DENVER | Main Development Thread #7

[TakeFive]

Originally Posted by Agent Orange

At least a lot of other cities that have implemented IZ have coupled it with upzoning and parking reform, etc.

For example? Srsly I'm curious b/c there's lots I'm not aware of.

[mhays]

For example, Seattle has tried to roughly equalize benefits vs. the new fees, including more height.

But that's only limiting the negative effects. What if they (speaking crazily here)...used policy to help reduce market-rate costs? Like allowing the added height and not charging the fees?

[twister244]

The biggest problem with Denver has been the imbalance of supply and demand. It's been that way for years upon years now. There simply isn't enough for-sale housing being built. Maybe demand will finally level off at some point when people simply give up for the burbs or other metro areas. I know that because I'm one of those people. I still own my condo in Denver, but I really don't have plans on returning to live there. Chicago feels more home for me than anywhere. While prices there are going up too, it's still vastly more affordable compared to Denver at this point. That's especially true when you toss in all of the big city amenities you just don't get with Denver.

According to Zillow:
Denver's typical home value is $568,178
Chicago's typical home value is $300,430

Why even try when I can drop a down payment for a condo in Chicago, work remotely there, and enjoy a much larger city where I am closer to family. Yeah, the weather sucks in the Winter, but it's easy to escape for a while if you can work remotely.

Circling back, the only way this problem goes away for Denver is if demand drops, or supply increases. Otherwise, it's just going to continue to get more expensive.

[TakeFive]

Yes, but...

Originally Posted by mhays

For example, Seattle has tried to roughly equalize benefits vs. the new fees, including more height.

But that's only limiting the negative effects. What if they (speaking crazily here)...used policy to help reduce market-rate costs? Like allowing the added height and not charging the fees?

I know Seattle was hard hit by the Pandemic with a lot of downtown vacancy. So did that create a bunch of more affordable housing?

Tell me how the land costs plus the cost of construction has developers rushing out to build much more affordable housing.

Tinkering at the margin is not something I see doing much - if the cost of land and construction make it unrealistic (or undesirable to developers) to build affordable housing on any scale.

Chicago is not a good comparison

Originally Posted by twister244

According to Zillow:
Denver's typical home value is $568,178
Chicago's typical home value is $300,430

Why even try when I can drop a down payment for a condo in Chicago, work remotely there, and enjoy a much larger city where I am closer to family. Yeah, the weather sucks in the Winter, but it's easy to escape for a while if you can work remotely.

Circling back, the only way this problem goes away for Denver is if demand drops, or supply increases. Otherwise, it's just going to continue to get more expensive.

Chicago is a much bigger city/metro by population and land area. It's also much older ie has a much larger stock of older homes, despite the surge of new projects over the last decade.

Chicago, like Phoenix has lots and lots of sprawl (in addition to its high urban density) with larger areas that are less desirable as well as areas that are more desirable. Add in higher property taxes and it's not hard to understand why the 'average' cost is much less in Chicago than in Denver. Typical value for a home in Phoenix is $375,000 and it looks like Chicago property taxes are ~four times as much. (The most recent info has the typical cost in Phoenix now at $410,000)

[The Dirt]

Chicago has one key difference that you didn't mention. It's shrinking.

[coolmandan03]

Originally Posted by SirLucasTheGreat

Is this at the SW corner of 8th and Broadway (i.e. the southernmost lot in Golden Triangle)?

Yeah - this image is from the intersection of 9th and Broadway looking south (across from the Fainting Goat). Looks to replace two small single-story commercial and 1 level parking garage.

[Curtis Park]

Originally Posted by SirLucasTheGreat

Is this at the SW corner of 8th and Broadway (i.e. the southernmost lot in Golden Triangle)?

According to the DBJ, it's the NW Corner. The SW is Rickenbaugh and I've not heard anything about them moving.

"By James Rodriguez – Reporter, Denver Business Journal
Apr 12, 2021, 9:48am EDT
AMLI Residential has proposed a 16-story, roughly 380-unit apartment building at the northwest corner of West 8th Avenue and Broadway, according to a recently filed concept package."

[twister244]

Originally Posted by The Dirt

Chicago has one key difference that you didn't mention. It's shrinking.

Not quite.....

Total city population actually grew slightly from 2010-2020. More importantly though, while some neighborhoods on the West/South sides are still shrinking, many parts of the city have grown tremendously over the last decade. The downtown area is by far, not shrinking. With Denver, there aren't any parts of the city that have escaped growth and higher prices.

[twister244]

Originally Posted by TakeFive

Chicago is not a good comparison

Chicago is a much bigger city/metro by population and land area. It's also much older ie has a much larger stock of older homes, despite the surge of new projects over the last decade.

Chicago, like Phoenix has lots and lots of sprawl (in addition to its high urban density) with larger areas that are less desirable as well as areas that are more desirable. Add in higher property taxes and it's not hard to understand why the 'average' cost is much less in Chicago than in Denver. Typical value for a home in Phoenix is $375,000 and it looks like Chicago property taxes are ~four times as much. (The most recent info has the typical cost in Phoenix now at $410,000)

I'm not saying Denver and Chicago are apples to apples. Of course they are totally different cities. My point was to highlight that Denver is increasingly tipping into the "stupid expensive" category for many people that either live there, or were thinking about moving there. Say what you want, but a $600k house is a $600k house, taxes or not.

Also - "Chicago, like Phoenix" is an insane statement to make. Phoenix is a srawled out mega suburb in the desert. Yes, Chicago has massive sprawl too, but it has a big city core to it. Phoenix doesn't have anything remotely close to that.

[wong21fr]

Originally Posted by twister244

The biggest problem with Denver has been the imbalance of supply and demand. It's been that way for years upon years now. There simply isn't enough for-sale housing being built. Maybe demand will finally level off at some point when people simply give up for the burbs or other metro areas. I know that because I'm one of those people. I still own my condo in Denver, but I really don't have plans on returning to live there. Chicago feels more home for me than anywhere. While prices there are going up too, it's still vastly more affordable compared to Denver at this point. That's especially true when you toss in all of the big city amenities you just don't get with Denver.

According to Zillow:
Denver's typical home value is $568,178
Chicago's typical home value is $300,430

Why even try when I can drop a down payment for a condo in Chicago, work remotely there, and enjoy a much larger city where I am closer to family. Yeah, the weather sucks in the Winter, but it's easy to escape for a while if you can work remotely.

Circling back, the only way this problem goes away for Denver is if demand drops, or supply increases. Otherwise, it's just going to continue to get more expensive.

The problem likely doesn't go away for Denver unless it a) goes the way of Detroit and/or b) goes pro-development and undertakes a citywide upzoning coupled with incentivizing any and all new development. Which I don't think would happen because we've decided that people get a voice in how their neighborhoods develop which really means that said neighborhoods are dipped in amber and should never change.


I think your points on Chicago are valid regarding urban desirability vs. Denver's lesser urban desirability coupled with the outdoor life. But the cheaper price point in Chicago gets less advantageous if you do factor in the property tax difference and some of the additional costs such as private education (if you elect to have kids). But for your situation it certainly seems like a win-win in relocating from Denver to Chicago give your lack of kids, proximity to family, and the upgrade to the urban environment.

[mhays]

Originally Posted by TakeFive

Yes, but...

I know Seattle was hard hit by the Pandemic with a lot of downtown vacancy. So did that create a bunch of more affordable housing?

Tell me how the land costs plus the cost of construction has developers rushing out to build much more affordable housing.

Tinkering at the margin is not something I see doing much - if the cost of land and construction make it unrealistic (or undesirable to developers) to build affordable housing on any scale.

Greater Downtown Seattle apartments were 10.5% vacant a year ago but 5.9% today, based on arbitrary land boundaries I drew in CoStar. It looks like asking rents fell about 12% from their pre-Covid peak before snapping back to new highs -- from about $3.20/sf to $2.90, then $3.25. Some of that's due to new construction.

As for condos, we don't have much supply for similar reasons to Denver, but Zillow thinks mine is still down. Foreign buyers and semi-closed offices are huge factors, so hopefully reopening borders and offices will help.

Regarding your second point, we aren't doing it all right. Land costs can be $50,000-$100,000 range per unit based on some examples, even for micros, and could drop substantially if we upzoned enough. Our entitlement process takes way too long and is too demanding. But we're getting a lot of new housing that uses a mix of big-ticket savings (tiny units, little or no parking) or "on the margins" stuff like Opportunity Zone investments, tax abatements, and entitlement fast lanes for designated affordable projects.

Construction costs are a separate issue we can't solve with policy.

[Agent Orange]

Originally Posted by twister244

There simply isn't enough for-sale housing being built. Maybe demand will finally level off at some point when people simply give up for the burbs or other metro areas.

Hate to break it to ya but the suburbs aren't cheap either and housing is not suddenly plentiful once you leave the City and County. Home values there have tended to grow faster than the city in the last few years. I know so many people who've made the Highlands to Arvada/Westminster move when it was time to have kids and there aren't really bargains to be had. And Covid has only accelerated the desirability of the burbs. Moving to Greeley, the Springs or Pueblo will increase your buying power though.

[TakeFive]

You'd make a good politician

Originally Posted by twister244

Also - "Chicago, like Phoenix" is an insane statement to make. Phoenix is a srawled out mega suburb in the desert. Yes, Chicago has massive sprawl too, but it has a big city core to it. Phoenix doesn't have anything remotely close to that.

Talk about taking something out of context. Regardless, the topic was the typical cost of a home according to Zillow. BTW, is Zillow's data for city only or is it of the whole metro area? In either case I'm going to assume that Zillow's data doesn't discriminate by urban versus non-urban.

With respect to both cities while Phoenix is the 5th largest and Chicago is the 3rd largest by population, Phoenix has only ~60% of the population of Chicago. This speaks (partly) to the difference in density although I also assume Chicago doesn't have the vast areas of mountain and desert preserves. Good guess that the population difference narrows significantly over the next decade as TSMC brings over 10,000 new jobs in addition to Intel adding about the same.

A comparison between Denver and the Twin Cities would be more apt based on relative size where the average cost of a home is ~$335,000 so similar to Chicago.

I can agree with wong that there's nothing wrong with wanting to live in Chicago where homes are less expensive, especially if it feels more like home to you.

[TakeFive]

I still like to think of Denver as a Hybrid City-metro area

Originally Posted by Agent Orange

Hate to break it to ya but the suburbs aren't cheap either and housing is not suddenly plentiful once you leave the City and County. Home values there have tended to grow faster than the city in the last few years. I know so many people who've made the Highlands to Arvada/Westminster move when it was time to have kids and there aren't really bargains to be had. And Covid has only accelerated the desirability of the burbs. Moving to Greeley, the Springs or Pueblo will increase your buying power though.

The front range does sprawl especially along the foothills.

With respect to Denver-metro the South and Southeast have always been a favored area and more expensive. The one advantage with the SE is lots of multi-family were also built along the way. The NW part of the metro area has also been a favored area.

The less desirable or more affordable areas of Denver are to the north, the northeast and east and to some extent the SW parts of Denver and South Jeffco.

New development in Commerce City and out by DIA (for example) are (finally) providing a more affordable product and b/c they're newer they are still nice places to live generally and not that far from downtown Denver. This new development also favors mixed-use and mixed density.

So Denver will continue to sprawl but nothing like the sprawl in Texas, desert cities and Los Angeles where as a result there exists much more affordable housing.

Originally Posted by mhays

Construction costs are a separate issue we can't solve with policy.

Agree that local policies are largely impotent with respect to construction costs but certainly national policies can have an impact to including tariffs and such nonsense.

[mhays]

Well, local building code updates are adding substantial cost in my area, but I'm referring more to supply chains, labor costs, etc., including the tariffs.

[laniroj]

Originally Posted by TakeFive

For example? Srsly I'm curious b/c there's lots I'm not aware of.

Read the report link I posted for Denver's expanding housing study. Just so we're all clear, the City of Denver used to have an IZ policy for for-sale units only. It didn't work. In fact, it didn't come close to working. Over however many dozen(s) of years, I think it produced something like less than 100 units of housing.

[Denver]

Storybuilt is proposing a new 94 unit condo building at 2137 Glenarm Place. Looks like it is making its way through permits. I do not have any other info.



https://www.storybuilt.com/cities/denver/archie/

[The Dirt]

It's too bad they ditched the 8 story proposal because they were scared that the rezoning would fail due to Candi and her bullshit.

[gopokes21]

Huge $1 billion proposal for the Elway's side of Cherry Creek.

https://www.bizjournals.com/denver/news/2021/11/18/cherry-creek-west-denver-east-west-partners.html

Wow. The Whole Foods and parking across the street is getting redeveloped, too.

[TakeFive]

Proposed common area for Cherry Creek West


Rendering provided by East West Partners via Denver Post

Developer announces “Cherry Creek West” as upcoming addition to shopping center
November 18, 2021 By JUDITH KOHLER - The Denver Post

East West Partners to collaborate with Cherry Creek’s owners to transform land adjacent to shopping center

The land just west of the Cherry Creek Shopping Center is in store for a major makeover.

East West Partners, a longtime Colorado developer whose projects include Denver’s Riverfront Park and the redevelopment of the Union Station neighborhood in Lower Downtown, said Thursday that it is launching “a transformative redevelopment” of the site over the next several years.

Where exactly is this going.

The project, called Cherry Creek West, will stretch from University Boulevard on the east to Clayton Street and from First Avenue on the north to the Cherry Creek waterway. While the planning is in the early stages, East West Partners’ vision is to create a place where people can live, work and spend time.

Amy Cara, managing partner of East West Partners, said the goal is to create a neighborhood that includes living and work spaces while connecting the Cherry Creek area to its namesake, the creek that runs along the southside of the property.

“This is a site we’ve had a lot of interest in because it’s really the gateway to Cherry Creek,” Cara said.

gopokes21; Thanks for the Heads UP