The city plans to announce a new strategy Sept. 19 to help residents challenged by high rents.
Today’s affordable housing projects in Denver don’t look like yesteryear’s brick-and-fence projects. As exemplified by new projects, like the Ash Street Apartments and the Mariposa neighborhood redevelopment, they look like, well, homes and apartments—just like anyone else’s. The city is redefining its approach to low-income housing, building income-diverse neighborhoods and integrating low-income housing with other residential offerings.
Denver’s come a long way in addressing affordable housing needs. The city recently achieved Mayor Michael Hancock’s 3X5 Affordable Housing Initiative from 2013—a plan to introduce 3,000 new units to the city within five years —a year ahead of schedule and already it’s set to add 1,100 more affordable units within the next 12 months.
“Of those 1,100 units, 838 are already under construction,” says Erik Soliván, executive director of Denver’s newly formed Office of Housing & Opportunities for People Everywhere (HOPE).
But that alone is not sufficient to address the housing crunch and the city is looking at even more options, which it will showcase in a new, five-year comprehensive housing plan that officials plan to announce on Sept. 19. The also established a $150 million affordable housing fund last year to help alleviate the issue.
The Mariposa Redevelopment, which was part of the South Lincoln Redevelopment Master Plan, is likely a blueprint for how the city will create new developments that integrate mixed income levels into a neighborhood. The 278 traditional public-housing units that formerly occupied the area accommodated 252 people before they were demolished a few years back. “We did a one-for-one replacement for the number of public housing units there prior,” explains Ismael Guerrero, executive director of the Denver Housing Authority (DHA).
Then, DHA added in more housing. “Now, of the 560 units or so total, 250 basically are public housing or subsidized.” The redevelopment now offers one- to three-bedroom apartments, townhomes and even some homes for sale in the neighborhood. Already 1,500 people are living in the same 14-acre area in units and homes that share the same amenities — whether a tenant is a senior, or making 40 percent of median area income ($34,000 for a family of four), or earning a higher income.
It’s proved popular. “All the phases that are completed are rented out. We’ve been maintaining a 97 percent to 98 percent occupancy across the board. The townhomes, which came online in June and July, have been fully occupied,” Guerrero says. “People are very excited to be in the neighborhood overall. They’re happy about the new units, they’re healthy, well-designed and any resident that wanted to return that was in the original development had an opportunity to do so.”
The units are divvied up into three three pricing tiers. For those making 40 percent of median income or less, the monthly rent tops out at $505, and the price is as low as $50 per unit for seniors on fixed incomes. For those making between 40 percent and 60 percent of median area income, rents are supplemented with tax credits and range from as low as $751 a month for a one-bedroom apartment to $1,309 for a three-bedroom apartment. For those making more than 60 percent of area median income the one-bedroom apartments are $1,340 a month and three-bedroom apartments are $1,700 a month.
“We intentionally set those rate levels to be anywhere from 10 percent to 15 percent below what somebody might play in the marketplace, Guerrero says. That’s to help encourage those making more to live in the neighborhood.
The role of private developers
The Ash Street Apartments are another example of an income-restricted development in the city. Those living in the building can’t make more than 60 percent of median area income. But rather than being led by the DHA, the $24.9 million project was developed by Koelbel and Co. The project brought together a number of financing partners including the Denver Office of Economic Development (OED), Colorado Housing and Finance Authority (CHFA) and the Colorado Division of Housing.
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Ash Street Apartments, developed by Koelbel, make it possible for residents with varied incomes to live in a growing neighborhood.
“Ash Street was a great project, but more focused on how to expand an apartment in that section of the neighborhood than driving the revitalization of the surrounding neighborhood,” as Mariposa did, says Soliván. “Both leveraged significant dollars. Mariposa was a bigger project and had additional leverage. As you think about it, both are good strategies for expanding affordability throughout our communities in Denver.”
Indeed, the Mariposa project, which cost $197 million, didn’t just include residential units. “Mariposa was really about revitalization of a neighborhood including creating small business opportunities and employment opportunities for residents. it really created an avenue for not just expanding housing. But also looking at job creation,” Soliván says.
That’s one of the reasons it’s being looked at as a model for new affordable housing projects, such as the Sun Valley redevelopment. “The upcoming Sun Valley redevelopment is also an anchor project in its approach to mixed-income revitalization. A lot of the 1,100 units that are in the pipeline will reflect the continuing investment in mixing incomes as well as expanding senior housing and permanent supportive housing for those experiencing homelessness and those with high medical needs,” Soliván says.
The problem remains
Still, the number of those who need affordable housing in Denver is high. Guerrero puts the number of affordable housing units in Denver at somewhere between 26,000 to 30,000. “I’ve heard that there may be as many as 80,000 households that may be rent-burdened or cost-burdened. They’re paying a substantial amount of their income for housing costs which leaves them very little discretionary dollars for other needs. That makes them more vulnerable to rent increases,” he says. “Those are huge numbers and we need to focus on adding and preserving more affordable units as quickly as we can.”
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Mariposa welcomes tenants at all income levels. Photo by Ben Eyster.
That’s why the city also is taking other approaches, like the rent buy-down pilot program, which builds on existing HUD Section 8 options for low-income families that allow them to live in private-sector housing. Soliván explains that the program takes the growing vacancy of apartments that start at around $1,500 a month and uses funds to help bring the rental price down to what someone making 40 percent to 80 percent of area median income could afford. With 400 such units vacant in Denver Soliván says it represents about 8 percent of the luxury units in the city.
“Other cities like Chicago and New York have tested projects like this,” according to Soliván. “But no one has done it in partnership with our home association, our downtown partners and other associations and employers. That is truly a point of innovation. The city said we all own this responsibility to expand housing options for our key workforces, our teachers, our nurses in this ever growing, prosperous city. So let’s figure out a way we can all connect to expand our affordable housing options.”
As the city prepares to introduce its five-year housing plan, Soliván said it will look to even more ways to increase affordable housing options. Options he cites could include creating land trusts, land banking, land acquisition and integrating housing with Medicaid and Medicare services. “We’re looking at better strategies and not just sheer production but options like our rent buy down program where we can have multiple tools in our toolbox to address housing needs.”