By Margaret Jackson / NewsBreak Denver
(Denver, Colo.) It’s no secret that finding an affordable place to live in Denver is challenging, but a proposal considered by City Council could ensure that when building new homes,, more affordable housing is constructed along with them.
While it sounds like a good idea, not everyone agrees the proposed regulations will do much to help — and may even hurt the city’s efforts to slow skyrocketing prices.
The proposal requires new residential developments of 10 or more units to designate between 8% and 12% of them as affordable for 99 years, regardless of whether the home is for rent or for sale. In the city’s higher-cost areas such as downtown, developers would need to provide 2% to 3% more affordable units.
“One in three households in Denver struggles with housing costs, and 46,000 are paying more than half their incomes toward housing,” said Britta Fisher, executive director of the Department of Housing Stability. “These are our restaurant workers, childcare providers and social workers — the people who make our city run. This proposal helps ensure they can not only work here but can afford to live here, too.”
But some worry that the proposal will further curtail housing development. Some developers don’t have the expertise to navigate the complicated financial waters that make it possible to develop affordable housing.
“The concern with this new proposal is that we already have a housing crisis in Colorado, and increasing the cost to build is going to have unintended consequences,” Apartment Appraisers & Consultants President Scott Rathbun said during a panel discussion at the Urban Land Institute (ULI) Colorado Emerging Trends conference this week.
Denver already has developers accustomed to solving the tax credit puzzle that makes affordable housing possible, and many property management companies know how to navigate compliance with affordable housing rules, Rathbun said.
But the city’s proposal puts Denver in a position of needing more of those developers and management firms that it simply doesn’t have, he said.
“The only way to make it pencil is to increase your market-rate rents, and overcharge people in the building,” he said. “At the end of the day, we’re going to push up the cost of housing.”
Last year, the Colorado legislature passed House Bill 1117, allowing local governments to promote the development of new affordable housing units within their boundaries.
“We haven’t had this in our toolbox since the state Supreme Court ruled it was a form of rent control,” Housing Colorado Executive Director Brian Rossbert said at the ULI conference.
In 2000, the Colorado Supreme Court ruled that cities can’t force developers to include lower-cost housing units in new developments, saying that the policy, known as “inclusionary housing,” is a form of rent control.
The city invites public comment on the draft proposal through March 14. The Denver Planning Board and Denver City Council will consider adopting the final proposal in late spring.