Thu June 23, 2011
Real Estate

Understanding Colorado’s Affordable Housing Crunch

Low-income residents along the Front Range are finding it increasingly difficult to locate affordable housing. That’s according to a new report by the Colorado Division of Housing, which says demand is outstripping supply. One nonprofit working to change this picture – and innovating along the way – is Denver-based Mercy Housing. KUNC’s Grace Hood spoke with CEO, Lillian Murphy, a Catholic nun, to understand what obstacles the industry is facing today.

HOOD: Since she took the helm of Mercy Housing in 1987, Murphy says a lot has changed in terms of how affordable apartments and homes get built. And that’s because the organizations behind the projects were changing. When she started at Mercy Housing, it was just a young upstart. Today, it’s one of the largest nonprofit affordable housing organizations, serving more than 136,000 people across the US on any given day.

SISTER LILLIAN MURPHY: As the financing got more esoteric, and more complex, we needed to really get a whole other set of skills, and so the non-profits themselves have grown. They’ve become very sophisticated financially, and are doing probably the hardest deals in the country, and they need to continue to do that, but they’re chronically undercapitalized.

HOOD: And of course in today’s financial landscape, you have state dollars on the decline and federal dollars on the decline. Where do you find the money?

SISTER MURPHY: Well I think the nonprofit world has to think differently than it has in the past. I think there’s a real shift happening. We need to be doing more collaboration and partnerships with for-profits, because they have the capacity, they know-how to go to scale, and they have the capital that we don’t have. So we’ve got to figure out a way to partner with them so that we can do more of this and do it in a way that really enables people to get stabilized.

 HOOD: And we’re talking about doing that—your philosophy encompasses mental health and other services. It’s kind of a complete approach.

SISTER MURPHY: Now housing for us is just a means to an end. What we’re really about is trying to provide people a way to stabilize their lives and hopefully achieve their dreams, so a good example of that is here at the Aromor.

HOOD: In this three story modern looking building, a group of residents gather in the community space. This was formerly a hotel for legislators, but it was rehabilitated in 2009 for those transitioning out of homelessness. It has a computer lab, a library, and a laundry facility. The modern building isn’t exactly what most people imagine when they think of affordable housing.

SISTER MURPHY: You know in the past, affordable housing had a negative connotation to it. Everybody said, “Oh that looks like affordable housing”. I think what we’re trying to do is produce buildings in communities that anybody would be proud to live in.

HOOD: And now you’re applying that approach to seniors.

SISTER MURPHY: Well, look at the demographics. We’re going to have double the senior population we have in the next ten years, and nobody’s paying much attention to that. Particularly for the low income seniors, who really have, unfortunately, lost a lot of their retirement funding in the last few years of this economic downturn. So, we need to find a way not just to do the housing, but also to do some kind of service component with the housing. A lot of folks need assisted living, but they don’t need skilled nursing care, and so we’ve got to find models to do that. We have a couple models in California that we think have been very successful; in fact, we have one property out there called Mission Creek, which is in really the last redevelopment area in San Francisco.

HOOD: The National Housing Conference is naming you “Person of the Year”, that’s happening this week. You’ve talked about improvements in affordable housing, and I’m wondering what you think is going to be important in the coming decades.

SISTER MURPHY: We’ve invested for the last 20 to 30 years in community development all across the country, and really improved some neighborhoods. Now they’re starting to deteriorate because of the foreclosure crisis, and we need to continue to invest in them or we’ll lose the benefit of what we’ve had. You know, we don’t have disposable people, we can’t just say, “Well, go on and have a nice life, I hope you find some place to live.” We’ve got to get smarter about finding ways to do it. If the government funding goes away, it’ll just be more challenging than it is, but we’re not giving up.

HOOD: That was Sister Lillian Murphy, CEO of Mercy Housing, a Denver-based nonprofit that finances the construction and management of affordable homes across the country.