with a house only being on the market for 26 days before selling at an average price of $496,382, according to July's market report.
This goes to ask, how many more homes will be available? The Denver-area developers are responding to this situation by creating smaller, denser, and taller apartments and homes that young adults and first-time buyers may not necessarily describe as affordable but at least attainable.
But the developers are meeting resistance on many fronts and warn that creative solutions are needed to allow people of average means to own property so Denver doesn’t become a city dominated by transitory apartment dwellers and the affluent.
“We are going to be growing out because we can’t grow up,” said Jeff Plous, a Denver-area broker and developer, speaking on an affordable-housing panel at Denver Design Week.
Many young adults want to live in the urban core or in older city neighborhoods, which has slowed suburban sprawl. But the urbanization trend also has raised pressures to increase density in already-developed neighborhoods, and that is generating push-back.
“(Millennials) want to live in the city and have a lifestyle. Functionality matters more to them than size,” Plous said.
That has contributed to a proliferation of micro-apartments and the emergence of accessory dwelling units, or cottage homes and apartments above garages at the back of existing lots. Development also is concentrating around transit stations.
In the River North Art District, it is manifesting as a push to get 16-story buildings approved near the commuter-rail stop at 38th and Walnut streets, said Jamie Licko, president of the district.
That height is double the city restriction in the area. As a tradeoff, developers will provide four times the number of affordable units the city requires and affordable commercial space, the latter of which is a new concept in Denver, she said.
A problem going forward is that millennials can’t easily raise families in 350- to 600-square-foot micro-apartments. They need options that allow them to own within price ranges their incomes can support, or they will be forced out to the periphery or to other more affordable cities.
“I have a heart for Denver, but I can’t afford to live there,” said a member of the audience, a young woman who lamented her relocation to Broomfield after housing costs became too high in Denver.
“My biggest fear is we become a transitory city,” said Jonathan Alpert, a managing partner at Westfield Co. who also was on the panel, called “Designing an Affordable Denver: Housing Solutions for the 99 Percent.”
Plous said he was part of a team that attempted to build entry-level homes in Denver’s Sunnyside neighborhood, only to find they couldn’t do it for under $500,000.
“Land was expensive and the construction costs were continually rising,” he said. Xcel Energy also required the project to bury power lines versus extending the existing lines from nearby poles, which added another $140,000 in unexpected costs.