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Page 4 — Multifamily Properties Quarterly — April 2015
A quick scan of the Denver
skyline confirms what we
all know: The Denver apart-
ment market is booming.
Demographic changes, the
growing millennial population and
a general rediscov-
ery of urban cores
are driving historic
demand for apart-
ments. And devel-
opers are respond-
ing.
Multifamily
construction is at
historic highs in
Denver and across
the country. Of the
15,837 residential
construction per-
mits issued last
year in the metro
area, more than
7,400 were mul-
tifamily. In 2013, there were 8,188
multifamily permits.
All of that construction means a
lot of jobs, and not just from con-
struction, but also from the leas-
ing and operations side. Research
commissioned by the National
Multifamily Housing Council and
the National Apartment Association
found that in the Denver metro area
– in 2013, which is the latest data
available – apartment construction,
operations and resident spend-
ing contributed $10.4 billion to the
economy and supported more than
97,400 jobs.
What comprises that $10.4 billion?
Local apartment construction con-
tributed $1.6 billion and helped sup-
port 12,890 jobs. Operations added
another $1.6 billion and provided
support for 11,631 jobs. And finally,
there is the often-overlooked com-
ponent of economic contribution
– the spending power of the apart-
ment residents themselves. After
all, without these apartments, resi-
dents might be living somewhere
else and spending money in a dif-
ferent community. Denver’s 439,900
renters contributed $7.1 billion to
the local economy and helped sup-
port nearly 73,000 jobs.
On a statewide level, apartments
and Colorado’s apartment renters
contributed $15.6 billion to the state
economy and supported 154,000
jobs in 2013. Nationally, apartment
homes and their 36 million resi-
dents contributed $1.3 trillion to
the economy and supported 12.3
million jobs in construction, opera-
tions, leasing, management and
skilled trades.
Economist Stephen S. Fuller, Ph.D.,
George Mason University Center
for Regional Analysis, conducted
research that was published by
NMHC and NAA as part of the big-
gest public relations campaign
in the history of the multifamily
industry. The award-winning “Apart-
ments. We Live Here.” campaign
tells the story of how apartments
help people live in a home that is
right for them, while making com-
munities stronger and creating mil-
lions of jobs.
The campaign site, www.
weareapartments.org, features an
interactive map that showcases the
footprint of the apartment indus-
try in all 50 states and 40 metro
areas, including Denver. The site
also includes tools that real estate
practitioners can use with planning
boards, citizen groups, investors or
anyone else who wants to know
about the economic impact apart-
ments bring to communities in Col-
orado. In my opinion, the most use-
ful tool is NMHC/NAA’s Apartment
Community Estimator, or ACE.
ACE calculates the economic
contribution of a given number of
apartment units to Denver or any
city and state. By entering how
many apartments are in a com-
munity, indicating whether it is an
existing property or new construc-
tion and choosing a city or state,
the tool will calculate the total
economic impact and number of
jobs supported. For example, a new
project in Denver consisting of 165
apartment homes would support
322 local jobs annually and gener-
ate a $38 million economic impact
to the state when the spending of
its residents is included. Those are
strong numbers by any measure.
As construction cranes become
the norm in Denver, the question
of how and where Denver should
develop is a hot, and often heated,
topic, at least in my neighborhood
of West Highlands. These tools are
designed to help address those “not
in my back yard” battles.
Following are arguments to be
made for the continued construc-
tion of apartments in Denver and
Colorado:
Managing budgets. Apartments
help manage city and state bud-
gets by concentrating water, sewer,
electrical, highway, police and fire
protection. According to the U.S.
Department of Housing and Urban
Development, the total cost for a
jurisdiction to support a large-lot
detached house (including libraries,
parks, fire, police, schools, roads,
drainage, water and wastewater) is
$13,470. The cost drops to $8,640 for
a more compact detached house,
and for an apartment or condo-
minium, the cost drops further to
$6,405.
Fueling the local economy. Appeal-
ing multifamily housing attracts the
“best of the best” to a city or state.
Colorado’s lifestyle made the state
and Denver a premier destination
for the workers firms want. In fact,
some firms have relocated their
headquarters to Denver in recent
years. All of that economic develop-
ment is fueling the tax base, sup-
porting the economy and helping
support state-of-the-art transporta-
tion and other infrastructure chang-
es city leaders are undertaking to
make Denver a world-class city. We
can’t have all that without creating
housing for these new residents.
Boosting prosperity. Harvard pro-
fessor Ed Glaeser has an extensive
body of work documenting the ben-
efits of density, including the fact
that wages and productivity rise
with density.
Reducing traffic. Creating walk-
able neighborhoods and providing
the critical mass needed for public
transportation lessen traffic. Dense
neighborhoods help reduce vehicle
miles traveled (which reduces traf-
fic), because most car trips aren’t
just commutes to work. Trips also
include traveling to buy groceries,
going out to eat and picking up chil-
dren from school, which adds up to
millions of miles. When we create
dense live-work-play neighbor-
hoods, we reduce traffic.
Preserving park space. Having
parks and outdoor recreation areas
is essential in dense and urban
areas. When buildings are built up
instead of out it allows space for
parks and outdoor areas to be pos-
sible.
I believe leaders and policymak-
ers in Denver and Washington, D.C.,
need to understand the importance
of the multifamily industry to Colo-
rado and the country.s
Economic Impact
Kim Duty
Senior vice
president, public
affairs, National
Multifamily
Housing Council,
Denver
The impact of apartments on the Denver metro economy
The economic impact a 165-unit project would have on the Denver metro area