Denver's Sun Valley neighborhood.

Denver's Sun Valley neighborhood.

After the Denver City Council approved nearly $3 million in no-interest, forgivable city loans, the Denver Housing Authority is moving forward in its first redevelopment phase of the city’s oldest – and poorest –  subsidized housing community, the Sun Valley neighborhood.

The council passed the loan agreement in a 12-0 vote Monday, with Councilwoman Kendra Black absent. The decision was made as part of a block vote with no discussion.

With about $71.5 million now secured for the first phase of development from state, federal and private funding, there will be two initial construction projects.

The first development, estimated at more than $30 million, will be Sun Valley’s Gateway South. The housing structure will have 92 units, including 47 one-bedrooms and 45 two-bedrooms. Fifty-eight of those units will have affordability restrictions, ranging from below 30% and up to 60% of the area's median income. The other 34 will be market-rate units.

The second construction project, costing about $40 million, will be the Gateway North public housing development. The building will include 95 units of family housing, 43 of which will be covered by Section 8 vouchers for low-income residents. All units will be limited to those earning below 30% and up to 60% of median income.

“We are transforming this neighborhood which was and is the lowest income neighborhood in the state of Colorado,” said Ryan Tobin, DHA’s director of real estate investments. “By rebuilding mixed-income communities, we are able to remove that concentration of low income and bring back to Sun Valley new housing across the board for all folks that live there.”

Sun Valley residents’ average annual household income was less than $15,000 as of 2017, more than six times less than the Denver metro area, according to the Piton Foundation.

The Gateway projects are expected to be completed by December 2020. In the meantime, Tobin said, 57 families who lived in the Gateway units have been relocated to other DHA housing programs or neighborhoods until construction is completed.

DHA’s goal is to build more than 800 new housing units over the course of four phases of development, comprised of seven construction projects. The seventh development is slated to begin in 2024 and finish up in 2026.

The complete project, first announced in 2013, is estimated as of this week to cost $310 million. The total project cost was previously estimated at $240 million, but has been revised in part, Tobin said, because of increased costs in the marketplace.

“We have seen an extraordinary amount of escalation in cost in our marketplace that is driving our overall element costs up, just since the grant award until now,” he said.

A $30 million grant was awarded in 2016 to the DHA and the City and County of Denver from the U.S. Housing and Urban Development Department toward revitalizing the Sun Valley neighborhood. That grant is intended for redeveloping unused land, creating open spaces and investing in new commercial and retail spaces.

The grant also outlines plans to redesign the neighborhood’s street grid to improve accessibility.

The big idea, Tobin said, is to “bring back unique and diverse housing types to allow for a mix of income and continued growth and prosperity of the neighborhood.”

DHA has worked with the Sun Valley community over seven years on this vision, said Stella Madrid, the agency's intergovernmental and community affairs officer, and even more “intensely” over the last couple of years on the design of the replacement housing.

“It is truly a community-driven revitalization plan, involving the voices of not only the public housing residents but also the property owners and the service providers there in Sun Valley,” she said.

With about 55% of Sun Valley neighborhood’s population being minors, DHA also has worked to gather input from young voices to find out what they want in a neighborhood.

“Children and young adults met with our staff, drew pictures of what they’d like to see, and reacted to images that they would like to see with regards to play areas, open spaces, and after school space to do their own homework,” Madrid said. “We really have authentic community engagement of all ages.”

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