USA: Colorado Planning & Property Review
The exodus of Americans living in high tax states and those preparing for retirement are increasingly moving to cities and states in the American west. As a result the city of Denver is working to meet the demands of a growing population and prevent an increase in housing shortages. It is also giving way to construction to new urban residential towers some planned on being more than 70-stories tall that will change the landscape and views of the Rocky Mountains for many years to come in a report by the Seattle Times that examined the future changes of population and construction in the western states of America.
For cities like Denver that have meshed the urban and suburban areas these new construction projects are having buildings that exceed height rules as long as the builders will help with providing affordable housing. And as a result the original residents in the area could find themselves forced out in order to accommodate the new commercial and residential developments. The city has increased its population by 110,000 or an increase of 18% and is in need of 40,000 homes to meet demand. Already there are a dozen hotel, office and residential tower constructions in Denver.
One Denver location that is in the middle of the urban construction is the African-American neighbourhood of Five Points also known as the 'Harlem of the West'.
Teague Bohlen, a Five Points resident and professor of creative writing at the University of Colorado at Denver speaking to the Seattle Post:
“People in Denver are happily spoiled by the fact that we can look left and right and see the mountains,”
“That is certainly being threatened, and it will likely get worse.”
Denver Mayor Michael Hancock says:
“There are very few cities that have faced the growth we’ve seen in recent years."
"And there is no doubt that it’s more economically and environmentally efficient to go higher.”
Plans that will change the skyline views of the Front Range include development for a new 1000 foot tall skyscraper on 17th Street but the property deal was put on hold but would provide the usual mix of residences, hotel and shops.
Project Manager for the new skyscraper Michael Santora, the principal partner of Crown Architecture and Consulting:
“It’s constantly changing now, all of these neighborhoods."
“The Colorado lifestyle is a thing that people flock to. And businesses see a lot of talent and are now following it there."
One plan that was approved by the Denver City Council this past December was the development of River Mile that will sit on land by the South Platte River near the Denver Bronco's football team Mile High Stadium. The land is currently a rarely used recreation area. The development could provide homes to 15,000 residents. The arrangement between the city and the builders is to allow a building to be higher than five stories for gaining affordable housing. The new towers are planned to be 30- to 40-stories in height and another tower at 59 stories.
Charles Bernard, a developer says:
“Denver is a place where now, if you don’t have a brand-new building, you don’t stand out anymore."
In order to meet future demand Mr. Bernard adds:
“This is a place people really don’t go to much now."
"This will make it more useful.”
Denver Market Numbers
The property market for Denver this past year had its strength in the retail sector with the Denver Post reporting asking lease rates of $19.34 per square foot were the new record rates for 2018.
Almost 709,000 square feet of space of new and used property was leased in 2018, an increase of 18.9% compared with 2017.
Justin Kliewer, a vice president with CBRE retail services tells the Denver Post:
“There is generally perception that we have more available (big boxes) than we’ve ever had, and that’s not true.”
“We’ve got about 75 right now in the Denver metro area, and we had as many as a 100 in 2011, 2012. The good boxes are going to get leased.”
The number of new hires created in the Denver market through November 2018 increased by 3.2% or 43,527 new jobs and statewide Colorado added 80,000 new hires.
Mr. Kliewer of CBRE says of the records set for gains in the industrial and office markets in 2018:
“When retailers look at our demographics, they see a gold mine.”
By the end of 2018 2.9 million square feet office space was taken up with rents reaching an average asking price of $28.34 per square foot according to research by CBRE. There is currently 3 million square feet of new under construction in the Denver market. For 2018 almost $3 billion worth of transactions took place for Denver large scale office buildings with more than half of those bought in the downtown area.
As for industrial space the CBRE reports that a record $1.7 billion worth of property transactions for 2018 that includes $206.1 million for a 14 building deal by Denver International Airport.
For 2019 with 4.2 million square feet of new construction of commercial space at this time 3.5 million has yet to sign new tenants.
Denver and other Colorado cities along with other locations in America are trying to create policies to limit gentrification or involuntary displacement of residents in the urban real estate hotspots undergoing new development.
Other cities experiencing a real estate boom besides Denver are Aurora and Fort Collins which are having price increases and the changes to their way of life as these less expensive cities have become popular.
Cameron Gloss, Fort Collins’ long-range planning manager tells the Colorado Sun:
“Price increases are happening throughout the community, throughout the Front Range.”
“No big mystery there. I’ve been on panels with other planning directors, and this story seems to be coming up in many communities, where we see displacement going on. It’s a function of real estate prices.”
One Fort Collins area known as Tres Colonias with its three separate neighbourhoods of Alta Vista, Andersonville, and Buckingham are an example of local planning managers trying to accommodate the residents in an area that is now attractive for buyers and investors. There are some protections that are attempted to protect mobile home parks for low-income residents but no specific policy is in place.
Fort Collins does not have an anti-displacement policy as Mr. Gloss points out:
“The market’s going to dictate if an area ends up changing.”
“We have policy that supports diversity, but no regulations in place specifically."
Even areas that are not being converted to luxury enclaves are witnessing some displacement. New residents are coming in to these locations wanting to make architectural changes to the neighbourhood.
Beth Sowder, Fort Collins’ social sustainability department director speaking to the Colorado Sun:
“We’re seeing changes from primarily Hispanic neighborhoods to new urbanism, young white couples coming in and revamping homes.”
“Property values are going up, and that’s concerning to longer-term residents.”
In Aurora the new demand and increasing prices are beginning to force out low-income residents.
Aurora city councilwoman and resident Crystal Murillo says :
“We’re Colorado’s third-largest city, but we don’t even have an affordable housing plan.”
“It’s never been a goal of the city. It wasn’t until 2017, when myself and couple other folks were elected, that we made it a priority.”
“Gentrification is happening, starting with housing."
“We’re on the border, so we’re getting an influx of folks priced out of Denver. It’s a regional issue. When one city doesn’t do enough for affordability, that impacts other municipalities. Multiple municipalities have to commit to creating affordability, equity and access.”
A previous budget included $1 million to help fund local affordable housing but that amount does not come close to what is needed for local housing needs.
Jason Batchelor, deputy city manager regarding local gentrification :
“There’s no silver bullet."
“It requires a broad variety of tools. This council has discussed and is working on a more
comprehensive policy to address displacement and gentrification.”
One plan Ms. Morillo would like to have in place is to assist low-income residents into home ownership.
Interviewed in the Colorado Sun Ms. Morillo says:
“Gentrification isn’t just about housing.”
“It’s about jobs that don’t lead to a life in poverty. And culture. If you only create affordability for a few, then your family, your acquaintances move away, the fabric of the community starts to change.”