DENVER | Main Development Thread #7

[TakeFive]

Originally Posted by CherryCreek

Good point, LoL. Also, simply asking 20 somethings about their future plans and treating that like gospel truth of what is likely to actually happen in their future is pretty questionable. Looking at the maps on the page listed, it would seem that most millennials everywhere plan to move to another city! Lol.

Yup, footloose and fancy free. DP mentions tht the average response of all renters was that 64% plan to move elsewhere.

Originally Posted by mojiferous

Until you actually read the report from Apartment List and realize that Denver is rated much better compared to other cities than the Post makes it sound:
https://www.apartmentlist.com/renton...renters-moving

Thanks for highlighting that link; that's a fascinating report. Always enjoy macro trends.

First thing that popped into my head before I read it was "Sunbelt" cities. With Denver, many who want to move want to stay in Colorado. While Denver will continue to densify there's also little question that "sprawl" along the Front Range will also continue. There will be more sprawl along and east of E-470 as well as along I-70... and Denver will continue to densify.

The migration and growth West of the Mississippi will also continue. States of AZ, NV and ID will continue to benefit from their affordability and proximity to the West Coast.

If I predicted that some of the bloom will come off the Denver rose a year from now would I be right? If not, then maybe the year after or the year after or... Chugging along nationally at about 2% annual growth it's hard to find any "irrational exuberance" or bubbles anywhere other than normal ebb and flow.

[TakeFive]

Originally Posted by jbssfelix

The Denver City Council on Monday unanimously approved a bill that authorizes the creation of an urban redevelopment area at the Emily Griffith Opportunity School at 1250 Welton St. in downtown Denver.

The 2.5-acre site was approved for historic designation in 2016 and was acquired by Denver hotel developer Stonebridge Cos. earlier this year.

Definitely a win-win-win proposition. Any time you can preserve and encourage adaptive reuse it's a good thing.

[TakeFive]

Texas Is a Homebuilding Machine. And the Rest of the U.S.?
August 15, 2017 By Patrick Clark - Bloomberg

Austin is growing especially fast. The metro area is poised to add 30,000 new homes this year, more than double its yearly average from 1980 to 2016.

The article provides a chart of ten growth markets and it shows that Denver, although housing permits are up nicely this year, is still is only producing 56% of the historical norm. If you consider the increased pace of growth in recent years then that figure is probably closer to 45% of what is needed to maintain more affordable housing costs.

Not that Colorado should emulate Texas but the fact they have been the fastest growing state for years and now produce the 2nd highest GDP in the country while remaining relatively affordable including housing costs is certainly impressive.

In Denver there's been a dearth of more affordable construction. That applies to both the City and metro area. No question around the exciting growth in downtown Denver. Whether the lack of a more traditional expansion of more affordable options at the edge is regrettable is an interesting question?

[wong21fr]

Originally Posted by TakeFive

Not that Colorado should emulate Texas but the fact they have been the fastest growing state for years and now produce the 2nd highest GDP in the country while remaining relatively affordable including housing costs is certainly impressive.

In Denver there's been a dearth of more affordable construction. That applies to both the City and metro area. No question around the exciting growth in downtown Denver. Whether the lack of a more traditional expansion of more affordable options at the edge is regrettable is an interesting question?

Lower the cost of construction by decreasing the regulatory approval process and lower labor costs by increasing the percentage of the undocumented workforce?

[EngiNerd]

Originally Posted by TakeFive

Texas Is a Homebuilding Machine. And the Rest of the U.S.?
August 15, 2017 By Patrick Clark - Bloomberg

The article provides a chart of ten growth markets and it shows that Denver, although housing permits are up nicely this year, is still is only producing 56% of the historical norm. If you consider the increased pace of growth in recent years then that figure is probably closer to 45% of what is needed to maintain more affordable housing costs.

Not that Colorado should emulate Texas but the fact they have been the fastest growing state for years and now produce the 2nd highest GDP in the country while remaining relatively affordable including housing costs is certainly impressive.

In Denver there's been a dearth of more affordable construction. That applies to both the City and metro area. No question around the exciting growth in downtown Denver. Whether the lack of a more traditional expansion of more affordable options at the edge is regrettable is an interesting question?

Wow, that's pretty telling about our housing affordability issue here based on lack of supply. Austin, a metro area with about 2 million people has 30,000 housing permits pulled, but in Denver, a metro area with about 2.8 million, only has 25,000 permits pulled. Total population gain since 2010 has been about equal between the two.

Digging a little deeper into housing start, the ratio is about the same, Austin 14,462 starts, while Denver was at 11,038 at the end of last year.

http://www.metrostudy.com/austin-hou...may-cool-2017/
http://www.metrostudy.com/denver-hou...natives-acute/

[CherryCreek]

Originally Posted by TakeFive

Texas Is a Homebuilding Machine. And the Rest of the U.S.?
August 15, 2017 By Patrick Clark - Bloomberg

The article provides a chart of ten growth markets and it shows that Denver, although housing permits are up nicely this year, is still is only producing 56% of the historical norm. If you consider the increased pace of growth in recent years then that figure is probably closer to 45% of what is needed to maintain more affordable housing costs.

Not that Colorado should emulate Texas but the fact they have been the fastest growing state for years and now produce the 2nd highest GDP in the country while remaining relatively affordable including housing costs is certainly impressive.

In Denver there's been a dearth of more affordable construction. That applies to both the City and metro area. No question around the exciting growth in downtown Denver. Whether the lack of a more traditional expansion of more affordable options at the edge is regrettable is an interesting question?

I don't really get why our single family construction during this "boom" has failed to keep up with historical norms. What's missing? Is it just the high cost of labor?

We have land, presumably capital is available for such a boom city. Is it really the "regulatory" obstacles? What "regulatory" obstacles are keeping a lid on construction of single family homes in Aurora or Douglas County?

I see a 9,000 unit development is moving forward east of Aurora. Why didn't that happen years ago? Denver has been in boom since January or 2012. What took so long? Also, since we are so far below historical norms (i.e., what we were building in 2000 to 2007), what changed?

[TakeFive]

Originally Posted by EngiNerd

Digging a little deeper into housing start, the ratio is about the same, Austin 14,462 starts, while Denver was at 11,038 at the end of last year.

http://www.metrostudy.com/austin-hou...may-cool-2017/
http://www.metrostudy.com/denver-hou...natives-acute/

What's amazing is the difference

Austin

Despite strong growth, the median new home base price in 2016 was $284,403 – only 1.7% higher than in 2015.

Builders continue to migrate towards more affordable product – with smaller homes, single-family condo regimes and attached product coming online, all developed in order to serve home shoppers who need or want to stay below $250k

Denver

Homes with base prices above $400k now represent 68% of the market, and homes priced above $500k represent 27% – both all-time highs.

With the average detached new home sales price now at $525,486 for the 12 months ending in December, 6% higher than a year ago, the need for more affordable alternatives is more pronounced than ever.

Certainly Denver has alway been higher priced but it's no longer a cooler place than is Austin (setting aside personal preferences).

Originally Posted by wong21fr

Lower the cost of construction by decreasing the regulatory approval process and lower labor costs by increasing the percentage of the undocumented workforce?

Certainly that has been a factor, still... What was once waaaay out there is now prime opportunity around DIA, I'd think. If they weren't already so busy I could see Texas developers coming into that market big time. In fact, once the Gaylord Rockies hotel is finished next year and the adjacent additional hotels soon after, Texas developes could supplement their workforce by transferring workers up to Colorado during the summer/fall and back to Texas over the winter/spring.

[corey]

The LED lighting on the Confluence makes all of the difference to the accent metal paneling on the side of the building. It makes the paneling look like it has a purpose, to look cool at night. I think this accent was necessary in order to give the building a little visual interest.

[spr8364]

I am trying to build a house in Douglas County for myself and finding builders has been a real challenge (Finding the land was also a big challenge). And, when you do find them, they often throw out silly high prices to see if it will stick. Some trades, I have had to contact over 20 contractors and I'm lucky to get half of them to reply. Part of the problem is that I am trying to build a small "affordable" house and the builders and sub-contractors don't need to spend time on a small house. There are plenty of large expensive houses keeping them busy. In addition, they have to charge a lot because they know they have to pay their workers well, because if they don't they will just get a job with the builder down the street.

I am aware that there is a shortage of labor from Mexico, I have heard it is partly because they can get jobs in their home country and they don't need to come here. Because of that, immigration from Mexico has been down for years.

In the end, I don't know how this plays into the spec construction market though other than maybe the border states get all the laborers and fewer trickle up to us in Colorado.

[jbssfelix]

Originally Posted by EngiNerd

Wow, that's pretty telling about our housing affordability issue here based on lack of supply. Austin, a metro area with about 2 million people has 30,000 housing permits pulled, but in Denver, a metro area with about 2.8 million, only has 25,000 permits pulled. Total population gain since 2010 has been about equal between the two.

Digging a little deeper into housing start, the ratio is about the same, Austin 14,462 starts, while Denver was at 11,038 at the end of last year.

http://www.metrostudy.com/austin-hou...may-cool-2017/
http://www.metrostudy.com/denver-hou...natives-acute/

Being a current homeowner in Austin, I can tell you that even 30,000 permits isn't anywhere close to enough. Our housing prices are still increasing at ~8-12% YoY (although that may slow a teeny bit by end of 2017).

We really need to be building double or triple that amount if we want to make a real impact on the supply/demand issue that's driving price sky high. Hopefully, the condo market does, in fact, light up sooner than later and that could really have a positive effect.

[EngiNerd]

I think the problem in Denver too is that we seem to be building only to the 400-700 price point. There are just only so many people in that range, even if it is the median price now. We don't seem to know how to build cheaper homes anymore.

I still don't see why they can't build lower priced homes here...it would take eliminating basements, which add at least 40-60k onto a price of a home, and going with a 1-car garage, but it could be done.

[BG918]

Originally Posted by EngiNerd

I think the problem in Denver too is that we seem to be building only to the 400-700 price point. There are just only so many people in that range, even if it is the median price now. We don't seem to know how to build cheaper homes anymore.

I still don't see why they can't build lower priced homes here...it would take eliminating basements, which add at least 40-60k onto a price of a home, and going with a 1-car garage, but it could be done.

The slot houses you see all over the NW side of Denver should be cheaper than they are since they typically don't have basements and small 2 car or one car garages, and generally lower quality finishes. But they aren't because land is expensive and developers can sell them for $500-700k. There is currently no incentive to build something that sells for less.

I do think there is a market for $300-500k condos in the 500-1000 SF range.

[TakeFive]

Originally Posted by spr8364

I am aware that there is a shortage of labor from Mexico, I have heard it is partly because they can get jobs in their home country and they don't need to come here. Because of that, immigration from Mexico has been down for years.

Yes, that has been true since 2009 when the Great Recession hit. The manufacturing mecca of Mexico is in Monterrey, a beautiful part of the country not that far from South Texas. While the "illegals" are still Hispanic they now mostly come from Central America. In Arizona they start out in one of the service industries and over time some will gravitate to construction trades. Now that Phoenix is revving up there's as much of a shortage down here as anywhere.

Originally Posted by jbssfelix

We really need to be building double or triple that amount if we want to make a real impact on the supply/demand issue that's driving price sky high.

I've always assumed that Texas is a lot like AZ in that land has been plentiful and relatively cheap. Securing water rights along Colorado's Front Range has always been a bit of a limiting factor especially now that aquifers are less of an option.

Originally Posted by EngiNerd

I think the problem in Denver too is that we seem to be building only to the 400-700 price point. There are just only so many people in that range, even if it is the median price now. We don't seem to know how to build cheaper homes anymore.

There's been a dearth of land development so there's a shortage of buildable lots. Didn't you used to live out near E-470? Until they open up the Lowry bombing range there's really not all that much land left to build in CCSD which will always be a draw.

Some of the best closer-in land available and ideal for higher density is just east of I-225 and north of Alameda. There's got to be lookers but haven't heard boo about anything. Down here there's a significant and growing Hispanic middle class and I assume with Denver's multi-generational Hispanics it's much the same?

[TakeFive]

Now Open


Image courtesy: Country Club Towers II & III

https://www.bizjournals.com/denver/n...wash-park.html

The million-square-foot development by Broe Group today begins welcoming the first of 281 tenants of the eventual 552 units.

Video Link

[jbssfelix]

Originally Posted by EngiNerd

I think the problem in Denver too is that we seem to be building only to the 400-700 price point. There are just only so many people in that range, even if it is the median price now. We don't seem to know how to build cheaper homes anymore.

I still don't see why they can't build lower priced homes here...it would take eliminating basements, which add at least 40-60k onto a price of a home, and going with a 1-car garage, but it could be done.

We don't build cheaper homes because it's very hard to get that low with the way land-costs are today. The home may only cost $75k to build, but the dirt is over $200k.

However, if we do build out the 4-700k price point to full saturation, that still helps everyone downstream. Those that move into the $400k home are likely living in a $300k house, which now opens up for someone else. Right now, because we have a supply shortage, a family with a $400k budget buys up the $300k house since they have the buying power and that's the best deal for them. If we have plenty of $400k quality homes for them, they'll leave the $300k house alone for a $300k buyer to pick up.

[Denver Dweller]

https://www.denverite.com/denver-pre...elitchs-41213/

[TakeFive]

The Birthing of a new neighborhood in Denver. Hello East Colfax.

https://www.denverite.com/denvers-fa...-avenue-41107/

The last traces of the “East Montclair” neighborhood are no more... More than just a change of websites and marketing materials for the neighborhood group, the discussion showed that a growing number of residents want to embrace the brand of East Colfax.

For Jamie Perkins, East Colfax is a powerful name because the city is finally turning its attention to the avenue. “We have been horrifically underinvested in, for decades,” she said. But there was hope in the room that that might change soon.

Interesting piece by Denverite's Andrew Kenney

[Fritzdude]

Originally Posted by TakeFive

The Birthing of a new neighborhood in Denver. Hello East Colfax.

https://www.denverite.com/denvers-fa...-avenue-41107/

Interesting piece by Denverite's Andrew Kenney

I wish the article would have stated what mile long stretch of Colfax was included. I'm guessing a mile east starting at Quebec... but not sure.

[LooksLikeForever]

Originally Posted by Fritzdude

I wish the article would have stated what mile long stretch of Colfax was included. I'm guessing a mile east starting at Quebec... but not sure.

I wondered that too and had to look it up. From the East Montclair Neighborhood Association website: "Our borders are Quebec east to Yosemite and 11th Ave north to Montview Blvd. Our neighborhood extends north to 23rd Ave between Quebec and Syracuse." - https://www.eastcolfaxneighborhood.org/

[TakeFive]

Originally Posted by Fritzdude

I wish the article would have stated what mile long stretch of Colfax was included. I'm guessing a mile east starting at Quebec... but not sure.

It would be the Last Mile. That article was actually a followup to a previous article which while meandering was "person on the street" fun.

https://www.denverite.com/east-colfa...w-brand-40763/

“Oh, shoot,” she said. “If there is a name, it’s a bad name. They don’t say anything good about this place.”

Kandyce Neal, 17, was also unsure what to call the place where she lives... “Right after Park Hill, just before Aurora,” she said. “It’s the in-between.”

Flor Mira, 16, had a more cynical name for the place. “Stapleton Ghetto,”

Andrew Kenney also had an article recently about the city buying the old PT's strip club which is in-process. Best quote came from Denver City Councilman Chris Herndon: https://www.denverite.com/city-denve...an-says-41051/

“The city is going to make it a much nicer strip club,” Herndon told the group. -- That was absolutely a joke, he confirmed later.

The city also will consider purchasing other lots along the avenue in order to assemble a larger parcel, Herndon said.