At last, Denver can require affordable housing in new development

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For years, you wrote, called and pulled me aside to ask: “Why aren’t we requiring affordability in new development?” The answer until now was: “It is illegal under state law.” At least it was for rental housing, the most common development in Denver and the housing needed by residents struggling the most to stay in our city.

In 2021, State Reps Susan Lontine, D-Denver, Serena Gonzales-Gutierrez, D-Denver and senators Julie Gonzales, D-Denver and Robert Rodriguez, D-Denver, sponsored a bill to give cities like Denver the power to regulate affordable housing in new rental development — a policy commonly known as inclusionary housing.

Denver and I worked closely with the legislators, and we were ready with a stakeholder process known as Expanding Housing Affordability to take advantage of the opportunity to get more affordable housing from the market rate growth Denver continues to see.

I couldn’t be prouder that the people of Denver have invested heavily in affordable housing through the Affordable Housing Fund, approximately $30 million per year, and the Homelessness Resolution Fund, more than $40 million per year.

This has a significant focus on housing those experiencing homelessness, plus a one-time bond investment for housing and shelter construction totaling $38.6 million. These investments are housing thousands of households a year and sheltering or serving thousands more, but we know the need is even greater.

Denver residents overwhelmingly supported an affordable housing contribution from market rate development to complement their investments.

The proposals that were developed through Expanding Housing Affordability will likely be law by the time you read this article, with a vote scheduled on June 6. The policies will:

Provide affordability in more projects: Every residential development larger than 10 units must build affordable homes or satisfy alternatives:

Rentals: 8 or 10% of units built below 60% of Area Median Income. For a family of two, 60% of AMI is below $56,280; 70% of AMI is below $65,660; 80% of AMI is below $71,550; 100% of AMI is below $93,800. Rental voucher holders may earn incomes from $0 to approximately $28,150 for a family of two, depending on the type.

Or, 12 or 15% of units built averaging 70% AMI. The higher percentage requirements apply in highest-cost areas such as downtown, Cherry Creek and Golden Triangle.

Ownership: 8 or 10% of units built at 80% AMI or 12 or 15% of units built averaging 90% AMI.

Support housing affordability at deeper levels: On-site affordable housing would reach households earning less than past policies, and those with much lower incomes could also rent these homes by combining them with housing vouchers like those issued by the Denver Housing Authority.

Incentivize building on-site: State law requires developer options like donating land or paying a fee, but incentives encourage building on-site and opt-out fees are high to discourage buying out.

Provide for more creative options in large redevelopment: Large sites receiving public funds must meet with the city to discuss community-responsive affordability plans.

Helps those building 100% affordable housing build more: Incentives can also be used by those building all-affordable projects to cut their fees, reduce parking costs or build higher on some sites, helping them serve more residents.

Increase funding for Denver’s Affordable Housing Fund: Fees paid by all other residential or commercial development increases to $2-8 per square foot by 2025, so the city can meet more of the affordable housing needs of our workforce, including very low-wage workers.

A companion policy coming to council soon will help ensure that new affordable inclusionary housing also helps mitigate displacement through a Prioritization Policy. The proposal aims to combat displacement in our city by providing households at risk of, or who have been, displaced from their neighborhood or from Denver priority access to a portion of homes in newly developed or preserved affordable housing so they can stay or return to their community.

Denver will maintain a pre-qualified database of eligible renters and buyers to improve the efficiency of matching residents with affordable housing.

Inclusionary housing isn’t designed to meet every housing challenge Denver faces. It will create a modest but steady supply of moderate income housing in mixed income buildings and communities across the city.

This will help us meet more of our challenges than we can today. Let’s celebrate its passage and keep working together tomorrow.

To learn more about these policies, visit denvergov.org and type the policy name in the search bar.

Robin Kniech is an at-large member of Denver City Council. She can be reached at kniechatlarge@denvergov.org or 720-337-7712.

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