Denver Transit-Oriented Development Fund
The Urban Land Conservancy (ULC), Enterprise Community Partners, the City and County of Denver, and several other investors partnered to establish the first affordable housing Transit Oriented Development (TOD) acquisition fund in the country. The purpose of the Denver TOD Fund is to support the creation and preservation of over 1,000 affordable housing units through strategic property acquisition in current and future transit corridors. The Fund answers a basic real estate conundrum: when the economy is bad, property values are low and ripe for purchase, but access to capital is poor and affordable housing developers are scarce. Now is the opportune time to invest in real estate around proposed transit stations in order to capitalize on current values and preserve affordable housing before RTD’s FasTracks light rail is fully operational.
As of April 2013:
- 8 properties have been acquired using the $15 million TOD Fund preserving or creating 626 affordable homes, 120,000 sf of commercial space for community assets such as: new public library, child care program, theater company and affordable space for nonprofits.
- The Denver Fund has been drawn down $15,275,650 leveraging almost $200,000,000 from public, private and nonprofits partners in only 3 years!
- Over 700 jobs have been created from Denver TOD Fund property development and redevelopment.
Benefits of the Fund
The Denver Fund was capitalized at $15 million, but has now evolved to a $24 million in total loan capital. This revolving loan fund will make capital available to purchase and hold sites for up to five years along current and future rails and high frequency bus corridors across the Denver metro region. The $24 million investment will leverage over $500 million in local economic development activity, serving many economically challenged neighborhoods in Metro Denver with construction and permanent job creation. The Fund will also directly benefit low-income households that on average spend 60% of their gross income on housing and transportation expenses combined. By controlling these expenses and providing access to quality, environmentally-sustainable housing, the TOD Fund will make it possible for families to build wealth and access employment and educational opportunities. It will also provide employers with access to an expanded workforce.
The partnership of government, quasi-governmental organizations, banks, nonprofits and foundations is a critical component of the Denver TOD Fund. Enterprise Community Partners, a national nonprofit, assembled the initial $15 million in capital that allowed the Fund to begin operations in 2010. City of Denver is the largest single investor, providing $2.5 million in top loss investment. ULC committed the initial $1.5 million equity to the Fund and leads the real estate acquisition, management, and disposition of assets for the Fund. ULC is a nonprofit organization formed by local business leaders who understood the need to permanently secure real estate assets for community benefit in metro Denver’s urban neighborhoods. We partner with other developers to achieve the goals of the TOD Fund to preserve and create affordable housing units.
Expanding TOD to Other Municipalities
Metro Denver is undergoing the nation’s largest public transit expansion with the addition of five new light rail lines that compliment the existing three lines already serving Denver and its south suburbs. Each of these new rail lines brings opportunity for transit-oriented development in the Denver Metro area. The structure of the TOD Fund offers a unique opportunity to expand into other municipalities in the metro area in order to complement transit oriented development and other activities around expansion of FasTracks. Our desire is to partner with municipalities to explore how this Fund can help preserve and create affordable housing and stimulate economic development along the rail lines. We welcome an opportunity to answer any questions about how an investment in this fund can help achieve community development goals and strengthen Denver Metro area communities. In addition to ULC, the regional $24 Fund is now eligible to additional borrowers who can use the Denver TOD Fund to purchase, hold and eventually develop sites in the Denver Metro Area within:
- One-half mile of fixed-rail transit stations
- One-quarter mile of high-frequency bus stops
See the Denver Regional TOD Fund Term Sheet for more details.