Frequently Asked Questions

“Affordable Housing” costs 30% or less of the household’s gross annual income, according to Colorado Housing and Finance Authority (CHFA) and the U.S. Department of Housing and Urban Development (HUD). This typically means there is some subsidization of construction costs and a restriction on resale amounts. This can include deed restriction to keep units affordable over time. Residents must be “income qualified” based on a percentage of Area Median Income.

What is NOT “Affordable Housing?” - Any housing that costs more than 30% of a household’s gross annual income. In Ouray County this includes most homes sold and resold at market rate with no restriction on resale value. Some small market rate condos and townhomes have been marketed as “affordable” because they are smaller, but they have no built-in price protections and are not “Affordable Housing.”

Area Median Income (AMI) is the midpoint of a region’s income distribution – half of families in a region earn more than the median and half earn less than the median. In Colorado, our “areas” are broken out by county.

State and federal funding programs require that people must be “income qualified” based on a percentage of the AMI. For example many programs require that a household income must be at or below 80% AMI in order to qualify to live in subsidized housing.

The AMI calculation is flawed, however, because it assumes wages in a county are correlated with the cost of housing. This assumption is not true in Ouray County and other “rural resort” counties, which is why newer Colorado funding opportunities are allowing AMIs of up to 120%-160% in some instances.

Official Source for Colorado AMI: https://www.chfainfo.com/rental-housing/asset-management/rent-income-limits
HUD AMI: https://www.huduser.gov/portal/datasets/il.html

Table of Contents
What is Affordable Housing?
What is AMI?
What is a Community Land Trust?
What is Income Qualified?
Definitions

A Community Land Trust (CLT) is a nonprofit organization governed by a board of community residents and public representatives that provide shared equity homeownership and rental opportunities.

A family or individual purchases a house on land owned by the Home Trust. The purchase price is more affordable because the homeowner is only buying the house, not the land. The homeowners lease the land from the Home Trust in a long-term (99-year), renewable lease. The homeowners agree to sell the home at a restricted price to keep it affordable in perpetuity, but they may realize some appreciation based on the resale formula.

CLTs develop residential and commercial spaces to serve local communities, provide affordable housing, and conserve land. However, the heart of the work is the creation homes that remain permanently affordable, providing successful homeownership opportunities for generations of modest income families.

Income Qualified means an individual or household’s income must be below a certain amount in order to qualify for Affordable Housing. Typically it is tied to a percentage of Area Median Income (AMI), and is different for different projects.

For example, an affordable rental building in Ouray may have an income qualification of 80% AMI, and a for-sale deed restricted house in Ridgway could have an income qualification of 120% AMI.