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Page 36 — Multifamily Properties Quarterly — August 2017
able housing further inaccessible to
low- and moderate-income renters.The
Denver Housing Authority is estimated
to receive an annual budget of $60,000
for subsidized affordable housing
vouchers, which will buy approximately
300 vouchers, according to the Colorado
Independent.
The Denver Housing Authority opened
its lottery for 2017 vouchers on Sept. 22,
2016, and by its close the following day,
21,500 applications had been submit-
ted.What’s worse, of the 300 vouchers
awarded last year, only about half were
used because many recipients were not
able to find a landlord willing to accept
their voucher or the rent landlords were
charging was still too high.
• Recognizing the affordable housing
crisis. To recap the situation in Denver,
which parallels that of many other
growing U.S. cities, greater competi-
tion in the housing market is leading to
higher rent and an increased demand
for affordable housing. Meanwhile
there is not enough affordable housing
under development to meet that ris-
ing demand, and what already exists
is becoming less available as vouchers
become a rarity. All of this points to a
stark shortage in affordable housing and
growing concerns over the associated
risks to community vitality.
There are policies taking shape in the
Colorado Legislature that aim to address
this housing shortage.The most promi-
nent bill recently attempting to incen-
tivize affordable housing in Colorado is
House Bill 17-1309, which would double
an existing filing fee on real estate
transactions.While this bill is some-
what controversial in that it imposes a
fee on real estate agents and it expands
the pool of renters qualifying for assis-
tance to those earning up to 80 percent
of the area median income, which some
believe to be too high of a threshold, it
has the potential to become a crucial
asset to the preservation of affordable
housing in Denver.
Regardless of how the current legisla-
tion fares, plans that emphasize pres-
ervation rather than new construction
offer the most cost-effective solutions
to housing shortages. Because retrofit-
ting housing is much cheaper per unit,
protects previous public investment and
maintains historic communities, urban
housing policies should be designed to
encourage an emphasis on preserva-
tion. If affordable housing preservation
efforts are successfully implemented,
Denver will make significant strides
toward providing safer, healthier and
more equitable housing for citizens who
need it most.V
provided by Axiometrics, we com-
pared the percentage of income
spent on rent across several major
markets. (Note that Axiometrics’
Denver metropolitan statistical area
rents were $1,442 per month. This
value is slightly higher than Apart-
ment Insights reports, but in the fol-
lowing national analysis Axiometrics
data was used to maintain consis-
tency from city to city.)
The chart speaks for itself. Denver
is a much more affordable market
than many of the other major mar-
kets across the country.
• Affordable demand and solu-
tions. The chart averages only take
into account apartment rents and belie
the growing demand for affordability
in some areas. Single-family housing
prices have skyrocketed and the path
to homeownership is difficult, espe-
cially for low-wage earners. Acres of
trailer home communities have been
bulldozed to make way for new devel-
opment. Older, less expensive houses
have been torn down to make way for
high-density, more expensive urban
development.There is a growing need
to address entry-level housing, and
many developers are working to tackle
the problem.
There are new high-quality, low-
income housing tax credit projects
breaking ground in many communi-
ties around the Denver metro. Creative
solutions are making headway, such
as the redevelopment of an old hotel
and ground-up development of more
affordable micro units.The reform of
construction defect litigation laws is
helping pave the way for condo and
townhome development, often the first
stop for entry-level housing. Hopefully,
these solutions can keep pace with the
demand.
Overall, these statistics point to a
healthy apartment market in terms of
rent in relation to incomes. On aver-
age, metro Denver renters based on
the household incomes are paying 24
percent of their income on rent, far less
than the maximum qualifying rent and
less than the national average. Given
the steady influx of residents and the
number of millennials still living at
home with their parents, there is pent-
up demand for apartments.V
MULTI-FAMILY TOD SITE FOR SALE AT DAYTON LIGHT RAIL STATION
Adjacent to Denver Tech Center and within Cherry Creek Schools
Representative:
Ryan Schaefer and Jake Hallauer
970-663-3150
Representative:
David Chaknova
303-440-6047
DAYTON STATION MULTIFAMILY SITE
• At the RTD’s R-Line & H-Line at Dayton Station
• 1 Mile to the Denver Tech Center
• Top school district in the state - Cherry Creek Schools
• Adjacent to Cherry Creek Reservoir & Cherry Creek State Park
• Close proximity to shopping and dining
E HAMPDEN AVE
S YOSEMITE ST
N
Pedestrian
Bridge
R
Line
H
Line
DAYTON
STATION
DENVER TECH
CENTER
CHERRY CREEK
HIGH SCHOOL
KENNEDY GOLF
COURSE
CHERRY CREEK
RESERVOIR
SOUTHMOOR
STATION
BELLEVIEW
STATION
R
Line
R
Line H
Line
3.078±
ACRES
CHERRY CREEK
STATE PARK
& TRAIL SYSTEM
Stack
fees, and any developer/declarant
control or financial interest in the
HOA. Developers should refrain from
describing amenities that are not
assured of being constructed and
should ensure that the association
budget is accurate and realistic.
• Other timing and legal consider-
ations. A conversion also must com-
ply with the remaining provisions
of Colorado’s Condominium Owner-
ship Act, requiring that tenants be
notified in writing of the conversion
after recording the condominium
declaration. The notice acts as a
90-day notice to terminate but,
unless otherwise agreed, the tenan-
cy may not be terminated before the
expiration of any existing lease, and
those tenants with a shorter remain-
ing lease term may hold over for the
remainder of the 90-day period. As
such, developers should consider,
well in advance of a conversion, the
timing of the conversion and desired
sale of the condominium units, and
adjust their leasing practices accord-
ingly.
Condominium conversions also
may trigger local jurisdictional
requirements related to affordable
housing or, less commonly, right
of first refusal/purchase-option
requirements. In addition, local
subdivision requirements related to
creation of condominiums must be
considered, in terms of approval and
timing.
Overall, while condominium conver-
sions may now be an attractive propo-
sition for developers, the process and
documentation involved can be exten-
sive. As such, developers should hire
experienced counsel in condominium
conversions – especially if the resulting
condominiumwill have mixed uses.V
Beecher
Malhotra