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Mar 10, 2017

Affordable Housing Turns into More Than Just Words in Denver

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Not everyone was at first crazy about the idea.

But last September members of the Denver City Council on a 9 to 4 vote gave the green light to the creation of a fund designed to greatly enhance the city’s affordable housing stock.

“It did not come easily,” says Denver City Councilman Paul Kashmann, recalling the sometimes rancorous debate preceding creation of what is expected to eventually be a $150 million fund to build affordable housing across the city.

“We had to sit down and listen to people who didn’t like this proposal, it was a real negotiations process,” says Kashmann.

Most prominent among the early critics of the plan were Denver’s builders and developers who got hit with a development impact fee that many thought was too steep.

The Colorado Real Estate Alliance, a group partly made up of the Homebuilders Association of Metro Denver and the Apartment Association of Metro Denver, among other parties, prominently lobbied against the fee.

Noting that those fees could be up to $42,000 for a 25,000 square foot building, and well above $100,000 for larger projects measuring more than 75,000 square feet, the Alliance argued that the fees would also ultimately hurt Denver’s economic development.

In so doing, employment opportunities for workers, the very people that the affordable housing fund was designed to help, would decrease.

But city officials pointed to a study determining at what level such fees could be assessed before negatively impacting development in Denver, and determined that the proposal would have a positive impact, partly because it would result in the construction of thousands of new residential units.

“Developers are not evil people,” says Kashmann. “I certainly look at developers as our partners and not our antagonists.”

As detailed, the affordable housing initiative will see the construction of up to 6,000 income-qualified housing units. And they will be built across the city.  

That’s on top of another program in Denver that is working to meet a previous goal of 3,000 new affordable houses set by Mayor Michael Hancock in 2013.

“We are very much going to meet that target,” says Rick Padilla, executive director of the Denver Office of Economic Development.

Serving as a gap financier, the Denver OED, continues Padilla, has helped to see the completion of “2,697 units, with another 1,000 under construction.”

“This is a goal we are absolutely dedicated to,” Padilla adds.

Studies have shown that while Denver has nicely rebounded from the national recession, the average price of a home in the city is now up to $376,000, while the average rent for a one-bedroom apartment is over $1,500.

Those figures have increasingly challenged workers in Denver making less than the national annual wage of $27,000.

In July, Hancock said that he had spoken with “thousands of people who lack the simple advantages so many of us take for granted, like a place to call home.”

“Home ownership,” Hancock continued, “gives families a foundation to build equity, build wealth, and build a life.”

The affordable income fund is expected to bring in around $10 million by the end of its first year in 2018.

Those initial funds will provide enough money for the building of 653 new income-restricted units.

Those units will then be open to families jointly making $64,000 a year, or what is categorized as 80 percent of the area median income.

Although some experts have said that Denver’s housing fund is too modest, given the number of people in Denver who make less than $64,000 annually, Kashmann says the program is, at the least, a beginning.

“What we’re trying to do is address a housing crisis that has continued to escalate here,” he says.

“Yes, we have had people in recent years happy that their property values were going up,” the councilman continues, “but many of these same people have said that their kids can no longer afford to live in the city.”

Adds Kashmann: “That’s one of the reasons why we had to do something.”

 

By Garry Boulard

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