Amidst the housing crisis that Denver is in, Love thy Neighbor acknowledges the effort given by the City of Denver to prioritize affordable housing. We recognize, in light of at-risk neighborhoods that are losing diversity, we need more inclusionary housing to truly remain a city for all.

We applaud the Office of Economic Development’s work with affordable for-sale housing and understand it is a complicated process. In an effort to help reach Denver’s 2020 sustainability goals around affordable housing by keeping 80% of Denver’s neighborhoods affordable, we work to provide more for-sale housing that is attainable.

 

In 2016, the City of Denver identified neighborhoods that are “vulnerable” to gentrification in their report Mitigating Involuntary Displacement. One root cause of this displacement is a lack of affordable housing. Denver has addressed many of the affordable housing concerns and actions in Housing an Inclusive Denver. This report is Denver’s policy, strategy, and investment plan for affordable housing that was adopted February 2018. Below are some data points pulled from the report.

Why is affordable housing a concern?

“Denver is at a pivotal point where despite extremely low unemployment (2.2%), high workforce participation (90%+), and tremendous economic growth, housing costs are growing at such a rapid pace that incomes cannot keep up. rental units are out of reach for low- and moderate-income households.”

 

  • Shortage of approximately 26,000 housing units for the lowest earners
  • 3,336 residents experiencing homelessness on any given night in Denver, the City
  • 35,000 homeowners paying too much for their existing homes
  • Nearly half of all renters are cost-burdened, meaning they pay more than 30% of their income toward housing

How much money is Denver putting toward affordable housing and where is the money allocated?

 

  • Denver has 150 Million to a dedicated fund
  • 40 – 50% of housing resources will be invested to serve people earning below 30% of area median income (AMI) and those experiencing homelessness who are seeking to access or maintain rental housing
  • 20 – 30% of housing resources will be invested to serve people earning 31% to 80% AMI who are seeking to access or maintain rental housing
  • 20 – 30% of housing resources will be invested to serve residents seeking to become homeowners or remain in homes they already own.

When you drill down into the report about 10% is going toward homeownership for those in the 60%-80% AMI. This AMI level is referred to as the “missing middle”. As the lower middle class gets fewer resources and homeownership opportunities, they will be pushed out of the middle class. This missing middle includes our beginning workforce- teachers, firefighters, and police officers. They are considered underserved onThe U.S. Department of Housing and Urban Development’s (HUD) area median income scale making homeownership out of reach in Denver’s Market.

How long are the units affordable for?

“Denver’s existing Preservation Ordinance is intended to preserve existing affordable housing (those restricted through a covenant, contract or other affordability restriction on the property) through two primary tools: “right-of-first-refusal” and its affordability period. Currently, the Preservation Ordinance requires that any affordable rental housing development receiving City subsidies be subject to a minimum of twenty-year affordability contract.”

 

This ordinance presents a problem because, “The City could lose its existing affordable housing stock if income-restrictions expire, and households living in these affordable units are also at risk of displacement if the building converts to market rate pricing that is unaffordable to existing households.” Rentals are not a sustainable solution.

Let’s go deeper, what are the root causes of this housing crisis? What is a vulnerable neighborhood?

What defines a neighborhood as vulnerable? Well, according to a study done by Urban Land Institute (ULI), “Vulnerable neighborhoods are defined as areas that show lower than average median household incomes, higher than average renter-occupied housing, and are lacking in residents who’ve attained higher education.”

 

A deeper look at these vulnerable areas shows great inequities in education and green space as seen in these equity maps. The state of vulnerable neighborhoods is also highlighted by the data given in the Status of Denver’s Children’s report that shows the inequities in these “vulnerable” areas rank amongst the highest in barriers to success for children including higher numbers of obese children, teen mothers, child poverty, and violence.  

Is homeownership an answer to displacement?

Homeownership is one of the only ways to build wealth and close the wealth gap. The Netflix documentary, “Explained,” has an episode called “The Racial Wealth Gap,” which does a phenomenal job explaining how past injustices in homeownership have bred present sufferings and have contributed to the wealth gap.

 

However, the benefits of homeownership are not just financial but also social. One benefit of homeownership is on education as detailed in a report by Habitat for Humanity. The National Association of Realtors also outlines the social benefits of homeownership in their report, Social Benefits of Homeownership and Stable Housing.


Housing affordability is Colorado’s biggest issue, according to a Colorado Mesa University poll. As reported by Bank Rate (2017), Colorado is ranked among the worst in the country for housing affordability because of the cost of living, shortage in housing, and construction costs. If higher than average renter-occupied housing is one factor that defines vulnerability, and the wealth gap was created by the lack of homeownership opportunities, to combat this, there must be a concerted effort for equity around homeownership.