DENVER | Main Development Thread #6

[bunt_q]

Originally Posted by EngiNerd

This would apply to the entire county, not just the city.

It would ONLY apply to the county, but NOT in the city or other incorporated areas of the county, if I'm not mistaken.

[bunt_q]

Originally Posted by corey

I would love to see the lots on both side of Market St between 18th and 19th Sts be filled with high density, small for sale condos with even some micro units. And have a low parking space ratio. No one has even built apartments there in the middle of this huge apartment construction boom that has been going on for several years now. It would provide a large amount of low end condos in a downtown location close to good transit. I think the city could get involved in this and make it a reality, but I don't really know how that works. One problem with entry level homes and condos is that people with extra money buy them as investment properties to rent out, which brings us back to the same problem of a lack of affordable for sale housing.

If that does happen, it won't happen at that location because of the LoDo design requirements. That's not the place to start our quest.

Originally Posted by TakeFive

That's not nearly the cure-all that you are imagining. Aside from Miami which is totally different most of the country is not building many condos and even in Miami and other places the condos are not affordable.

Getting the construction defects law fixed will help at the margin and in new TOD and sprawl development. It will help to provide a better mix over time but Denver has been building what the market has demanded - mostly.
.

All data to the contrary. 20%+ of new housing in every other metro. I assume that's the "not many" you're referring to. 2% here. Enough said. "Not many" is still 10-times more.

[mhays]

The percentage of new housing figure isn't the only metric. Different cities have different ratios in the rent/sale values of similar properties. If Denver's sale values aren't high enough, the market will build rentals.

In my city multifamily construction is more like 95% rent, 5% sale. We have condo law issues too, but values are substantially higher, which covers the added risk. Of course both cities also face that li'l issue of the presale concept not working.

[Brainpathology]

So the relatively pathetic figure of 5% is still 150% higher than Denver's.

This isn't directed at you MHays because I have no idea what the situation in Seattle is.

But as far as Denver is concerned, it would be entertaining if it wasn't so infuriating to watch people who claim to be liberal/data driven run like a republican debating climate science to every possible explanation for observed reality except what is right in front of them.

There's a BIG LOCKED door in front of everyone and we're trying to walk through the walls to get into the room instead of getting a key made.

[mhays]

On development issues, the public doesn't trust developers, contractors, architects, realtors, craftspeople, or anyone else related to the industry. We're making money, and are therefore tainted. Something like "let's do X so condos make sense again" is just us rich people trying to get richer!

I assume it's the same way in medicine. Can't trust the neuropathologist!

Preserving personal property values, of course, is NOT self-interest or tainted. Just just American blood being red, and beyond question.

[TakeFive]

Originally Posted by Brainpathology

YEah no.. sorry but before the law lots of condos... so many that they nearly ruined the Golden Triangle for being built all the time.. so many in fact that the law was passed because they were being built too fast and too shitily. After the law none. And still... townhomes EVERYWHERE... so many that we are willing to rob private citizens of their retirement plans just so we can keep more from being built. What's the difference? They aren't subject to the law.

Uh sorry but there wasn't a magical law that was passed. It resulted (as I understand it) from court decisions that referenced several laws that were passed even well before it became a problem.

All those condos and townhomes you reference all came before the Great Recession. Everything has changed since that time all over the country.

Originally Posted by bunt_q

All data to the contrary. 20%+ of new housing in every other metro. I assume that's the "not many" you're referring to. 2% here. Enough said. "Not many" is still 10-times more.

Oh this should be fun. Bring it, I want to see those sources. Is the data from before or after the Great Recession, urban or suburban, high end or affordable? Lots of 3/4 of $million and up condos available in Miami. Is that what your jealous of?

I didn't and am not saying it's having zero impact.

[Scottk]

Originally Posted by bunt_q

Umm, no. You can't get that home for under $325k now. In University Hills it would be even more costly. I was looking this weekend at homes in the $325k price point, and there are really only half a dozen or so out there on any given day. None in Denver-proper to speak of. One I looked at in Englewood was under contract the same day it went on the market.

Reading things like this makes me think that I should just move to SLC or Boise.

For the same amount of money I am paying to live in Denver metro I could live in the hippest and most urban parts of those cities.

Sure, neither of those places can hold a candle to Denver, but I could actually afford to live in a walkable urban area in Boise / SLC, unlike Denver.

And, at least I would be staying in the mountain west. (Good quality of life)

[Brainpathology]

Alright. Let's leave the status quo the way it is. Obviously since the interpretation of existing laws started this and not a new law the effects we are seeing are obviously wrong. Clearly having JUST TWO HOA officers agree to sue is the absolute perfect way to do things. And you're absolutely correct. Not a single row home row has been developeed since 2008. (I mean seriously. Usually your posts have at least a thin veneer of the smell of thought or honest appraisement of reality)

Sorry to bring up an imagined problem I've made up for entertainment. I mean I was just trying to avoid the gigantic hardship of waiting an entire year extra to save what I'll need to buy something downtown. Boohoo. I hope I can hold out. I'm not at all trying to convince people of something that will actually help the city.

You continue addressing the real problems plaguing Denver development, like smelly teenagers on the mall; one of those problems that absolutely IS unique to Denver.

[Brainpathology]

Originally Posted by mhays

On development issues, the public doesn't trust developers, contractors, architects, realtors, craftspeople, or anyone else related to the industry. We're making money, and are therefore tainted. Something like "let's do X so condos make sense again" is just us rich people trying to get richer!

I assume it's the same way in medicine. Can't trust the neuropathologist!

Yeah it actually is very much the same I suppose.

[bunt_q]

Originally Posted by Brainpathology

I mean I was just trying to avoid the gigantic hardship of waiting an entire year extra to save what I'll need to buy something downtown.

You're not actually moving back here, are you? Personally, I think it'd be crazy for anybody who's halfway knowledgeable to make the choice to move to Denver today. Some of us are stuck here. And most newcomers just don't know - they're pack animals doing what pack animals do. But to consciously charge into the fire? That's heroic. You're heroic. If you do it.

[Brainpathology]

I'm looking to get a place to move my mother into for reasons that aren't really appropriate to discuss here but that involve her siblings taking advantage of her proximity to her aging parents and not helping her, and that said siblings will be moving into the home her parents owned and will expect the same help for themselves, and she being WAY too smart to move to Orlando or any other city besides Denver.. it's where her family is (because for some reason she hasn't disowned them), it's where I visit as much as I can, it's where she grew up etc etc etc. And yes I do plan to move back there sometime. After everything else.. it's my home. It's not going to be SOON. But it's in my long range plans. If I don't do something more affordable like buy half of New Zealand and move there.

Clearly Denver is filled with voters and policy makers who are very much too stupid to see what is smashing them in the wallet for the last 7-8 years. I obviously can't change that. But I CAN after a longer wait than should reasonably need to happen do exactly what you said.. throw money away into a market that will most likely crash either from its own weight or when the law is changed or reinterpreted or whatever precise exact detailed term happens to it that will satisfy those who want me to articulate the tiniest nano-meter accurate proximate cause of the problem before they will consider that the problem exists ("I don't believe you just delivered a baby ma'am unless you can prove to me who the father is").

So it's kinda personal.. I don't have a sentimental attachment to Denver other than a vacation destination, and honestly besides a few people on this board and who have earned enough after school to stay in Denver the only attachment Denver has anymore is memory, mountains, buildings that I personally got to see get built, and well.. sports.

But I will most likely be buying there in several years. New condo or townhome or old it will need to be done.

[TakeFive]

Originally Posted by Brainpathology

And you're absolutely correct. Not a single row home row has been developeed since 2008.

Sorry to bring up an imagined problem I've made up for entertainment.

Just to clean up a couple of things. Of course there's been some row home development. Two new projects just broke ground recently east of downtown and there's a lot of it in Highlands. But would you not agree that this isn't nearly enough to solve the tight housing market?

Yes, the condo defects law is a big issue and I have argued as much many times. Those who would build larger projects feel they have a big target on their back so why bother.

What I am also saying is that from all that I've read similar markets to Denver that are active from Seattle on down the coast, Austin, Dallas, Houston, Charlotte, Atlanta etc have been experiencing tons of apartment construction but very little condo construction. Plus my post from two pages back discussed the lack of starter homes all over the country. It's not just Denver. Starter homes could include condos of course.

While places like Seattle and Austin are now revving up to build high rise condo projects but as mhays points out, these are mostly still in the planning phase and who knows what and at what price point they will actually happen?

[TakeFive]

Originally Posted by Brainpathology

But I will most likely be buying there in several years. New condo or townhome or old it will need to be done.

I keep alluding to... but I can only offer vague possibilities and promises but I still think Denver will experience reversion to the mean.

Denver has always been a bit pricier than many places based on higher average per capita earnings and higher land values. As hot as Dallas has been it still has much better housing costs b/c of the availability of land and at lower costs.

It's currently a case of all this in-migration causing a significant demand/supply imbalance. mhays has his valid points about Denver now an urban crazed place so it's hard to suggest much of a drop in the central core home prices but things could loosen up.

So many variables but I'm still suspicious of Denver's underlying job strength. Whether it's Scottk, RyanD or many others they could easily decide to move on to greener pastures. In the meantime let the great construction binge continue so that we'll soon catch up and surpass the the demand.

[Brock Landers]

I agree that we need condo defect reform but I also expect the market will largely fix this problem in the coming years.

In the last five years, Denver home prices have gone up about 55 percent while incomes have gone up... zero. That is a classic housing bubble.

[Brock Landers]

As an addendum to my last post, I thought I would share a few interesting quotes from an article I came across the other day from the late 1990s. There are definitely some eerie parallels here that I think refute the (many) optimists I keep hearing claim that Denver's real estate market is perfectly fine...

"The market will keep going up, there are tons of people moving to Denver"

From 1980 through 1983, Colorado grew by 156,456 people, including a whopping 50,501 in 1982.

"Colorado had become the place to be'' in the early 1980s, said Tucker Hart Adams, chief economist with US Bank, which also was downsized in the United Banks purge. "Colorado was the promised land, and people, many of them baby boomers, just wanted to be here.''

That quickly changed.

In 1985, Colorado was the nation's top state for business failures. For every 10,000 businesses, 326.3 failed that year. Kansas was the second least successful state with 243.6 failures out of every 10,000.

"It wasn't pleasant,'' Adams said. Jobs were difficult to come by, and difficult to hold.

So instead of staying in Colorado, people left. So many left that 1986 would be the first time in more than 20 years that more people moved out of Colorado than moved in. From 1984 through 1989, 54,294 more people left Colorado than moved here.

"Don't worry about low oil prices, our economy is more diversified these days."

Energy often is viewed as the culprit because it carries a big reputation, and industry executives carry a high profile, analysts said.

The energy industry did suffer major hits. In the first recession of the decade, 20 percent of those in the industry lost their jobs. In 1986, another 22 percent were put out of work.

Yet at its peak, the energy industry accounted for only 3.5 percent of the Denver workforce and even less statewide, McCallin said. So although the industry itself took a big hit, the overall effect in most of the state wasn't as devastating as some would think. "If it was just energy, we would've weathered it OK. It would not have been easy, but we would've done all right.''

Here is a link to the article for anyone interested: http://extras.denverpost.com/snapshot/part1g.htm. Food for thought...

[TakeFive]

Originally Posted by Brainpathology

I don't understand how China's growth slowing and Oil prices going down has any effect on zero for sale construction. This entire discussion about how to make prices more affordable is getting to sound like what every discussion with a certain former poster here sounded like.

Just for grins let me address commodities costs a bit; it's a fair question to ask. Of course it's irrelevant to condo construction but...

The dramatic fall off in commodities costs ultimately affects everything any of us buy, consume or build. Industrial metals include aluminum, steel and copper. Even so-called rare earth minerals which aren't really rare are used in most tech products.

All the goods that are imported from Asia are becoming cheaper. This also is due to the strength of the dollar as well as the cost of oil needed to ship them across the ocean.

The biggest costs for agriculture come from the cost of oil, fertilizer and farm equipment. Fertilizer like most chemicals are usually made using natural gas as an energy source. Farm equipment are made from industrial metals.

The cost of the asphalt for roads and most plastics depend on the cost of oil. Everything that goes into new construction includes stuff made from commodities whether it's air conditioners or kitchen appliances or the cranes etc. Wood is a little different but it's not expensive currently either.

In essence lower commodity costs should help hold down the cost of construction and everything we buy like the cars we drive and buses we ride.

[comoneymaker]

They turned down $11 mill? ARE YOU KIDDING ME? That is probably 7x more then that eye sore has made in its 32 years combined! They should have tore that crap-tastic place down and given them nothing!

http://www.bizjournals.com/denver/blog/r...tore-owners-want-blight-designation.html

[architectosity]

Looks like denver just got 3d updated in google maps/earth, seems very recent:

https://www.google.com/maps/@39.7444736,-104.9937843,251a,20y,170.51h,55.17t/data=!3m1!1e3
https://www.google.com/maps/@39.7487774,-105.0036552,426a,20y,10.17h,51.66t/data=!3m1!1e3
https://www.google.com/maps/@39.7205005,-104.9842111,398a,20y,1.73h,52.86t/data=!3m1!1e3

tip: hold down shift while dragging to orbit in maps.

[Stonemans_rowJ]

Originally Posted by Brainpathology

YEah no.. sorry but before the law lots of condos... so many that they nearly ruined the Golden Triangle for being built all the time.. so many in fact that the law was passed because they were being built too fast and too shitily. After the law none. And still... townhomes EVERYWHERE... so many that we are willing to rob private citizens of their retirement plans just so we can keep more from being built. What's the difference? They aren't subject to the law.

We can wax poetic and do mental gymnastics forever.. and apparently we are going to. And I'll grant that the ONLY problem isn't the law. But it's sure beating what's coming in second. You and everyone else can go on and on and on and on and on about the nuances of why everything won't be perfect after/if the law is fixed (and assume I'm making the wildly idiotic statement that things WILL be perfect if it's fixed) and I'll be impressed because boy howdy does that look 'telligent to me just a big dumb guy in the south who doesn't understand how big boys think about things in real cities.

But yeah.. the defects law. Even though it's probably too late to make a big difference to most.. it's still there.. at least lets have it gone so that in 2050 after a couple more crashes and possibly the middle class or upper middle class COULD otherwise afford a condo there may be the slightest possibility that some can get built for them.

Our of curiosity, you don't think lending standards have anything to do with this?

100% LTV on a condo. Good luck.

[Brainpathology]

Originally Posted by stonemans_rowj

our of curiosity, you don't think lending standards have anything to do with this?

100% ltv on a condo. Good luck.

. . .

Originally Posted by brainpathology

. . . I'll grant that the only problem isn't the law. . .