With both Colorado and Denver’s unemployment rate at 2.9 percent (as of February), the state’s economic growth is strong, especially compared to the national unemployment rate of 4.7 percent. While this statistic is worth celebrating,the state’s housing market tells a slightly different story.
According to the Denver Office of Economic Development, half of Denver’s renters pay more than 30 percent of their income for housing; nearly a quarter of those households pay more than 50 percent for housing. The high living costs can make it difficult for these households to save or invest in the future, potentially affecting the long-term economic vitality of the city. Denver Housing Authority has reported that the city needs about 21,000 more affordable units in order to meet demand – significantly more than are in the pipeline.
Once regarded as something that only affected the very poorest residents, affordable housing is affecting people with full-time jobs that would traditionally allow them to live comfortably – if not lavishly.
Take teachers, for example. A report from Trulia recently ranked Denver as the seventh-least affordable metro area in the U.S. for people trying to buy a home on a teacher’s salary (a median of $53,400 a year). Less than 13 percent of homes on the market in late 2016 were affordable to someone earning that wage.
Recognizing the need to address affordability from all angles, the public and the private sectors are committed to finding solutions. As architecture and design professionals, we approached our recent affordable housing projects – The Ashley at Union Station, Tapiz at Mariposa and Acoma Lofts – with an eye toward creating quality designs that promote equity, mobility and deep community connections. We also are watching closely how the city, nonprofits and developers are responding to this issue to partner where we can.
• Public support. Last year, the Denver City Council approved an affordable housing proposal aimed at raising more than $150 million over the next 10 years from property taxes and new development impact fees.
The plan has the potential to preserve and/or create about 6,000 affordable housing units – far short of the 21,000 we need, but still a step in the right direction.
This came after Denver Mayor Michael Hancock announced the creation of a $10 million Revolving Affordable Housing Loan Fund. This financing tool is designed to support the development of multifamily rental units serving individuals and families earning up to 60 percent of the area median income, or $46,020 for a family of four.
According to the Denver Office of Economic Development, the fund will target housing projects that receive 4 percent Low-Income Housing Tax Credits through the Colorado Housing and Finance Authority. This fund will help bridge the gap because many affordable developments were unable to use the 4 percent credits because of a lack of soft funds and gap financing.
• Private investment. On the development side, there are a number of recently completed projects and several projects in the works, which aim to put a dent in the affordable housing issue.
Last October, Welton Park affordable housing apartments started moving tenants into 223 units that are all income-restricted to people making 60 percent of the area median income. Likewise, Habitat for Humanity of Metro Denver recently completed a 51-unit, for-sale townhome development called Sable Ridge in Montbello.
In the red-hot River North area, Denver-based developer Zeppelin is building Redacted on the Taxi campus, a multifamily building with 314 apartments for renters who earn less than 60 percent of area median income. According to Zeppelin, adding affordable units to Taxi was appealing to many of the 150 businesses located there, and businesses wanted to align with them because of it.
In the heart of the Union Station neighborhood, we recently completed work on The Ashley, a 107-unit, mixed-income apartment complex. A truly mixed-income property, the property not only reserves 34 units for residents earning 60 percent of area median household income, but also it reserves another 34 units at 50 percent of area median household income and seven more for residents earning just 30 percent of area median income – a rarity, especially for a highly desirable area such as Union Station. Its proximity to the region’s public transit hub further aids in the crucial area of mobility for residents.
For this project, our architecture,interior design, lighting and landscape design teams worked together to deliver a design that met the strict budget requirements typical of affordable housing projects, while also providing amenities residents would find in a higher-end complex – a rooftop deck, beautiful light-filled common areas and exterior architecture fitting of the area. The goal for the design was to create a space any resident would be proud to live in, regardless of income.
As Denver continues to grow, affordable housing will become more of an imperative. Between the public and private sectors as well as changing cultural attitudes, there is much we can do to address the problem and create a city that is livable for everyone.