Background                                                                  Download the PDF

The Denver region is in the midst of a multi-billion dollar expansion of its transit system. Initially approved by voters in 2004, the expansion envisioned in the FasTracks plan over the next 20 years will ultimately span eight counties and include 122 miles of new commuter rail and light rail, 18 miles of bus rapid transit, 57 new transit stations, expanded park and ride capacity, and improved suburb-to-suburb bus connections.

This expansion comes at a critical point in the region’s development. Over the last decade, jobs continued to shift away from the city center, as the urban core shed employment and net job gains concentrated more than 10 miles away from downtown. Population growth also spread beyond the city’s borders. Between 2000 and 2012, the metro area experienced a rapid 20 percent increase in its population, and more than two-thirds of that growth occurred outside the region’s two biggest cities of Denver and Aurora. In those same 12 years, the number of residents living below the federal poverty line outside of Denver and Aurora climbed by 131 percent. By 2012, nearly one-half of the region’s poor lived in outlying suburban communities.

As people and jobs have moved farther out in the region, transportation costs have eaten up a growing share of household budgets. According to the Center for Housing Policy and Center for Neighborhood Technology, families earning between $20,000 and $55,000 a year in metro Denver spend, on average, 59 percent of their gross household income on housing and transportation.

The FasTracks expansion offers the chance to strengthen connections between low-income residents and economic opportunity region-wide, by forging stronger links among transit, affordable housing, jobs, and services. But to take full advantage of that opportunity, the region needs intentional action and strategic funding that leverages public and private investment in new ways.

The Innovation

In 2007, Enterprise Community Partners, a national nonprofit organization that creates affordable housing through public-private partnerships, worked with the Urban Land Conservancy (ULC), a local nonprofit real estate company focused on purchasing land and buildings for long-term community preservation and development, to commission a study on the benefits of fostering mixed-income, transit-oriented development around the FasTracks expansion.

Based on the findings of the study, Enterprise and ULC partnered with the city and county of Denver’s Offices of Strategic Partnerships and Economic Development to launch the Denver Transit-Oriented Development (TOD) Fund—the first of its kind in the country—to better connect housing, transit, and jobs. Their goal was to invest in real estate around the proposed transit stations before the FasTracks expansion was fully up and running in order to preserve and create affordable housing and community facilities.

They structured the $15 million fund as a collaboration between public and private partners. Enterprise assembled the initial capital; ULC led the real estate acquisition process and the management and dispossession of the assets; and all three partners invested in the fund. In addition, the fund benefitted from investments by the Colorado Housing and Finance Authority, national and local foundations (the John D. and Catherine T. MacArthur Foundation and the Rose Community Foundation), a local Community Development Financial Institution (CDFI) (Mile High Community Loan Fund), and banks (Wells Fargo, U.S. Bank, and FirstBank).

The fund lends to the Urban Land Conservancy at a 3.5 percent interest rate. ULC then purchases land and buildings within one-quarter mile of a high-frequency bus stop or within one-half mile of fixed rail stops, and can hold the property for up to five years as it creates disposition agreements with partner developers. The developers put together projects, often using Low Income Housing Tax Credit (LIHTC) financing. The projects include plans to rehab or redevelop existing multifamily properties (primarily rental units) for residents with incomes below 60 percent of the area median income.


Since its launch in 2010, the initial $15 million fund has been fully expended, leveraging nearly $200 million from public, private, and nonprofit partners. Those investments have funded the acquisition of eight properties near transit sites and the preservation or creation of 626 affordable homes. They have also funded 120,000 square feet of mixed-use commercial space around the sites, making room for a new public library, child care program, and dance company, as well as affordable office space for local nonprofit organizations. To date, ULC has fully repaid three loans. The revolving loan fund currently has $5 million that can be used for additional investments.

Building on its initial successes in Denver, the fund is now expanding region-wide to invest in projects along planned rail and high-frequency bus corridors throughout the Denver metro area. The fund has broadened its pool of investors, bringing additional foundations and CDFIs on board, and has grown to $24 million. That capital is expected to leverage up to $500 million in local economic development in economically challenged neighborhoods. As the fund expands, it will also open its services to other borrowers beyond ULC and explore opportunities to bring new partners to the table, including for-profit developers.


This innovative approach to funding transit-oriented development has since been replicated elsewhere. But creating and implementing this public-private financing tool has not been without its challenges.

  • In part because of its novelty and because it braids together multiple funding sources, it took three years in the midst of the financial crisis to assemble the capital and agree to the structure of the initial $15 million fund. Its expansion to a regional scale took an additional three years. Each wave of new partners has required time-intensive negotiation to agree to the fund’s risk and recourse terms and operating structure.
  • The relatively short supply of LIHTCs in the state has affected implementation. Deals have stalled when developers struggled to secure the credits, lengthening the time ULC must hold certain parcels of land, which carries implications for ULC’s balance sheet.
  • State regulations do not always support the fund’s goals. For instance, the Colorado construction defects law has precluded the inclusion of affordable, for-sale condominiums at the eight TOD sites because of the high cost of insurance and threat of litigation.
  • As the fund expands to new communities, it also raises the question of whether local governments—with much smaller budgets than Denver—will be able or willing to invest in proposed projects as Denver has, not only to help finance the developments but also to signal local buy-in.

Implications for Policy

Given the limited resources available for investing in strategies that connect low-income residents to regional economic opportunity, policymakers, funders, and practitioners will need innovative financing tools like the Denver TOD Fund to better leverage public and private resources. To support these efforts, state, regional, and local policymakers, practitioners, and funders can:

  • Align state and local policies and regulation to support collaborative and strategic funding models. For instance, the Colorado Housing and Finance Authority could create LIHTC set-asides that move TOD projects up the queue in the LIHTC application process;
  • Commit to enterprise-level funding that invests at scale in these types of outcome-oriented, public-private financing tools, and allow flexibility in how the funds are used across a diverse array of communities to achieve agreed on goals.