DENVER | Main Development Thread #7

[Agent Orange]

Originally Posted by The Dirt

Denver is looking into an inclusionary zoning ordinance, with pretty much the same features of every other existing IZ ordinance in the country. They want to make new multi-family developments provide affordable housing, have others pay a linkage fee, and do virtually nothing about zoning and land use. Anyone doing a single-family scrape to build a larger single-family pay a tiny linkage fee, while 80+ AMI renters have to subsidize <80 AMI renters.

This sort of policy has had exactly the opposite of the intended effect in every case. Less new homes get build overall and less affordable homes get built as a result. It's maddening, but at least we get to pat ourselves on the back because we did "something".

This is exactly what I expected to happen with the Julie Gonzales led effort earlier this year. It doesn't take a PhD in economics to see that IZ exacerbates the problem for everyone *except* the subsidized unit lottery winners. Yet that opinion expressed among housing advocates in Denver is received as foaming at the mouth lolbertarian talk.

[mhays]

I wish we had an upvote button. Linkage fees etc. are a serious problem in my city and others that have them.

You can still get a lot of construction, eventually. But it only happens if rents jump, so they can cover the new fees.

[bunt_q]

Originally Posted by Agent Orange

This is exactly what I expected to happen with the Julie Gonzales led effort earlier this year. It doesn't take a PhD in economics to see that IZ exacerbates the problem for everyone *except* the subsidized unit lottery winners. Yet that opinion expressed among housing advocates in Denver is received as foaming at the mouth lolbertarian talk.

Eh. I am not sure the affordable housing problem can be solved. If housing is going to be a problem regardless, I'd love to put in place a program that I can subsequently say "you told us this would fix it, we did it, now shut up." Sound logic and economics haven't found their way into the left-on-left crime affordable housing discussion in any major U.S. city that I am aware of. I am not foolish enough to think that if nobody else can solve it, we in Denver will be able to. So I want a "now shut up" tool.

[rds70]

AMLI 8th and Broadway rendering (16 stories, 366 units):

[mhays]

Originally Posted by bunt_q

Eh. I am not sure the affordable housing problem can be solved. If housing is going to be a problem regardless, I'd love to put in place a program that I can subsequently say "you told us this would fix it, we did it, now shut up." Sound logic and economics haven't found their way into the left-on-left crime affordable housing discussion in any major U.S. city that I am aware of. I am not foolish enough to think that if nobody else can solve it, we in Denver will be able to. So I want a "now shut up" tool.

True, nobody has gotten it right. But the answer exists.

At the 30-80% level, we can do several things in combination. We can upzone enough that land is affordable on a per-unit basis, reduce square footage requirements, expand tax credits, eliminate parking requirements, streamline entitlements, and avoid fees. We can build good transit to help people live well without cars. Some of these factors aren't useful everywhere, but it's a tool kit. Misslng middle zoning can help provide family-size units while avoiding elevators.

For middle-class housing, we can do some of the same things. Zoning, entitlements, etc.

At the true poverty end, we can subsidize construction, more than we've typically done. We can also allow the smallest units, all the way down to ones like college dorm rooms for single people.

[TakeFive]

Source

Originally Posted by bunt_q

Eh. I am not sure the affordable housing problem can be solved. If housing is going to be a problem regardless, I'd love to put in place a program that I can subsequently say "you told us this would fix it, we did it, now shut up." Sound logic and economics haven't found their way into the left-on-left crime affordable housing discussion in any major U.S. city that I am aware of. I am not foolish enough to think that if nobody else can solve it, we in Denver will be able to. So I want a "now shut up" tool.

I hadn't posted this b/c it's a hot mess - but if not now, then when?

Developers pause St. Paul projects after rent control vote
NOVEMBER 6, 2021 By Katie Galioto and Shannon Prather Star Tribune

Unlike most cities with rent control, St. Paul will not exempt new construction, which opponents argue will force lenders and developers to look outside the city.

Less than 24 hours after St. Paul voters approved one of the country's most stringent rent control policies, Nicolle Goodman's phone started to ring. Developers were calling to tell the city's director of planning and economic development they were placing projects on hold, putting hundreds of new housing units at risk.

Don't they want new affordable housing?

Ryan Companies warned before Election Day that the rent control ordinance could prevent them from finding investors for the 760 affordable housing units the city pledged to bring to the former Ford site.

Ryan Companies is a really big developer in Phoenix but Minneapolis is their home. With the noted affordable apartment project I'd assume Ryan was wanting to contribute their efforts towards affordability.

For many, the voter-approved rent control may work fine as landlords will be able to raise rents 4% every year. So whether good weather or bad you just raise your rents 4% every year like clockwork.

I still contend that when it comes to "designated" affordable housing, Denver continues to do a credible job especially by utilizing LIHTC program.

[bunt_q]

Originally Posted by mhays

True, nobody has gotten it right. But the answer exists.

At the 30-80% level, we can do several things in combination. We can upzone enough that land is affordable on a per-unit basis, reduce square footage requirements, expand tax credits, eliminate parking requirements, streamline entitlements, and avoid fees. We can build good transit to help people live well without cars. Some of these factors aren't useful everywhere, but it's a tool kit. Misslng middle zoning can help provide family-size units while avoiding elevators.

For middle-class housing, we can do some of the same things. Zoning, entitlements, etc.

At the true poverty end, we can subsidize construction, more than we've typically done. We can also allow the smallest units, all the way down to ones like college dorm rooms for single people.

Oh, I know what the solution looks like on paper. I don't know what a politically achievable solution looks like in dense areas. (There's a reason why sprawl - which is another solution - has been the route taken by the only cities we have that have managed to remain affordable. Grass and cattle don't complain at public meetings.)

[DUPio]

Originally Posted by RyanD

I've lived in Union Station since 2019. It really isn't super safe at the moment. I've been threatened multiple times around my building, been followed down Chestnut, had homeless follow me inside my apartment building, dealing with 11 straight months of break-ins, hard drugs (mostly meth) being used in my hallways, stairwells, trashed areas inside and outside the building. We are moving next month and couldn't be more excited to get out of this neighborhood. We aren't super happy about moving but it's become such a background stress, it's the only right thing to do.

Your description really hits home.

I moved to the Union Station neighborhood in 2015 just across the industrial train tracks by the glasshouse. It was such an amazing place to live for several years. Easy access to the Cherry Creek trail, Platte St, LoHi, lightrail/train, LoDo and eventually even had multiple grocery stores in walking distance. Was truly something special. But slowly the homelessness started to creep up. Started to feel unsafe at dusk then slowly to the point where I felt uncomfortable with my wife walking around in the middle of the day. Drugs and needles out in the open, mentally ill homeless people yelling and acting aggressively, finding homeless people sleeping in the common hallway of our apartment (on multiple occasions and not just when freezing cold), multiple car break-ins in our underground garage etc.

We left around 2019 and it probably wasn't as bad as I'm sure it is now but you could sense it wasn't going in the right direction. When you don't feel particularly safe in a place like that and are paying a premium to live there, it's very hard to justify.

We were also very saddened to leave but it was the right thing for us to do. It still makes me sad to think about because living there before a lot of the negatives was such a cool experience that I probably won't get to replicate again in my lifetime. I hope Denver can find leadership to help steer it in the right direction as it goes through growing/urbanization pains. We're in Phoenix now but will be back in a few years. There are lots of awesome places to live both in CO and beyond, I'm sure you'll love your new digs. In the meantime I hope Denver can avoid going the same route as San Francisco.

[SirLucasTheGreat]

Originally Posted by rds70

AMLI 8th and Broadway rendering (16 stories, 366 units):

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

[TakeFive]

Originally Posted by mhays

For middle-class housing, we can do some of the same things. Zoning, entitlements, etc.

At the true poverty end, we can subsidize construction, more than we've typically done. We can also allow the smallest units, all the way down to ones like college dorm rooms for single people.

Denver is very different from Seattle. Downtown is nice but it's not the hot location and not nearly as dense as Seattle.

Ken/DenverInfill has been living his dream. The great majority of new development has been on the periphery where there was endless amounts of land, much of it bought when it was relatively cheap by today's standards. Touted RiNo is a vast area of acres and acres of land but there are other areas like Arapahoe Square which is attached to the CBD.

Over the last decade thousands of units have been added some in nice building and some not so nice (architecturally) but if there's one thing worth noting is the wide variety of styles and types of apartment units. X Denver is building their third project, a 22-story beauty that includes your rent a (dorm) room style of option. There has been a number of microunit buildings also developed.

The bulk of new construction of 'luxury' apartments varies as to rent levels but Denver has only a modest amount of higher end rentals. It has a good variety of 'market rate' options.

[mhays]

The same principles apply. And you can (and apparently do) avoid some of our mistakes, most notably the lengthy and demanding entitlement process and some of the millions in fees for any significant project. And land is cheaper.

[Agent Orange]

Originally Posted by bunt_q

Eh. I am not sure the affordable housing problem can be solved. If housing is going to be a problem regardless, I'd love to put in place a program that I can subsequently say "you told us this would fix it, we did it, now shut up." Sound logic and economics haven't found their way into the left-on-left crime affordable housing discussion in any major U.S. city that I am aware of. I am not foolish enough to think that if nobody else can solve it, we in Denver will be able to. So I want a "now shut up" tool.

Has that worked in any other city? Has mandatory inclusionary zoning without any other land use reforms or upzoning shut anyone up? Even if it did, is less bitching on Twitter/NextDoor worth the consequences of a regressive, supply suppressing policy? More expensive housing and less of it isn't going to make Denver a better place. At least a lot of other cities that have implemented IZ have coupled it with upzoning and parking reform, etc. Still not a fan of forcing market rate buyers to subsidize "Affordable" units - but maybe with major upzoning and other reforms you can dilute IZ's distortionary effects.

[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 🞵🞵🞵🞵🞵 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 🞵🞵🞵🞵🞵 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.