Denver Releases Controversial Housing Proposal to Combat a Growing Affordability Crisis
In a race to add more affordable housing to a heated Denver market, city housing and community development officials recently unveiled a proposed mandate requiring developers to set aside between 8% and 15% of newly-constructed condos or apartments as income-restricted housing for the next 99 years. The ambitious policy includes incentives like cheaper permits for building affordable units, but builders worry that the move could actually deepen the regional housing crisis and exacerbate price gains for prospective renters and buyers, according to The Denver Post.
As builders struggle with a labor shortage and costly materials, affordable housing additions won’t generate the necessary profits to balance construction costs, so a growing number of developers may decide to build elsewhere. As a result, the Denver metro will see limited development followed by more price gains as demand skyrockets across the city.
Developer interest has never been higher. There are roughly 38,000 apartments under construction now in metro Denver and another 57,000 in the planning stages, [Cary] Bruteig said. In Denver, those numbers are 17,000 and 28,000, respectively. That’s a record high
Last year saw a huge surge in new apartment starts, Bruteig said. That pushed what he calls “developer success rate” (the percentage of units in planning that actually moved into the construction phase) to 46% up from 28% in 2021. In 2011, that success rate was over 80%, he said. But he worries that could quickly be undone in Denver under the city’s proposal.