A local nonprofit has taken a major step toward building affordable housing in Montrose, securing land and state funding for a 50-unit apartment development that will serve low- to moderate-income residents and individuals with intellectual and developmental disabilities as part of the broader Hilltop Neighborhood planned along 6600 Road.
Community Options Inc. (COI) has secured $1.25 million through the Colorado Housing and Finance Authority’s Proposition 123 Land Banking program to purchase more than four acres at 366 6600 Road. The organization completed the land purchase in December 2025 and received a $270,000 donation from Housing Partners of Montrose LLC, which still owns the larger area around the project, as part of the transaction.
The nonprofit provides and coordinates services and supports to people with intellectual and developmental disabilities. Leaders say the housing project grew out of a growing concern that both the people they serve and their own workforce are struggling to find stable, affordable places to live.
“Our employees don’t have a place to live. The people we serve have challenges finding places to live,” COI Executive Director Jennifer Pelligra said, describing conversations that began internally when Chief Financial Officer Kevin Sowder brought the newly created Proposition 123 land banking opportunity to the organization. “This is important to our community if we want to remain in the community.”
COI plans to construct at least 50 affordable rental apartments targeting households earning 30% to 60% of Area Median Income.
The project is designed to help address the 3,900-unit housing gap identified in the City of Montrose’s 2023 Housing Needs Assessment. Rent for an average two-bedroom apartment increased 27% between 2020 and 2022, according to project materials.
Sowder said independent living options remain limited for individuals whose benefits have not kept pace with rising housing costs.
(Justin Tubbs | MBT)
“Finding a place for them to (live) can be very problematic,” he said. “Some of their best options are either back at home or with relatives — and how do you really call that independent living?”
COI estimates the total project cost at roughly $24 million, but it could be more or less, as it’s early. The development remains in pre-development and will require Low-Income Housing Tax Credits (LIHTC) to move forward. The organization plans to apply in the December tax credit round and leadership feels good about their chances to secure the credit.
COI has also received funding from the Colorado Department of Housing to support pre-development costs, including planning and design work.
“We don’t want to overpromise and underdeliver,” Pelligra said, noting the project could take three years or more to complete.
Inclusive housing by design
In addition to serving workforce households, COI’s development will incorporate universal design principles intended to better serve neuro-diverse adults seeking independent living options.
“Universal design is the minimum,” Pelligra said. “We will center the voices of the people who will use it. We don’t want to develop something that won’t work for them.”
Universal design can include wider doorways, adaptable layouts and accessibility features integrated throughout all units.
The apartments are expected to be located within walking distance of a planned All Points Transit stop. COI and partners are also exploring the potential for licensed on-site childcare to address workforce needs.
Anthony Russo, who does business development for the city, said the Proposition 123 land banking award was critical to allowing COI to secure the site.
“That makes it possible for this project to work,” he said. “These programs are so competitive. Sometimes it takes two or three cycles to get that funding.”
Part of a larger vision
COI’s four-acre parcel is one piece of the planned Hilltop Neighborhood, a 25-acre mixed-income development envisioned along the 6600 Road corridor.
City records show 15 acres at the site were annexed into Montrose in July 2020 under the name Hilltop Health Services Corporation with a senior housing proposal attached to the application. Since then, the concept has evolved and ownership has changed.
The larger Hilltop development area is owned by Housing Partners of Montrose LLC, which has been assembling property in the corridor as part of a broader residential vision. At full buildout, the Hilltop Neighborhood is anticipated to include more than 250 homes, including apartments and for-sale units aimed at creating what city officials describe as a pathway to homeownership.
Russo said COI’s project is currently the only portion of the broader plan ready for public discussion.
“The only thing to talk about right now is the Community Options piece because the other parts are still a work in progress,” Russo said.
The 6600 Road corridor was identified in the city’s Envision 2040 Comprehensive Plan as an area for future high-density residential growth. The city secured a $2 million Colorado Department of Local Affairs grant, along with $1.05 million in city funds, to expand water lines and install sidewalks along the corridor. Workers are currently completing those infrastructure improvements.
If successful in securing tax credits, COI’s project would mark the first tangible step toward transforming the corridor — with affordable and inclusive housing at its core.
To learn more, those interested can contact Community Options.
Justin Tubbs is the Montrose Business Times editor. He can be reached by email at justin@montrosebusinesstimes.com or by phone at 970-765-0915 or mobile at 254-246-2260.
