DENVER | Main Development Thread #7

[Stonemans_rowJ]

There have been lots of small 1 bedroom units and studios added, many probably vacant.

The average millennial is now, what, 32 or 33 years old, many are married or marrying, many are having children. This demographic is not looking for a 1 bedroom apartment in Sun Valley. They are looking in the neighborhoods. There is little if any new supply there and the boomers are staying in place.

[mhays]

Land costs tend to be FAR more sensitive than construction costs. In my area land has tripled since the last peak, and much of that is specific to a lack of developable capacity, even while we could technically boom like this for many years.

[TakeFive]

Originally Posted by mhays

Land costs tend to be FAR more sensitive than construction costs. In my area land has tripled since the last peak, and much of that is specific to a lack of developable capacity, even while we could technically boom like this for many years.

When it comes to shopping for land in Denver I have no clue.

What I do know is that Cypress (a Dallas based REIT) out of their Austin development office recently contracted for more land in RiNO. The site needs to be rezoned from industrial to residential. Golub and Co out of Chicago also bought a site nearby and they are currently doing a master plan for their site. Both these sites can accommodate multiple projects. There's also a few sites where plans have been announced and then you wait the year or however long it takes to get through P&Z and assuming they have the financial backing which in some cases is unknown.

Denver has the advantage in that RiNo is a sprawling area roughly 15 blocks by 6 blocks that will take a couple of decades to build out. It also has some cool industrial adaptive reuse. And yes there's several sites in the CBD looking to build as well. Several sites including high rise buyers from Chicago and Boston have recently purchased land but not yet announced their plans. Canadian developer Amacon is getting ready to break ground on two condo towers.

It's not like nothing is happening in Denver.

Meanwhile the Lakers have a six point lead over the Nuggets at the half.

[mhays]

Is that somehow relevant to my post?

[TakeFive]

Originally Posted by mhays

Is that somehow relevant to my post?

It's relevant to Denver and while I'm happy to be informed about land costs in Seattle it's not relevant to Denver and this is the Denver Development Thread.

Meanwhile Nuggets - Lakers are going to overtime.

[bulldurhamer]

Originally Posted by laniroj

The land logic isn't twisted. The point is this. The City has upzoned or placed beneficial zoning on VERY FEW parts of the City. What that means is there's not enough beneficial zoning to go around for all of the demand (both from people/businesses who want more space/houses and from the capacity of the development community who wants to build more). Case in point, my company could handle about 40% more dollar volume than we currently complete, but we can't find sites or buildings to build/preserve. So, what happens, is exactly what you hate. Folks come into places like Five Points, bulldoze the neighborhoods, and build slot homes on any parcel that has that beneficial zoning. This happens precisely because the City has largely provided beneficial zoning in lower income neighborhoods (when the zoning was enacted), not higher income neighborhoods. Essentially, the City has sacrificed those areas of beneficial zoning (lower income areas) and ALL OF THE GROWTH is concentrated in those very few areas. IF land was upzoned CITY-WIDE, the intense demand for a single neighborhood would diminish and that developer and housing demand would be more evenly spread across the entire City, not just concentrated in Five Points.

If you can't understand this, then I'd be happy to sit down with you and enjoy a tamale at Curtis Park Creamery so I can explain why I think this - supply side economics - but you have to smile the whole time.

As to mitigation, huh? I'm saying TONS of vacant ground is undevelopable (for residential) because most industrial ground has contamination of some sorts. The 🞵🞵🞵🞵 companies used to get away with is absurd - 100 years of blatant pollution. Sometimes it's minimal and it doesn't affect residential development, but many times it does. MOST times it does and there is a cost associated with remediation, if you can even convince a lender to give you money when your property has a giant X on it. Sometimes, remediation isn't possible either because the ground is TOO contaminated or because the cost of remediation it is not economically feasible (even if you got the land for free). Like Gates - you could drop a rock in those monitoring wells prior to demolition and it would float on top of the sludge. Industrial development and residential development have different thresholds for ground/water pollutants/contamination. Ground has to be much cleaner for residential and there's a big cost associated with cleaning it up.

If the entire city was upzoned, everyone would still want to live in the same places. If you’re not biking distance to anything you may as well be in Thornton in the eyes of those demanding the right to be as close to the “center” as possible, like cirrus. With that said, i agree upzoning responsibly should be happening. I dont believe looking at an arial photo without context should be where you do it though.
For example, Skyland seems ripe for a change. Mid century ranches close to the action on huge lots with huge single family scrapes may not be the answer.


Your point about mitigation is going to fall on deaf ears though. Im watching north Cole get developed and it seems the money is there to do it. Cue the tiny violin for the millionaire developers.

[mhays]

I don't live or work in Denver, so used an example I know. But the point is the same -- land costs are much more sensitive (fluctuate far more) than construction costs.

You can introduce all sorts of anecdotes and speculations to confuse things, but the basic points are the same.

[TakeFive]

Originally Posted by mhays

I don't live or work in Denver, so used an example I know. But the point is the same -- land costs are much more sensitive (fluctuate far more) than construction costs.

You can introduce all sorts of anecdotes and speculations to confuse things, but the basic points are the same.

I think I understand your viewpoint.

But a lot of land and lots of sites have been bought over the last couple of years including recently. Scarcity or not, land is being bought and developed and being rezoned - planned for much more development. That was my point. What does it matter the specific price for a specific piece of land if it's all being bought for development anyway.

F**k the Lakers; they won.

[TakeFive]

Originally Posted by bulldurhamer

If the entire city was upzoned, everyone would still want to live in the same places. If you’re not biking distance to anything you may as well be in Thornton in the eyes of those demanding the right to be as close to the “center” as possible, like cirrus. With that said, i agree upzoning responsibly should be happening. I dont believe looking at an arial photo without context should be where you do it though.
For example, Skyland seems ripe for a change. Mid century ranches close to the action on huge lots with huge single family scrapes may not be the answer.

You're the man! Your point about Skyland is well taken.

Originally Posted by bulldurhamer

Your point about mitigation is going to fall on deaf ears though. Im watching north Cole get developed and it seems the money is there to do it. Cue the tiny violin for the millionaire developers.

The way that laniroj talks is also what makes people very nervous about developers. He wants his cake and to eat it too - not that it is unreasonable from a developers perspective.

The City and the powers-that-be need to continue to define the rules and everybody that wants to live and work in Denver will find their way and a place to live.

[TakeFive]

Originally Posted by DenverInfill

First, I would encourage everyone to always view these types of articles with a critical eye.

I finally got a chance to go through this at a pace that my brain could follow along. That's some amazing analysis.

To me it made no sense on its face. For one thing, knowing that new home construction was at a subdued pace for years following the recession or 2010 and that it skewed towards the well-qualified end of the market combined with apartment construction on steroids couldn't possibly add up to what she claimed. But perhaps it closer than I would have thought?

Here's my guess

The data used (in your yellow shaded section) shows that 67,466 new owner occupied homes were completed but only 45,391 rental units were completed. Something's wrong. The latter half of that period between 2010 and 2018 was a time of accelerating apartment construction. It's entirely possible that there were say 15,000 apartment units under construction (throughout the metro area) and many in some stage of completion including renting units.

My guess is that when it comes to data collection there's a significant lag time in accounting for new apartment units while new home sales are highly standardized. Additionally there's not good data on non-owner occupied homes that are rented.

Speaking of apartments

https://www.marketwatch.com/story/rising...till-low-2020-02-13?mod=newsviewer_click

Rising rents drive consumer prices higher in January

The numbers: The cost of staples such as rent, medical care and prepared food rose in January to push consumer prices higher, but inflation more broadly was still relatively tame.

What happened: The cost of shelter, mainly rent, accounted for most of the increase in consumer prices in January. Rents rose 0.4%.

This is a national figure but Welcome to your Wall Street driven apartment life.

[RyanD]

We might as well dedicate this whole thread to TakeFive since the posting ratio is like 4:1.

Btw, the Economy Suites at Belleview Station is almost completely demolished. Saw it on the train this morning.

[TakeFive]

Originally Posted by RyanD

We might as well dedicate this whole thread to TakeFive since the posting ratio is like 4:1.

Btw, the Economy Suites at Belleview Station is almost completely demolished. Saw it on the train this morning.

I know. We need to get off of these crazy topics; I've posted a number of development news comments but nobody seems to care about those.

The Good News is that all the baseball players for Spring Training are now in town. Starting tomorrow (in fact) and for the next 3 months it's 'high season' in the desert. I don't anticipate having the time or interest to spend posting during that time. Gotta make hay while the sun is shining.

[SirLucasTheGreat]

Thanks, Ryan! Now it is freaking time for Shelby's to finally be demolished. Curious what is taking so long. Maybe it might relate to that horrid condo bill currently being floated around the State legislature.

[wong21fr]

Originally Posted by SirLucasTheGreat

Thanks, Ryan! Now it is freaking time for Shelby's to finally be demolished. Curious what is taking so long. Maybe it might relate to that horrid condo bill currently being floated around the State legislature.

The project is still working it's way through the permitting process. Why start mobilizing if you're still months away from pulling permits?

[RyanD]

Originally Posted by wong21fr

The project is still working it's way through the permitting process. Why start mobilizing if you're still months away from pulling permits?

Curious of the same thing as well..

More on the permits front:

Bell Tower - Going through more of the non-design review permitting processes. Just filed a Storm & Sanitary plan.

Convention Center Marriott - Just issued a permit to excavate and pour foundation.

1900 Lawrence - Filed a transportation plan today.

Evolve Towers - Site Development Plan filed

X Denver 3 - From a permitting side, it looks like construction should start any day.

[TakeFive]

Originally Posted by RyanD

Bell Tower - Going through more of the non-design review permitting processes. Just filed a Storm & Sanitary plan.

So they must feel they'll somehow, someway get past the design approval process?

If and when this ever breaks ground we should hold a BIG Party at wong's place.

[CherryCreek]

Originally Posted by TakeFive

You're the man! Your point about Skyland is well taken.


The way that laniroj talks is also what makes people very nervous about developers. He wants his cake and to eat it too - not that it is unreasonable from a developers perspective.

The City and the powers-that-be need to continue to define the rules and everybody that wants to live and work in Denver will find their way and a place to live.

The reality is there's no possible way that "everybody that wants to work in Denver will find their way and a place to live." Even more so, that's not a goal worth pursuing.

Look at this way, would you ever suggest that "everyone that wants to live and work in Cherry Hills" will be able to do so? Of course not, and that's also true for Denver.

I support many policies that will make it harder, if not impossible, for "some" people who would prefer to live in Denver (in the city or or the metro) to do so, such as :

1. Sufficient taxes to pay for a robust public transport system.
2. Zoning that limits certain property uses to pre-defined usage categories.
3. Height limits on buildings in many areas of the city.
4. Continued maintenance and expansion of parks, even if that takes land that could otherwise be used for housing.
5. Adhering to the principle that development should largely pay its way for infrastructure - whether' that's tap fees or streets and sewers.

Denver the city, has defined boundaries that are unlikely to ever expand. Only so much land. And even the metro doesn't have an endless supply of developable land, given challenges of water and infrastructure in our dusty cow town.

All of this adds to the costs of living in Denver, and of adding new housing. And unless you are in favor of construction anarchy - anyone can build anything, anywhere -then every person in this forum believes in the application of "rules" which in one way or another will prevent somone who would love to live here, from living here.

We just have disagreements about what the rules should be.

[The Dirt]

Originally Posted by CherryCreek

The reality is there's no possible way that "everybody that wants to work in Denver will find their way and a place to live." Even more so, that's not a goal worth pursuing.

Look at this way, would you ever suggest that "everyone that wants to live and work in Cherry Hills" will be able to do so? Of course not, and that's also true for Denver.

I support many policies that will make it harder, if not impossible, for "some" people who would prefer to live in Denver (in the city or or the metro) to do so, such as :

1. Sufficient taxes to pay for a robust public transport system.
2. Zoning that limits certain property uses to pre-defined usage categories.
3. Height limits on buildings in many areas of the city.
4. Continued maintenance and expansion of parks, even if that takes land that could otherwise be used for housing.
5. Adhering to the principle that development should largely pay its way for infrastructure - whether' that's tap fees or streets and sewers.

Denver the city, has defined boundaries that are unlikely to ever expand. Only so much land. And even the metro doesn't have an endless supply of developable land, given challenges of water and infrastructure in our dusty cow town.

All of this adds to the costs of living in Denver, and of adding new housing. And unless you are in favor of construction anarchy - anyone can build anything, anywhere -then every person in this forum believes in the application of "rules" which in one way or another will prevent somone who would love to live here, from living here.

We just have disagreements about what the rules should be.

Do you think that a goal worth pursuing is to allow nurses, teachers, waiters/waitresses, and other service workers to live in Denver? Because this is what we're talking about. We're not talking about allowing every millionaire to live in Cherry Hills. We're talking about working class individuals being able to live within reasonable distance of their jobs rather than paying a huge chunk of their paycheck to live close or live farther away and pay a lot more for transportation costs. Affordability and scarcity hits these folks first and hardest because they can't compete with higher earners. I don't know what "construction anarchy" is, but upzoning the whole city would actually release pressure on gentrifying areas and allow more homes to be built in rich areas, which have already been dipped in amber by NIMBYs. I never thought I'd be on a skyscraper page forum long enough to see a majority of folks arguing for less housing.

[RyanD]

Originally Posted by The Dirt

I never thought I'd be on a skyscraper page forum long enough to see a majority of folks arguing for less housing.

Right! I thought I was going crazy. But this is a trending mentality. If you look at a lot of comments on news articles with high ticket items such River Mile and anything else development related, you see these comments everywhere. There's a larger-than-I-would-have-hoped-for crowd opposing things like McGregor Square, FFS. These people think that all the construction is causing rents / home prices to go up when in reality, it's pretty much a simple supply / demand market game. Rents are leveling off because of all the supply coming online.

In addition, all these buildings we said would be 'affordable housing in 5 years' are actually more affordable, what a shock. Hell, I live in one myself that we said, 'yep that'll be affordable in 5 years'. What are some other arguments? 'I'm sick of all these luxury apartments.' If all apartments are luxury none of them are, it's just the new building standard. It's all a marketing scheme. The list goes on..

What I fear most is that this crowd, and I even work with a chunk of these sad people, is that they would bend over backwards to get growth caps on the ballot. That scares the 🞵🞵🞵🞵 out of me.

#RantOver

[Agent Orange]

Originally Posted by The Dirt

Do you think that a goal worth pursuing is to allow nurses, teachers, waiters/waitresses, and other service workers to live in Denver? Because this is what we're talking about. We're not talking about allowing every millionaire to live in Cherry Hills. We're talking about working class individuals being able to live within reasonable distance of their jobs rather than paying a huge chunk of their paycheck to live close or live farther away and pay a lot more for transportation costs. Affordability and scarcity hits these folks first and hardest because they can't compete with higher earners. I don't know what "construction anarchy" is, but upzoning the whole city would actually release pressure on gentrifying areas and allow more homes to be built in rich areas, which have already been dipped in amber by NIMBYs. I never thought I'd be on a skyscraper page forum long enough to see a majority of folks arguing for less housing.

Americans of all stripes are protectionists now. Protect us from immigrants taking our jobs and diluting our culture. Build a wall, ban muslims. Protect our neighborhood character from being threatened by lower income households. Enforce exclusionary zoning but keep adding amenities so I can live the streetcar suburbanite dream.

And frankly, construction anarchy is essentially what we had prior to WWII and especially prior to WWI. And it resulted in incredibly diverse, pragmatic, and desirable neighborhoods. Top down planning doesn't work in many sectors of the economy, and I'd argue no part of our economy is more centrally planned and prescribed than urban land use.