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— Multifamily Properties Quarterly — May 2016
CONTENTS
Letter from the Editor
I
t is impossible to discuss today’s
multifamily market without
acknowledging the affordability
crunch.With the average rent
for a one-bedroom standing at
$1,250, many renters are finding them-
selves stretched to pay a disproportion-
al amount of their wages to housing.
According to the Denver Mayor’s
Office, someone is
cost burdened if
he pays more than
30 percent of his
income on housing.
And by the office’s
calculations, there
are 87,000 house-
holds in the city
that fall within this
cost-burdened cat-
egory, said Evan Dryer, chief of staff
for Denver Mayor Michael Hancock.
Affordable-housing options are paid
for primarily with federal funding.
But over the past three years, the city
raised funds to support the building
of affordable housing. However, these
funding sources are temporary and
are not enough to meet demand, said
Dryer.
The mayor’s office is looking to
change this with the creation of the
first permanent affordable hous-
ing fund, explained Dryer and Laura
Brudzynski, with the Denver Office of
Economic Development, at a Down-
town Denver Partnership lunch in
April.
The program is proposing two
dedicated funding sources that would
combine to generate $15 million a
year, which would allow the office to
create and preserve 6,000 additional
affordable units over 10 years. The
first source would come from restora-
tion of up to one mill of property tax.
In 2012, Denver voters approved that
the city could keep additional tax
revenue (deBruced), so this would just
need the City Council’s approval. The
program does not anticipate request-
ing an entire mill.
The second source would be the
creation of a linkage impact fee,
which would be a fee on new devel-
opment on a square-footage basis.
It would be a one-time fee for all
projects, residential and commercial.
A Nexus Study is underway to deter-
mine the maximum legally justified
fee, and then a feasibility study will
be conducted to determine an appro-
priate fee range. This type of fee is a
best practice in a lot of Denver’s peer
cities, Brudzynski said.
The goal of establishing something
permanent to address the affordabil-
ity problem seems even more critical
as this week we watched construc-
tion defect reform legislation talks
collapse again, for the fourth year in
a row.
The studies for this program are
anticipated to wrap up in the next
two months and a “robust public
discussion” will follow.Watch for
updates in the next issue of Multi-
family Properties Quarterly.
303-623-1148, Ext. 104
