Now that residents of Lakewood have passed a strict growth-control measure limiting how many new houses and apartments can be built each year, will this city of 155,000 become the place in the metro area that developers avoid?
Reid Davis, a developer who is behind the 293-unit Brickhouse at Lamar Station apartment project in Lakewood, thinks so.
“We’ve had a lot of investors unwilling to take the risk (of building), even with (Question 200) swirling,” said Davis, founder of Riverpoint Partners. “I don’t think people know how difficult it is to get housing permits. It took us 18 months to get permits, and we had to put up millions of dollars.”
And that was before Question 200 passed in a special election Tuesday by a 53 percent to 47 percent margin. The measure limits the number of new residential units that can be built in Lakewood to 1 percent of existing housing — or about 700 permits in the first year — and requires development proposals with 40 or more units to first get City Council approval.
The ballot measure comes amid increasing concern about the fast pace of development on the Front Range, where population growth in recent years has made it increasingly difficult for people to afford a home. Growth also has people worried about dwindling green spaces in an expanding metropolis and rising buildings blocking out mountain views.
Davis said he recently canceled a contract to buy property on Lamar Street in Lakewood to develop into a multiuse project with retail and residential elements. The risk was too great, he said, with the specter of Question 200 becoming law.
“It’s not going to happen if there’s this uncertainty,” Davis said of the development environment in the city.
Attorney Bruce Likoff, who represents developers, was more blunt about the impacts of Question 200.
“Will developers and lenders red-line Lakewood now?” he asked. “They might. Uncertainty is never a businessperson’s friend.”
Details of how the policy will get rolled out are not yet clear. The city issued a statement Wednesday saying that because of “the level of complexity in Ballot Question 200, the city’s departments will work diligently to examine how it will affect all developments in the city.”
Likoff said Lakewood City Council will essentially end up “picking winners and losers” as city leaders attempt to figure out who gets to build how much and where.
“And that affects not only developers but neighborhoods,” he said.
But John Henderson, an attorney who lives in Lakewood and has worked on land use issues for years, said the warnings being issued by the real estate and homebuilding industries are overblown.
“Once they know what the rules are, they’ll adjust their business models,” he said. “This is a prime location — they’ll continue to build, continue to make money. They will adjust like they have for the last 200 years.”
What has changed, Henderson said, is that residents of Lakewood now have a seat at the table when it comes to crafting development plans.
Martin Shields, a professor of economics at Colorado State University, said Tuesday’s vote in Lakewood was in essence an expression of group dissatisfaction with what seems like unfettered growth across the metro area.
“There is a growing sense of dissatisfaction with the Colorado lifestyle right now,” Shields said. “This is not the Colorado that a lot of people signed up for.”
Despite the frustration residents might be feeling about increasing traffic and construction in their everyday lives, Shields said, the law of supply and demand means one certain thing for Lakewood now that 200 has passed: Home prices will go up.
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Affordability was a big discussion point during the campaign for Question 200, in which opponents of the measure heavily outspent those pushing for growth limits. Kimball Crangle, Colorado market president for Gorman & Co., said a firm like hers, which builds affordable and workforce housing, will find it harder to operate in Lakewood with a housing cap in place.
“Any limitation on supply causes the pricing of houses to increase,” Crangle said.
Habitat for Humanity was another provider of affordable housing that opposed Question 200.
