Nearly $3.4 million has been allocated to a land acquisition and building program intended to help alleviate a shortage of affordable housing in Grand Junction.

The Grand Junction City Council earmarked the money from $9 million in American Rescue Plan Act funding allocated to the city.

The program will provide funds to assist developers and nonprofit organizations acquire land or subsidize the cost to develop affordable housing.

Tamra Allen, community development director for the City of Grand Junction, said the program offers a way to overcome barriers in purchasing land to develop for affordable housing. Land and building acquisition costs, especially in developed area of the city, constitute a significant factor in the cost of developing affordable housing — about 10 percent to 15 percent of the overall project, Allen said.

“This program is really exciting for many of our local developers who often need to move quickly when opportunities arise to purchase land,” Allen said. “The new land and acquisition program provides support for those wanting to build affordable housing as land prices continue to increase and put affordability even further out of reach. In the absence of this program, developers would have to quickly identify grants which are extremely competitive and difficult to receive and or other financing that today comes with high interest rates.”

The program also fits with a city housing strategy of allocating city owned land or acquiring vacant or underused properties for affordable and mixed income housing, Allen said. “This new program will create more opportunities for housing choices that meet the needs of people of all ages, abilities and incomes.”

The program will allow applicants to apply for funding to purchase land or buildings to build affordable units or convert existing structures into affordable units.

Projects will be assessed based on four factors, including readiness and capacity, effects on housing needs, sustained and equitable support and sustainable development.

Projects under $300,0000 that meet or exceed expectations in all categories will be considered for funding through an administrative approval process rather than go to the city council for approval.