Housing and Affordability

Real plans for a vibrant, affordable, safe Denver: Affordable Housing

More than 50% of Denver voters can’t afford to live in Denver today. Families who have been here for generations are being pushed out, as well as the teachers, nurses, and first responders who serve our city. Over the last decade, the cost of housing has exploded for both renters and buyers: the average cost of a home is nearly a million dollars,¹ and the average rent for a two-bedroom apartment is $2,250.² Nearly 50,000 households pay over half their incometo rent._³ We need sweeping, ambitious change to put Denver back on track.

As the lead author of Proposition 123, I led a coalition of 260 organizations to pass Colorado’s first ever statewide ballot measure to successfully take on affordable housing and homelessness. Our bipartisan coalition delivered $300 million dollars a year in permanent stable funding, as well as key regulatory changes, to create a solution that is already being recognized as a national model for affordable housing.⁴ Proposition 123 provides nearly a fivefold increase in the state’s permanent housing allocation, and will bring in approximately $50 million dollars a year of new funding to help Denver tackle this critical issue. Now that we have the resources we need to make Denver affordable, we need a mayor with the vision and tenacity to get it done.

Here is my plan. As with every part of my policy platform, we know it works and we know how to pay for it.

The Plan

1. Create over 25,000 permanently affordable units within 8 years so that teachers, nurses, firefighters, and police officers can afford to live in the neighborhoods they serve. Because Denver currently has approximately 25,000 income-restricted units,⁵ this will double the City’s stock of affordable housing.

• This effort will include both new construction and the conversion of existing market-rate units to permanently affordable housing. New affordable housing units will be integrated into housing developments with market-rate units, ensuring mixed-income socio-economic integration that benefits all Denver residents.
• Permanent affordability. Affordable housing projects frequently require units to remain affordable for only 15 years. In contrast, we will build units with deed restrictions that require them to remain permanently affordable, which will avoid the future loss of affordable housing units. This means the rent doesn’t go up unless your income does: an income-eligible renter will never pay more than 30% of their income to rent.
• Remove the red tape. Denver needs more affordable housing—and we don’t have time to waste. My administration will add staff and urgency to our permitting process to ensure that housing permits are approved within 90 days, not 2 years.⁶
• We know how to pay for it. Based on the current, per-unit rate of funding for affordable housing, we estimate that it will cost $72 million per year to construct 25,000 homes.⁷ The success of Proposition 123 will nearly double Denver’s annual funding for affordable housing, from $45 million to $72 million.⁸ When combined with state and federal low-income housing tax credits⁹ and ongoing city initiatives,¹⁰ these funds will enable us to fund this ambitious program.

2. Helping renters become homeowners by making Denver the first city in the country to establish a city-wide renter wealth-building program. This will put money back in the pockets of Denverites, not out-of-town investors.

• Investors drive up costs and take huge profits—frequently at the expense of tenants. That is why we helped create a new financing tool in Proposition 123 that gives renters a portion of thereturns on the property’s investment. A teacher who makes $60,000 a year, for instance, would have roughly $100 of their rent payment set aside and placed into a savings account that grows over time. After 5-10 years, that teacher can save $10,000-$15,000 to help make a down payment on a home, or to help put a child through college.

3. Provide down payment assistance to help working families buy homes in Denver. Every family’s dream is to become a homeowner. Thus, while we need to take aggressive steps to make renting more affordable, we also need to make sure every Denver resident can find a path to homeownership.

• At Gary Community Ventures, we took a crucial step towards this goal by creating the Dearfield Fund for Black Wealth to provide

down-payment assistance to first-time Black homebuyers in Denver.¹¹ The City recently followed our lead, allocating $20 million in the latest Denver Budget for down-payment assistance.

• As Mayor, I will continue to support first-time and first-generation home buyers by expanding the reach of Denver’s new down-payment assistance program. This will ensure all residents can put down roots in our community.¹²
• We know it works. A lack of wealth is one of the mostimportant factors limiting households from becoming homeowners. The research shows that down-payment assistance can help bridge that gap¹³—and that recipients are no more likely to default than other homebuyers.¹⁴
• We know how to pay for it. Approximately $9 million of the funds Denver is projected to receive because of Proposition 123 are earmarked for down-payment assistance.¹⁵

4. Invest in innovative approaches to lower the cost of construction to help reduce the cost of homes for Denver residents.

• Local entrepreneurs have created innovative processes that enable housing units to be built in a cost- and time-effective manner.¹⁶ My administration will use those methods and others to construct affordable housing at scale, avoiding high construction costs and preventing lengthy delays.¹⁷

5. Lower the cost of market-rate housing. Denver needs more affordable housing. But it also needs more market-rate housing to help bring down skyrocketing home prices and rents. Sensible changes to the zoning code and parking-driven solutions can accomplish this goal—not to mention create a greener, more transit-friendly Denver.

• Reduce parking mandates near mass transit. The City makes it harder to build housing by requiring developers to provide parking for each new unit of housing—even along major transit corridors, where vehicle use is much lower. I will work to eliminate those outdated requirements, which will have the added benefit of creating a greener city.
• A sensible approach to zoning. To meaningfully achieve housing abundance in Denver, we must add density in select areas of the city, which is prohibited in many areas by our zoning code. As Mayor, I will explore sensible changes to zoning to help increase density in neighborhoods where it makes sense.
• We know it works. The research shows that increases in density—even small ones—lead to lower rental costs.¹⁸ And eliminating parking mandates has been shown to increase the supply of housing,¹⁹ a chief reason why cities across the country have reformed their parking mandates in recent years.²⁰

Sources

¹ See https://denverite.com/2022/04/13/denvers-average-house-price-may-hit-1-million-by-memorial-day-says-a-colorado-realtors-group/
² See https://www.zumper.com/blog/rental-price-data/
³ See https://denverite.com/2022/02/10/what-does-ami-mean-and-whats-considered-affordable-in-denver/. In fact, the average Denverite would need an income of over $85,000—more than the City’s median household income—to afford a standard 1 bedroom apartment. That same individual would need an income over $180,000 to afford a standard single-family home, substantially more than double the median Denver household income.
⁴ Seehttps://apnews.com/article/colorado-denver-aurora-5cb23d0f999df0d6edd9f99a8fd28f86
⁵ Number is taken from Denver’s Affordable Housing Dashboard, located here.
⁶ Specifically, we will hire 10 additional positions in the City’s Community Planning and Development department, at a cost of approximately $1 million per year.
⁷ According to the Department of Housing Stability’s currentterm sheets, the cap on per-unit funding is between $10,000 and $35,000—depending on other tax credits received by the project. This estimate uses a per-unit average cost of approximately $25,000.
⁸ Estimate combines Denver’s 2023 budget for affordable housing ($46 million) and funding Denver projects to receive for affordable housing because of Proposition 123 ($21–$27 million).
⁹ See https://www.chfainfo.com/getattachment/e4989b7a-afc2-4cf3-bd35-25296291dbb5/2021HousingCreditScorecard.pdf.
¹⁰ See https://denverite.com/2022/06/07/city-council-mandates-developers-help-solve-denvers-housing-crisis-even-if-some-dont-want-to/.
¹¹ See https://garycommunity.org/content-category/press-releases-and-announcements/dearfield-fund-launches/.
¹² See https://ballotpedia.org/Colorado_Proposition_123,_Dedicate_State_Income_Tax_Revenue_to_Fund_Housing_Projects_Initiative_(2022)
¹³ See https://www.huduser.gov/publications/pdf/potentialdownpaymentassistance.pdf.
¹⁴ See https://www.jchs.harvard.edu/blog/how-the-presence-and-type-of-down-payment-assistance-affects-the-performance-of-affordable-mortgage-loans.
¹⁵ Based on its share of the Colorado population, Denveris projected to receive $36-$45 million annually because of Proposition 123. Of the 40% administered by the Division of Housing through the Affordable Housing Support Fund, half is dedicated to an Affordable Home Ownership Program – approximately $7-$9 million. Our down payment assistance plan will be the primary goal of this program.
¹⁶ Oakwood Homes’ On2 initiative uses precise planning and measuring of home materials in a way that has made the building process significantly more streamlined, efficient, and cost-effective. https://on2homes.com/our-process/. Similarly, Vederra Building Systems integrates off-site fabrication and assembly to provide efficient, cost-effective modular homes. https://www.vederra.com/.
¹⁷ The planning and measurement processes noted in the above footnote allow On2 homes to be built “75% faster than other production built homes.” https://on2homes.com/our-process/
¹⁸ See https://www.bostonfed.org/publications/research-department-working-paper/2022/how-to-increase-housing-affordability-understanding-local-deterrents-to-building-multifamily-housing.aspx.
¹⁹ See https://cal.streetsblog.org/2021/05/19/parking-requirements-are-not-a-useful-bargaining-chip-for-increasing-affordable-housing/.
²⁰ See https://usa.streetsblog.org/2022/01/31/analysis-the-decline-and-fall-of-mandatory-parking-minimums/.