DENVER | Main Development Thread #7

[Ndj]

Another interesting thing of note is that the US isn't even leading or significantly ahead in preventing fire deaths compared to other countries which allow single-staircase multifamily buildings.

https://ourworldindata.org/grapher/fire-death-rates

[TakeFive]

Side Pocket Topic

The housing market just slid into a full-blown correction, says top economist Mark Zandi
May 27, 2022 By Lance Lambert - Fortune

Moody's Analytics chief economist Mark Zandi is ready to call it. He tells Fortune that we've officially moved from a housing boom into a "housing correction."

The real estate data rolling in for April and May shows that the U.S. housing market is softening. New home sales fell 19% to their lowest level since April 2020. Redfin reports 19% of home listings cut their price over the past month. Inventory is rising fast, while mortgage applications and existing home sales are also falling.

When it comes to prices of anything, especially commodities, the value or price is determined by what the last person was willing to pay.

Real Estate is complicated
Values in Denver are different from values in Sheboygan. There's a gazillion micro-markets. Wash Park; a specific style in Wash Park etc etc.

Here's what is interesting
Denver home values are purportedly up 20% from a year ago. But how many actual buyers bought at that 20% price? How many buyers bought half way up the 20% mark. In either case it was a teeny tiny number.

While I wouldn't anticipate a dramatic drop in values, if you lost the last year of appreciation only a very small percentage of homeowners would be impacted.

[coolmandan03]

Originally Posted by Ndj

Another interesting thing of note is that the US isn't even leading or significantly ahead in preventing fire deaths compared to other countries which allow single-staircase multifamily buildings.

https://ourworldindata.org/grapher/fire-death-rates

I don't know the context for this comment, but the US seems pretty good considering our wildfires. How can you compare that with France or Germany?

[mhays]

Europe also tends to have buildings much closer together, and smaller roads that require smaller fire apparatus. And far less liability cost. Lots of variables here.

[TakeFive]

Affordable place to live? What a trip!

Higher rent costs in Denver metro area pricing people out of their homes
May 31, 2022 By: Rob Harris - 7Denver News

DENVER — Rent costs throughout the Denver metro area continue to climb, so much so they are pricing some residents out of their current homes.

How much of an increase are we talking about?

Denver7 talked to Sarah Gardineer from Arvada, who posted on Reddit after her complex informed her of an impending 30 percent climb in rental price.

“I was originally told it was going to be going up by 12 to 15 percent,” Gardineer said. “Much to our surprise, we found out that our rent was going up about $500 per month, or 30 percent more than we’re paying now.

$500 a month increase? That's $6,000 a year. That's serious money for average folk.

Not enough new multifamily being built in the suburbs
Just a wild guess that 3 to 4-story walkup apartments are two-thirds the cost of building downtown.

Need more TOD
The opportunities to build new multifamily near both the Wadsworth Station and the Federal Center Station are immense - as examples. There's other Stations that provide opportunity for more multifamily.

[laniroj]

Originally Posted by wong21fr

Seems like this kind of building layout would run into fire-code issues when it comes to getting such a project approved. But wouldn't a point tower have a layout like this out of necessity (with appropriate fire egress)?

Feel like I've said this many times on this site - Not possible in Denver. Fire department wouldn't go for it, and they have a ton of influence on form/design. Then there's parking - that type of building would have to be built without parking - we all know the rules about that.

[laniroj]

Originally Posted by mhays

That Slate link got THREE pop-ups from Slate itself, despite my ad-blocker. Give me a second to calm down.

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I'd say the fundamental issue with daylighting rooms is building thickness. Codes allow thick buildings, they're cost-efficient, and there's a vast market for shoebox-shaped units, so we build them. With common Denver (and Seattle) floorplates, the stair thing won't be enough for units to touch both sides.

Narrow floorplates can have less spacing from hall to exterior, with each big room having a window.

But if we require narrow floorplates, we simply add cost per unit and decrease a site's capacity.

I'd suggest encouraging this through carrots, such more height. Let developers weigh in on the cost math, but maybe it's would require letting four story zones become six-story zones and six-story zones become 12.

It's all about efficiency. When the big behemoths we see built push below 83-85% efficiency, that starts to make a material dent in costs/returns. A point tower would encompass a smaller project presumably in a very good infill location and would probably top out around 12 stories (if that) with a single staircase on account of needing adequate structural shear. More importantly, it could probably reach a MUCH BETTER efficiency than a big land barge because it doesn't have all the hallway space, extra staircase, etc. Think of a 2 or 3 standard lot scenario (25'x125' standard). With three lots, you'd have 75' width gets you a 3' walkway around the two building sides, 6' hallway, then 63' leftover for vertical structure - almost perfect for a center elevator/stair shaft that exits to a small lobby with 6 units/floor. I bet you could get to an efficiency close to 94%. I'd say there is ample demand for this type of product on the development side - it opens the game up to a whole new world/class of developer which really means more units get produced.

The carrot method could be great to encourage this style of development - I whole heartedly agree this is a missing link in Denver's development pursuits and would open up this type of denser development to more areas of the City - if our crazed council got the zoning carrots right (which they probably can't/won't).

[laniroj]

Originally Posted by TakeFive

...Not enough new multifamily being built in the suburbs
Just a wild guess that 3 to 4-story walkup apartments are two-thirds the cost of building downtown.

Need more TOD
The opportunities to build new multifamily near both the Wadsworth Station and the Federal Center Station are immense - as examples. There's other Stations that provide opportunity for more multifamily.

Just throwing this out there since you always claim we have ample land. Suburbam stick frame multifamily is probably the most profitable real estate asset class to develop (outside of hotels which are really businesses, not real estate). They are low barrier to entry, low skill for GCs/Subs, and land costs are significantly lower than urban property (though not as comparatively low as you'd expect).

Given these facts, don't you think more developers would be building in the suburbs if they could? Given they are not, what might you say are the reasons for this? Would you include lack of adequate zoning?

Not that you care too much what I think, but I do this stuff every day to put food on the table and if I could JUST build giant 3 story walk up apartments in the suburbs without elevators, I would. Problem is there is NO LAND to gobble up and build on. Every land parcel with this zoning sees intense battles for acquisition - it's not materially different than the single family home battles, except the winners are generally large and well capitalized companies with serious cash who can act incredibly fast. The suburban multifamily product has higher returns, less risk, is faster to market and in many cases has comparable rents to urban centers. A three story walkup building is about 7-10% more efficient than a double loaded corridor building and costs on a per unit basis are probably 15% lower than mid-rise product and 30%+ lower than high rise product.

[jhwk]

OZ Architecture posted renderings of 955 Bannock that I have not seen previously:

https://ozarch.com/our-work/955-bannock

[mhays]

Will that point tower have elevators? I'm happy to walk 12 floors most of the time (it's my cardio go-to, dating to the Covid closures), most people won't. You need two elevators in case somebody's moving. That plus MEP risers, separate lobbies, etc., sounds really expensive for 66 units, even with one fewer stair.

[TakeFive]

Mostly it's a NIMBY problem in the suburbs

Originally Posted by laniroj

Just throwing this out there since you always claim we have ample land. Suburbam stick frame multifamily is probably the most profitable real estate asset class to develop (outside of hotels which are really businesses, not real estate). They are low barrier to entry, low skill for GCs/Subs, and land costs are significantly lower than urban property (though not as comparatively low as you'd expect).

Denver suburbs developed out fairly efficiently, meaning they didn't skip over or leave undeveloped land. So any new development by necessity has to be further out which comes with its own difficulties.

Even within Denver it can be painfully slow

Loretta Heights
The 72-acre site has been a work-in-progress since 2018 and they only recently completed the historical renovation of the Pancratia Hall Lofts into affordable units and can now move forward with approved new housing.

4201 E. Arkansas Ave
This 13.2 acre site started the process in 2019 and are waiting to attain State affordable housing tax credit so they can begin construction.

Monaco and Evans
It took a long time to secure the old Kmart on a 13 acre site and win approval for a 3-story project of 287 apartments.

Uplands Westminster
winning zoning approval for this 233 acre site was an exhausting process. Not sure when they break ground for the 2,350 homes that have been approved.

Not sure where the on-again off-again sale of a 59-acre parcel of federally owned land near the Federal Center in Lakewood is at?

[Ich]

https://www.bizjournals.com/denver/n...velopment.html

Cool article about Hurley Place phase 2. It’s planned to have more multi family, a hotel, condo, about 100K sqft. of retail and a 50k sqft. club in the hotel. They are in talks with Sage Hospitality to be the hotel operator and sounds like they hope to start construction sooner than later.

[SirLucasTheGreat]

This will be incredible if fully realized

[laniroj]

Originally Posted by TakeFive

Mostly it's a NIMBY problem in the suburbs

I wholly disagree that it's a NIMBY problem. It's a zoning problem. It's a local leadership problem.

IMO, municipalities should be PROACTIVELY zoning land to accommodate adequate growth, not responding to a spattering of one-off rezone requests which are incredibly long, hard, and expensive to get approved (anywhere really).

[rds70]

FYI, The Lower Downtown Design Review Commission just unanimously approved the Mass, Form and Context review of the Bell Tower project.

They expressed some concerns about the architectural details, but that would be reviewed during the next phase of the development process.

[TakeFive]

Originally Posted by rds70

FYI, The Lower Downtown Design Review Commission just unanimously approved the Mass, Form and Context review of the Bell Tower project.

They expressed some concerns about the architectural details, but that would be reviewed during the next phase of the development process.

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I'm happy to meet you half way...

Originally Posted by laniroj

I wholly disagree that it's a NIMBY problem. It's a zoning problem. It's a local leadership problem.

IMO, municipalities should be PROACTIVELY zoning land to accommodate adequate growth, not responding to a spattering of one-off rezone requests which are incredibly long, hard, and expensive to get approved (anywhere really).

Of course Zoning is a key but whether the powers-that-be are interested in what you want is a different question. And citizen voters are not shy about taking a referendum directly to the voters so be careful what you ask for.

For example, the City of Golden just finished updating their zoning. Their objective was to satisfy those citizens that wanted to preserve the character of their neighborhoods while also promoting new more affordable housing. Whether they hit the sweet spot only time will tell.

Then there's the neighborhood itself. It took the 2nd developer of the old White Fence Farm restaurant site to come to an agreement with the neighborhood.

With respect to Lakewood I know they did a good analysis of potential TOD for the Wadsworth Station. In this case City Council should take to the voters a plan for an 'urban zone' in that area. "Yeah, that kind of plan makes sense nearby the light rail station so we should vote to approve that"

[Chucolo]

Wheat Ridge will have a 100-acre site to redevelop once Lutheran Hospital moves from its location near 38th and Wadsworth to its new digs in 2024. Master plan calling for the usual mix of homes, apartments and some commercial has been approved. Devil will be in the details once the property is sold and new owners seek rezoning. It will likely be one hell of a ride……

[wong21fr]

Originally Posted by TakeFive

Of course Zoning is a key but whether the powers-that-be are interested in what you want is a different question. And citizen voters are not shy about taking a referendum directly to the voters so be careful what you ask for.

For example, the City of Golden just finished updating their zoning. Their objective was to satisfy those citizens that wanted to preserve the character of their neighborhoods while also promoting new more affordable housing. Whether they hit the sweet spot only time will tell.

You know the answer to that. Looks at the overlays and tell me how you think it might promote affordable housing. No chance of multi-family or townhome style development for roughly 90% of the residential areas. The one exception is for the School of Mines to temporarily house the nerds. The zoning keeps neighborhood character and ensures Golden will stays an exclusive enclave of single-family homes with a cut three-block main street area.

Then there's the neighborhood itself. It took the 2nd developer of the old White Fence Farm restaurant site to come to an agreement with the neighborhood.

It took Lakewood residents passing the 1% growth restriction which resulted in Crescent putting fewer units on the property to get it built. Y

You'll like this story, since it's anecdotal and means absolutely nothing, about this nice old retired school teacher I was talking to who voted for the growth measure as her perception was that it would stop those greedy apartment developers from jacking up prices for her and her daughter's family. Three years later she was forced out of her income-restricted apartment due to rising prices as well as her daughter. She's now living in a shared house (some co-op Quaker model) and her daughter has had to move out of the Metro Area.

Payback is a bitch.

With respect to Lakewood I know they did a good analysis of potential TOD for the Wadsworth Station. In this case City Council should take to the voters a plan for an 'urban zone' in that area. "Yeah, that kind of plan makes sense nearby the light rail station so we should vote to approve that"

This is Lakewood where upzoning is as a dirty word as CRT. But considering that half of the high-density residential parcels that are in the station plan area are being developed no vote of the masses is necessary.

[Sam Hill]

Originally Posted by wong21fr

…who voted for the growth measure as her perception was that it would stop those greedy apartment developers from jacking up prices for her and her daughter's family.

Crazy.

I once found myself in the unfortunate position of sitting next to a couple strangers on the bus who were engaged in a passionate conversation about how “developers are coming in here and jacking up all the prices.” As the bus passed a couple construction projects: “Like this one right here! It’s gonna be another ugly eyesore that ruins the neighborhood and you can bet they’re gonna charge like $1800 for a one-bedroom!” (This was a few years ago. Seems quaint now - that $1800 was once the arbitrarily high number a Denverite would pull out of his ass in the midst and of a hyperbolic housing-costs rant.)

“This place used to be affordable before you started seeing these cranes everywhere!”

It’s amazingly stupid. It reminds me of people who are convinced every recession that has ever occurred can be blamed entirely on whatever president happened to be in office at the time.

[rds70]

A couple of more refined renderings of the Bell Tower presented to the LDDRC today:





And a couple of aerials: