I’m a Denverite, a developer of housing and a member of the Denver’s Community Planning and Development Department’s Expanding Housing Affordability initiative. I see it as my obligation to positively influence how growth alters our city and impacts everyone already living here, regardless of income level.
I understand that for many people in Denver and in other growing cities, new development may not be seen in a positive light. Developers are often seen as “gentrifiers,” potentially displacing existing residents and local businesses and altering the character of a neighborhood. We are seen as catalysts for rent growth without a corresponding impact on job or wage growth.
I recognize the reality behind these perceptions and acknowledge the role that real estate development can play in the negative externalities felt by many existing residents, housing affordability chief among them.
Often the frustration people feel toward developers is informed by only a partial understanding of the dynamics at play.
Most of the housing of any kind that exists in Denver and other American cities has been built by those seeking profit. But our aim is not to make money by destroying neighborhoods. Our aim, and the fundamental dynamic of real estate development, is to provide a return on capital by using it to build housing that meets demand where it already exists.
The Community Planning and Development Department recently assembled a wide variety of stakeholders to listen, learn and offer opinions about the regulatory changes coming to Denver on housing affordability. The department is making a terrific effort to bring about real change in the city’s approach to affordability.
Doing this while balancing the interests of varying and often conflicting stakeholders is not easy. I have attended many public meetings and information sessions, and the public’s demand for housing affordability solutions and the department’s commitment to meet that demand have been very clear.
According to the Expanding Housing Affordability initiative, the three development policy tools available to meet these demands are: a) Linkage Fee — a per square-foot fee; b) Incentives — tools to encourage onsite affordability; c) Inclusionary — a mandatory amount of affordable housing or alternative additional fee.
In my professional role but also in my equally important role as a resident of this city, I support the Community Planning and Development Department’s efforts to use these tools to increase the amount of housing available to low- and moderate-income individuals and families. They have been used widely, with mixed success, in many cities around the country, and the Community Planning and Development Department has run a careful and precise process to learn to take many of these approaches from other cities into consideration.
In my opinion, the creation of new housing of all rent levels will continue to meet the increasing demand effectively and efficiently in Denver if the policy changes are:
- Implemented slowly. Allow time for projects that are already underway to adapt and adjust to lower rents and higher fees (particularly given the dramatic impact the pandemic has had on commercial real estate);
- Written predictably. Focus on easy-to-follow and interpret guidelines that do not change and do not create confusion among developers and city staff members who need to implement them;
- Made achievable. Require affordability levels and fee amounts that are feasible and market-driven;
- Contemplated with density. Integrate an approach that will encourage – not discourage – high-density housing production in the right places and will preserve the density incentives that already exist around the city; and
- Protect ground-floor, neighborhood-serving retail. Retail has suffered tremendously throughout the pandemic and should be encouraged and supported by not applying new and burdensome fees to new retail spaces.
With these parameters in mind, and with the full knowledge of the dynamics of how housing actually gets built, I understand and support the policy changes the Community Planning and Development Department will attempt to implement in the coming months as a means of addressing the shortage of affordable housing. Denver is a large and continually expanding city that needs a holistic and sustainable policy plan for addressing cost of living challenges.
Fighting against progressive affordable housing policy on its merits in a time of considerable public outcry about the affordability crisis would be a mistake. Rather than spending our time and energy debating policies used in dozens of American cities, many of us from the Denver development community have worked with the Community Planning and Development Department to make sure our voices are heard on the details of that policy change:
How much? How soon? How do we ensure that high-density development and the creation of housing of all types can continue so that we can meet the demands of an ever-growing city? What incentives could be useful for development to lessen the immediate impact to investor returns?
Likewise, those on the opposite side of the housing policy debate, — concerned citizens and affordable housing advocates who fear cities will become places where only the wealthy can afford to live — should approach this issue armed with the knowledge of the dynamics of development and with realistic goals to preserve or create attainable housing for all Denverites.
Kirsty Greer, of Denver, is senior vice president of Multifamily and Urban Mixed-Use Development at real estate investment company McWhinney. She is a member of the Denver Park Trust Board.
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