GRRP program works like this. HUD-supported affordable housing providers can apply for up to $80,000 per unit in funding. The money must be used on upgrades that make the properties more resilient to climate hazards and improve residents’ quality of life. That can include HVAC system upgrades, projects that improve water efficiency, and transitions to renewable energy sources. The grants are not required to be paid back if the property owner agrees to keep the property affordable for 25 years. Acevedo says she hasn’t seen a similar HUD program in more than three decades at NDHC.

Polis’ office said it would provide technical assistance to housing providers applying for GRRP funding. So, Acevedo lept at the chance.

In October, NDHC was awarded a $5.84 million grant to upgrade Liggins Tower. NHDC plans to use the funding to reduce water usage by xeriscaping its lawn and improving its hot water heating system. Other upgrades include adding solar panels, insulation, and improving air ventilation.

Without those federal dollars, Acevedo says, the organization may have had to sell the property.

Extending the life of affordable housing

Though GRRP represents a fraction of the $891 billion of funding in the Inflation Reduction Act, experts say it is a critical tool to preserve affordable housing.

GRRP is the only HUD program to combine climate resiliency with green energy retrofits, explains Michelle Diller, the senior program director for Building Resilient Futures at Enterprise Community Partners. Moreover, she says, GRRP is a forward-looking program that seeks to extend the lifetime of affordable housing units instead of simply repairing damages.

“[GRRP] enables time to drive green energy investments, to drive resilience, and to build strong public-private partnerships that benefit our most vulnerable communities,” Diller tells Next City.

Diller acknowledges that future GRRP funding could end under the new HUD administration appointed by President-elect Donald Trump. She said that decision wouldn’t impact financing that has already been committed. Still, it could force affordable housing providers to look at similar programs like the Community Development Block Grant or HUD’s Build for the Future program for new funding sources.

For affordable housing providers like Acevedo, GRRP solves a fundamental cash flow problem caused by increasing operating costs. Unlike private market landlords, affordable housing providers cannot simply raise rents and fees to compensate for property taxes and maintenance costs. While that ensures the affordability of their units, it also makes it challenging to upgrade aging units without relying on grant funding or debt, Acevedo explains.

GRRP addresses these issues by providing flexible funding options through grants and low-interest loans. The kinds of projects that GRRP supports can also reduce operating costs going forward. For example, NHDC plans to upgrade the electrical and water systems at Liggins Tower with the funding it receives. Each unit at Liggins Tower uses about 124.2 gallons of water per square foot per day, Acevedo says, making it one of the most expensive utilities NHDC pays for.

GRRP funding can also help organizations like NDHC secure funding for green energy upgrades at a time when state-level incentives and mandates have faced significant pushback. Colorado property owner groups like the Colorado Apartment Association, the Apartment Association of Metro Denver, and the Colorado Hotel and Lodging Association sued the Colorado and Denver governments in April to overturn rules requiring property owners to retrofit older buildings with carbon-reduction technology. The groups estimated the upgrades would cost $3.6 billion. The lawsuit is ongoing.

Property owners have filed similar lawsuits in Kansas City, Kansas, and Berkeley, California.

The organization will also use the upgrades at Liggins Tower as a case study about how it can improve the other 15 properties in its portfolio. NHDC plans to share its findings with other affordable housing providers as well.

“This has been at the forefront of our minds. How can we improve these properties to ensure they’re going to cash flow well into the future and that the payments for tenants are affordable in this future?” Acevedo says.

Preserving affordable homes for seniors in Denver has become more critical as development activity for these properties lags. In October, Catholic Charities of Denver and developer Cushing Terell opened a four-story, 63-unit studio-and-one-bedroom senior housing complex in southwest Denver called All Saints, which serves seniors with incomes of up to $54,000 per year. California-based developer Chelsea Investment Corp. has also proposed converting a five-story office building near the state capitol in Denver into a seven-story, 76-unit senior housing complex. Construction on the seven-story complex is expected to begin in early 2025, per local news station 9News.

“Government funding comes with a lot of strings, and it’s hard to navigate, but this is well worth it because it prioritized renewable energy and sustainability,” Acevedo says. “It’s a great bang for the buck.”