Will the state’s new Inclusion Zones Act resolve Denver’s housing issues?

When State Representative Serena Gonzales-Gutierrez ran for her seat in 2018, she and her future legislative colleagues heard the same concern over and over as they knocked on doors in Denver.

“One of the main issues was affordable housing,” said Gonzales-Gutierrez, who grew up in North Denver, an area she now represents in the General Assembly.

Now she and her colleagues are hoping that a new law passed in the last legislature could contain the housing crisis in Denver and across the state. The law allows cities to require a certain number of affordable housing units in housing estates. Cities must also offer developers an alternative, such as paying a fee. And the law doesn’t define “affordable”.

Gonzales-Gutierrez believes the new law could fight gentrification in their own district, which includes part of Colfax Avenue, a dividing line as it sees it between wealthy residents who live north of the street and more workers who live south of it live living.

“The hope is that this will create the opportunity to have more mixed incomes and more affordability so we don’t have the kind of segregation that has happened because of gentrification,” said Gonzales-Gutierrez.

Robin Kniech, Denver city councilor, served as some sort of technical advisor to the bill, giving state lawmakers a feel for how it would work locally.

“Because Denver is so willing to take advantage of this, it was also important when we discussed changes to the bill to make sure these changes could really be used by local governments,” Kniech said.

The bill aims to create more affordable housing, but Kniech, who campaigns for and passed housing-related laws in the Denver city council, said she believed it would help build moderate-income homes because she said that inclusive zones are usually not intended to help build extremely low-income housing. While not necessarily targeting the city’s poorest residents, Kniech said the law will allow city lawmakers to focus other resources on the city’s lowest-income residents.

“One of the things that is really important to the community is that this tool is for middle-income homes and low-cost homes,” said Kniech.

Denver used to have its own zoning law.

The law required developers to build a percentage of affordable housing units in new developments, but also to reject them for a fee – basically what state law allows cities to do.

However, the old Denver law only applied to units that were for sale, not rentals. It was replaced in 2016 by a new building fee, which flows into a fund for affordable housing. Assistant Director of Housing Debra Bustos said the fund receives approximately $ 30 million annually, which the city then uses to partially fund housing projects (the city also receives federal funding to build affordable housing).

As of 2011, Denver has built or maintained 8,380 income-restricted units, according to Derek Woodbury, spokesman for the city’s Department of Housing Stability.

The new state law will allow cities to require developers to build affordable housing in rental and retail properties.

Before the bill was passed, Kniech said a city council committee had begun looking at how Denver can apply the bill, which will go into effect Sept. 1. Kniech said the committee will work out how the law will be applied in Denver, and the city council in general will have the final say.

While the details are being hatched, Kniech said she wants buildings of 10 or more units to have affordable housing.

1775 Federal Boulevard.  under construction, June 25, 2019. (Kevin J. Beaty / Denverite)

Builders will still be able to pay a fee instead of integrating affordable housing, but “the truth is that we can make this option more or less attractive depending on the calibration,” said Kniech.

“The short story is that we can start with an expectation that says, please build (affordable housing) on-site, and then here’s the option if you don’t want to,” she continued. “But we have some control over how we design these options.”

The city must also define “affordable”, which it has traditionally measured using the median income of the area. A unit at 80 percent AMI – a common threshold for affordable housing projects – means that a single person cannot earn more than $ 54,950 a year to live there. Kniech said new data suggests using a lower AMI and expanding certain requirements, such as: B. ensure that devices remain affordable for decades.

Metropolitan State University of Denver’s social work professor Tony Hernandez said a lack of affordable housing can have a big impact on cities like Denver. He said the new state law would fix some of these problems.

“The lack of affordable housing is a major barrier to jobs and is a major contributor to air pollution because if I have to travel long distances to get to my work or home, I can actually cause more pollution,” said Hernandez. “The intersectionality of this policy is significant and can benefit across the state.”

He said the law is unlikely to be popular with developers who focus on building homes that are made for money. Plus, they might see it as more bureaucracy.

State MP Serena Gonzales-Gutierrez speaks during a rally for Latino / Advocacy Day on Monday, March 11, 2019, in Denver.  (Esteban L. Hernandez / Denverite)

The Apartment Association of Metro Denver, the Colorado Association of Home Builders, the Colorado Landlord Legislative Coalition, NAIOP Colorado (which focuses on commercial real estate development), and the Rocky Mountain Home Association all opposed the bill on its way through the statehouse. During the testimony and in statements, representatives of these organizations suggested that this would not really help create more affordable housing. They also raised concerns about the restrictions created by the law, some of which even compared it to the rental price cap.

The Denver Metro Association of Realtors also rejected the law. Peter Wall, director of government affairs at DMAR, said in a statement to Denverite that the city “needs to work with developers to build these affordable units.”

“DMAR attaches great importance to having affordable housing for everyone,” Wall said in a statement. With this in mind, we hope that Denver and other cities will take a thoughtful, data-driven approach to future affordable housing initiatives. “

The law’s main sponsors were all of the Democratic lawmakers representing Denver. Gonzales-Gutierrez was assisted by State Rep. Susan Lontine and State Sens. Julie Gonzales and Robert Rodriguez.

But the whole state is struggling with a housing crisis. Lawmakers heard stories from places like Summit County, where Gonzales-Gutierrez said teachers sleep in cars because they can’t afford to live there. Teacher affordability is also a concern in neighboring Eagle County.

“This is not just a Denver problem,” said Gonzales-Gutierrez.

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