Like many communities across the country, Denver is facing an affordable housing crisis. Check out the op-ed below that ran in the Colorado Real Estate Journal from Kenneth Ho on the critical role Master Developers like Westside Investment Partners can play in helping to address affordable housing needs. Westside Investment Partners has a history of working on projects that incorporate affordable housing including the Loretto Heights Project in Denver and Blue Vista in Longmont.
Master Developer’s Crucial Role in Affordability
By: Kenneth Ho, Principal Westside Investment Partners
As developers we have an important role to play in creating new, innovative, and equitable solutions to the housing crisis facing cities across the country. While “developer” has become a loaded term in today’s vernacular, I take pride in my role as a community builder that develops the structures and streetscapes where we live, eat, work and play. That said, we can and must do better.
The pace of development in “destination cities” like Denver has meant that change feels quick and severe. The housing crisis, however, is not the result of over development, but rather a shortage of development — a simple supply and demand issue. A complex set of factors resulted in nearly three jobs created for every one housing unit built in Denver. The chart below shows the trends in the City’s housing units (rental and for-sale), relative to population, job growth and median home values from 2010-2018. You can quickly see that as population and job growth significantly outpaced the delivery of housing, home prices increased at a rapid rate. It would be too simplistic to simply say – we must build more homes – how and where we build them is equally important.
Cutline: Denver Metro Census & Department of Labor data from 2010 to 2018 shows net population growth (blue) of 399,144 (14%), net job growth (yellow) of 352,669, cumulative home value increase (green) of $177,874 (68%), and net housing (for-sale and rental combined) unit increases (orange) of 124,906 over the same time period.
Traditionally, Denver has subsidized low-income housing through federal and state tax credits and city loans or grants. However, that model is tremendously expensive and has tended to concentrate affordable housing in already lower income communities. Using this model to address Denver’s need for 30,000 affordable units would require billions in state, local and federal subsidies.
Recent research by the Equality of Opportunity Project questions whether those billions would be well spent. The Project concludes that neighborhood factors like poverty rates, educational attainment and employment rates are important contributors to intergenerational economic mobility. The study shows
that concentrated poverty creates a vicious cycle that negatively impacts the economic prospects of youth of color (https://cityobservatory.org/local-neighborhoods-matter-even-more-for-black-kids/).
The study’s policy implication is that for our communities to become more equitable and sustainable, they need to be more economically diverse. We can no longer continue to concentrate affordable housing in already low-income areas. We do not just need more housing, we need to provide diverse housing options in more diverse locations by combining market driven solutions with traditional affordable housing.
Westside, who I am a Principal with, is a Master Plan Developer. We develop master plans, create community benefits and design and install infrastructure on large parcels of land and then sell smaller portions of the site to builders who develop the commercial or residential buildings.
As a Master Plan Developer, we are uniquely positioned to pioneer the more equitable development that is being demanded by progressive municipalities and consumers. With larger planned communities, we can build inclusive housing that can accommodate different family sizes, incomes and cultures while pooling resources to provide additional community benefits like grocery stores, public art, parks and services that contribute to public health.
There is of course no silver bullet. We need to use multiple strategies to address decades of underdevelopment of both people and places. At Westside, we have explored numerous new policies that we hope to implement as part of a new model of inclusive development. These policies will focus on a community-led process that first develops people and then creates places and infrastructure that support community goals.
Public policies like a Neighborhood Preference Policy (NPP) can reverse some of the displacement caused by development. Already instituted in Portland, San Francisco and Austin, NPPs identify individuals and families who have been displaced from a neighborhood and places them at the front of line for affordable housing that would allow them to return to their community.
At our Blue Vista community in Longmont, CO, Westside developed a master plan that combined market rate homes with 25% (twice the city’s requirements) affordable for-sale homes owned by Elevation Community Land Trust. Using a Community Land Trust (CLT) created permanent missing middle homeownership options for families making less than 70% of the area median income (AMI). We plan to explore CLTs for more permanent, below market residential and commercial buildings.
Additionally, financial education programs and social enterprises for community members can also play an important role in developing stronger communities. These capacity-building programs enhance access to capital and wealth creation opportunities are critical for upward economic mobility and for building financially sustainable neighborhoods.