Proposed Policy Change: New Housing Developments in Denver would be required to set aside some units for lower income tenants.
On Wednesday, March 2nd, Denver officials unveiled a proposed affordable housing policy that, if adopted, would mandate new residential projects in the city set aside at least 8% of their condos or apartments as income-restricted housing for 99 years.
As outlined in a summary document, the policy would apply to all new housing developments of 10 or more units in the city. The number of units the city would require to be set aside as income-restricted, affordable housing would range from 8 to 15% depending on factors including where a project is located and what level of affordability it would provide.
Developers, per state law, would still have the option to buy their way out of the mandate or strike another agreement – such as providing land for future affordable housing construction – to avoid providing the income-restricted apartments or condos in their projects. According to the city’s summary, the cost of giving cash instead of affordable housing would range between $250,000 and $478,000, depending on the project.
Beyond requirements for affordable housing in new projects, the draft proposal also outlines a steady increase in the city’s linkage fee. The fee, which feeds the city’s affordable housing fund, would only apply to commercial development and residential projects of nine or fewer units. However, under the proposed policy, it would more than double for all kinds of construction between now and July 1st, 2024.
The public is being asked to offer feedback on the proposal between now and March 14th, online at denvergov.org/affordabilityincentive. The Denver Planning Board and City Council are expected to debate and vote on the new policy this spring. If adopted, city officials anticipate it will take effect on June 30th of this year.
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The biggest challenge I am seeing in the market is a disparity in pricing expectations between buyers/tenants and sellers/landlords. Buyers and tenants believe that sellers and landlords should have a sense of urgency to sell or lease, given that certain properties have sat on the market vacant for an extended period of time due to the Pandemic. However, that is not always the case which can make for interesting negotiations.
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2373 N. Central Park Blvd. #200
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Size: 2,841 SF
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