Chipotle may be first to aid rent buy-downs

Denver Mayor Michael Hancock on Tuesday said Chipotle Mexican Grill could be the first partner to sign up for a pilot program that aims to buy down rents on up to 400 market-rate apartments, making them more affordable for working families.

Chipotle’s contribution still was being worked out, a city housing official said. The Denver-based burrito chain’s involvement as an “employer partner” probably would result in an allotment of some of those apartments for its workers, as long as they fall within the program’s income ranges.

City officials, offering potential matching grants from city coffers and foundations, are seeking partnerships with other employers that want to aid efforts to create more workforce housing in Denver.

A city fact sheet says Comcast also is in “private discussions” to participate, as are the Anschutz Foundation and the Colorado Health Foundation.

Hancock disclosed Chipotle’s potential involvement briefly during a speech Tuesday to a Denver Metro Chamber of Commerce luncheon. Company spokeswoman Quinn Kelsey later wrote in an email that the company still was in talks about its participation with the mayor’s office.

“(Chipotle is) absolutely comfortable saying, ‘We’re in on this.’ We’re just working out the details,” said Erik Soliván, the director of Hancock’s housing policy coordination office.

He said Chipotle had a target for how many of its workers’ families the company hopes to enroll in the program, but he declined to specify the number.

Hancock announced the apartment rent buy-down program during his State of the City speech last month, but some details, including final costs, are still pending on the potential three-year pilot. Soliván said his office and the Denver Housing Authority are aiming for a launch of the program in the fall, and a fact sheet says the city is aiming to raise $2 million from public and private sources.

The program has received some national attention, since cities typically have not organized rent buy-down programs. Here’s how it would work:

The basics: The city and its private partners will seek out property owners with vacant apartments available. The program will pay to cover the gap between the units’ market rents and the standard subsidized rent levels the city allows to be charged to individuals and families, depending on their income and household size.

For companies that participate as employer partners, Soliván said, “It’s not about preference, but they’re buying into the program to target affordability for their (employees’) families.” Next month, the city plans to work with the Apartment Association of Metro Denver to solicit proposals from property owners with vacant apartments. Expectations are that, given Denver’s glut of recently built higher-rent apartments on the market, owners of newer buildings are most likely to be interested. Soliván said the pilot program in its first year probably would seek a range of Denverites struggling to afford to stay in the city, from teachers to fast-food workers to some people who have been cleared for federal housing vouchers but haven’t been able to find homes yet.

Income levels: To participate, prospective renters must have household incomes between 40 and 80 percent of the area median income. For an individual who lives alone, that’s currently $23,520 to $47,040; for a family of four, that’s $33,560 to $67,120. Essentially, the guidelines are intended to ensure that no family spends more than 35 percent of their income on rent.

In about two weeks, Soliván said, the city’s Office of Housing Opportunities for People Everywhere, or HOPE, will post more information and a program timeline on its website.

The program, while portrayed as innovative, will put only a small dent in the problem of housing affordability in Denver. By the city’s estimate, more than 52,000 households might meet income qualifications.

DHA will administer the pilot program. It already runs the federal housingchoice voucher program, also known as Section 8, for local residents. That program has a wait list of nearly 25,000 applicants, according to Soliván.