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Denver, nonprofits and developers strive to increase affordable housing

By: Savannah Mehrtens Apr 12, 2023

Along with Mercy Housing, the Denver Housing Authority (a quasi-municipal corporation) is providing a 99-year ground lease to build an affordable housing development at 901 Navajo Street, Denver, that will focus on serving American Indian and Alaskan Native populations. Courtesy of Mercy Housing

The plethora of mayoral candidates forced the issue of crushing real estate costs and lack of affordable housing front and center in recent months.

Less talked about is the effort to curb the problem launched by outgoing Mayor Michael B. Hancock.

A conglomerate of organizations — from the city of Denver to nonprofits to developers — is bringing tens of thousands of units online in the next year. Several of them have opened in recent weeks, including those directed to American Indian and Alaskan Native populations and troubled teens.

Anytime Estimate, a housing finance calculator, ranked Denver the seventh most expensive city in 2022 out of the 50 top U.S. metro areas from housing sales data since 2000.

The cost of living in Denver is 11% higher than the national average, according to Payscale. Denver housing is 36% higher than the U.S. average, with median rent reaching $1,863 and home prices averaging $612,791.

In the U.S., an affordable cost for housing — which includes monthly rent or mortgage plus utilities — is typically no more than one-third of gross household earnings according to the Denver Department of Housing Stability (HOST).

Affordable housing is defined by area median income (AMI) and is different per county. Those who qualify must make 60% or less of the AMI, in most cases.

More than 1,800 affordable units that received city financing are currently under construction at 33 sites throughout Denver, according to the city’s housing department. Another 728 income-restricted units are in the pipeline to receive city funding. The city expects construction of those units to begin within the next year.

While this accounts for just over 7% of the total housing inventory now, the department’s goal is to reach 8% by 2026, according to Renée Gallegos, the Deputy Director of Housing Opportunity. As of now, that goal is at about 7.4%, according to Gallegos.

“So we’re making good progress towards that goal of increasing the overall percentage, hitting that 8% benchmark,” Gallegos said. “But we’re working hard to make sure we get there in the next five years.”

An AMI of 100% in Denver County for one person is $82,100 and for two people is $93,800, according to data from the Colorado Housing and Finance Authority.

Those who can qualify for affordable housing must make no more than $49,500 for one person or $56,580 for two people in Denver County. This scale measures all the way to eight people, maxing out at $93,300.

“We recognize that’s not the situation for particularly the lower income folks in the region,” Gallegos said. “And they have to spend significantly more and it makes them cost burdened and puts them at risk for housing instability and inability to accumulate wealth or to access medical care.”

Denver Mayor Michael Hancock established HOST on Sept. 27, 2019 with the executive order 145. This department aims to connect residents with equitable access to housing options that meet their affordability needs, according to Gallegos.

The Denver City Council approved a plan in 2022 to expand housing affordability. It requires any residential developments with over 10 units to make 8% to 12% affordable housing units for those with 60% or less of the AMI.

Current housing projects

Mercy Housing Inc., a national affordable housing nonprofit headquartered in Denver, is one of many organizations and developers bringing new units online in the metro area. The organization owns and operates 19 properties across the state, providing affordable housing with resident services.

Along with Mercy Housing, the Denver Housing Authority (a quasi-municipal corporation) is providing a 99-year ground lease to build an affordable housing development at 901 Navajo St. that will focus on serving American Indian and Alaskan Native (AI/AN) populations.

This development will support approximately 187 households, will be open to all applicants earning 30-60% of the area median income and will be co-located with a 19,000-square-foot, federally-qualified health clinic.

The AI/AN population doubled between 2010 and 2020 but is represented four times more than the general population in homelessness, according to the Metro Denver Homeless Initiative.

Shelly Marquez, president of Mercy Housing Mountain Plains, said this will be the first new development serving Native American communities with a federally-qualified health care center on site.

Even with the resources available, Marquez said it will still be a financial challenge.

“We really believe that the Navajo site will give us an opportunity to focus in on how we’re serving the American Indian-Alaskan Native community,” Marquez said. “Along with opening it up to others who are in need of housing.”

There has been a historic displacement of American Indian tribes in metro Denver, leading to a disproportionate increase in homelessness, according to Bill Ziegler (Kul Wicasa Lakota), principal housing consultant with Native American Housing Circle (NAHC).

“We are finally being seen,” Ziegler said. “You’d be amazed at what that can do to a person’s soul when they finally realize that, my goodness, they see me. They see me and things are going to get better for us.”

Failed federal policies have led to the understanding as an American Indian community that they must actively develop a future for the next generations, he said, including projects like 901 Navajo Street. The need is so great, that Ziegler is encouraged to keep finding ways to do more for the AI/AN community even after this project is complete.

“We understand as American Indian people that the place that we find ourselves today, in 2023, a lot of that is based on historical issues,” Ziegler said. “We are here today because of the failed federal policies or the intentional federal policies that we just have not been able to overcome as a community.”

Pennrose, Rivet Development Partners and TGTHR (a nonprofit organization that currently operates The Source in Boulder, “a federally recognized and state licensed Homeless Youth Shelter”) broke ground on an affordable housing development March 16 at 2700 Wewatta St. The development will be 56 units specifically for those ages 18-24 who are homeless or transitioning out of Denver’s foster care system.

“As Denver faces a youth homelessness crisis, having quality, safe housing, tailored supportive services, and access to employment opportunities is the first step in helping youth transition to a successful, independent life with economic mobility,” Shannon Cox Baker, regional vice president at Pennrose, said in a news release.

The financing for the project came from Colorado Housing and Finance Authority, the Denver Department of Housing Stability, the Colorado Division of Housing, Denver Housing Authority, Red Stone Equity Partners and American Express, Bank of the West, and HUD.

The Northeast Denver Housing Center, a 40-year-old nonprofit, held a grand opening on Friday at 3500 N. Uinta St. for Central Park Apartments II and III as well as the announcement of Central Park condominiums.

In a year, this project will have 200 completed affordable rental units with 70 units for affordable homeownership under construction, according to the release. The condos, which serve households between 60% and 80% of Denver’s AMI, are set to open in early 2024 and only 15 units remain for reservation.

While new projects continue to come online, the goal of reaching 8% of the total housing inventory by 2026 will always be a moving target, according to Derek Woodbury, communications director at HOST. The housing inventory not classified as affordable will continue to increase, among other factors that could impact that goal.

“There’s a numerator and a denominator involved in that and the denominator is all of the total housing units in the city and county of Denver,” Woodbury said. “So that’s continually moving, it’s continually going forward.”

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