Two recent events in Denver — a Five Points coffee shop sign that appeared to celebrate the effects of gentrification and the unraveling of a city-run homebuyers’ assistance program — have spurred new discussions about the lack of affordable housing options locally and the challenges in addressing the problem.
Six months after an Ink! Coffee shop blew the lid off a long-simmering controversy by putting out a sandwich-board sign appearing to celebrate gentrification, it’s clear people haven’t forgotten about the issue. They’re plotting new strategies and taking steps to push back on the negative effects of what happens when once-neglected neighborhoods like Five Points become the center of attention.
At a recent panel organized by the Denver Metro Association of Realtors titled “Gentrification or Revitalization?” City Councilwoman Robin Kniech told the room full of real estate brokers about the city’s recent efforts to stem the tide of people being priced out of their neighborhoods. They include an emergency rental assistance program that supported 486 low-income families in late 2017 and 2018. The City Council voted Monday to inject another $1 million into that program.
Kniech says Denver is moving into the “next frontier of housing policy” — displacement-fighting measures including emergency rent and utility assistance and a legal services fund for people facing eviction.
But the city and others also are trying to find ways to help low-income families buy their own homes. That was the aim of a city program started in about 2004 that put residents in subsidized, income-restricted housing. Problems with the program were so big — the city and industry participants didn’t adequately monitor resales and nearly 200 homes are now in the hands of owners whose income eligibility wasn’t verified, and who likely paid market prices — that new approaches are needed.
The city has set its sights on working with the Denver Housing Authority to purchase properties and establish long-term land leases to subsidize affordable housing projects. Local activists who are frustrated with the slow pace of these efforts are blazing their own community land ownership path as a means to preserve affordable housing in their neighborhoods.
For Kniech, when talking about gentrification, it’s important to look through the lens of history.
Before new investment and revitalization came abandonment. Government and the private sector stopped paying attention to certain neighborhoods, largely because “we didn’t like or value who was living there as much as we did (people) in other parts of our city,” the councilwoman said Tuesday during the panel discussion.
Lack of investment allowed neighborhoods to flounder economically, leaving them open to the disruption by new money when consumer tastes changed and the urban core became desirable again. Now, with investment dollars flowing through nearly all corners of the city, Denver officials and their private and nonprofit partners are racing to catch up with gentrification’s negative impacts like resident displacement and skyrocketing home prices.
Displacement and a lack of housing opportunities for low-income people isn’t just a Denver problem. It’s nationwide.
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Washington D.C. –based advocacy and research group, the National Low Income Housing Coalition released a report last spring detailing the shortage of available rental homes for extremely low-income renters; people and families that live below the federal poverty level or make 30 percent or less of the area median income. An estimated 11.4 million American households met those criteria in 2015, according to the coalition’s research. There were just 7.5 million units available that they could rent for a price that would not be a severe financial burden.
Deficits were found in all 50 of the largest metro areas in the country. The Denver-Aurora-Lakewood area was found to be 62,818 affordable units short of the need for extremely low-income renters.
“These are renters where we know that more 70 percent of them spend more than half of their income on rent already,” Andrew Aurand, the coalition’s vice president for research, said. “So when you’re talking about a neighborhood that is gentrifying or redevelopment is occurring and rent is going up, they are already in precarious positions in terms of being able to afford their housing and this just makes it even worse.”
The coalition advocates for more investment in rental assistance at a federal level, but says a growing numbers of cities, like Denver and Washington D.C., have their own programs. Being pushed out of rental housing can damage families in a variety of ways. Adults can lose their jobs because they can’t access them anymore. Kids can be pulled out of school or their academic performance can suffer. In worst-case scenarios, families become homeless.
“It is much cheaper to keep those families stably housed by helping them with rent for a month or two rather than having them become homeless and then helping them find housing again,” Aurand said.
Supporting people who make 30 percent of the area median income or less is one prong of Denver’s housing plan. Providing opportunities for affordable home ownership is another.
Plans are now in motion to double the city’s $15-million per-year affordable housing fund using puffed-up marijuana sales taxes and city budget dedications. The Denver Housing Authority is expected to issue bonds on around $105 million from the fund and put that money toward efforts including buying land to create long-term land leases for affordable housing, similar to what the Colorado Community Land Trust has in the Lowry neighborhood and other parts of Denver.
Unlike the city’s existing housing inventory, which is kept affordable by deed restrictions that expire after 20 years or so, the land leases could last up to 99 years and be renewed, Kniech said. Basically, they would provide affordability in perpetuity, and not see homes age out of the program as will soon happen in Green Valley Ranch and elsewhere.
“Many of our counterparts (cities) are doing 99-year affordability and they hold on to ownership of the land in a long-term way,” Kniech said. “Instead of trying to spend your taxpayer dollars and then getting 15 or 20 years of affordability you’re going to see us going us toward lifetime, 99 years.”
Bond funding for land acquisitions isn’t expected to be available until August, according to a recent presentation by city staff. The city is expected to work on a management agreement with the Denver Housing Authority in the meantime.
Even if long-term affordability is baked in, the city’s land lease plan has drawn criticism.
Candi CdeBaca is a community activist from the Swansea neighborhood and a member of the Globeville, Elyria-Swansea Coalition Organizing for Health and Housing Justice. Last year the group began lobbying the city for funding to create a community land trust through which a nonprofit group of residents would buy properties and maintain control of the land while putting the houses on the market at affordable rates. With no financial support from the city, the group earlier this year bought three homes in the neighborhoods with plans to renovate them and sell them at subsidized prices. CdeBaca, who is running for the District 9 City Council next year, called the land trust where the city owns the property a “twisted and perverted” version of the idea. Even when nonprofit foundations own the land, it defeats the purpose of maintaining local control and building community wealth, she says.
“Community land trusts don’t make sense unless they are owned by the community,” CdeBaca said. “What we’ve argued is the affordable housing model here in the city and across the country creates perpetual renters without ever giving people the tools or the access to build wealth.”
Local Realtor Lori Pace makes a similar argument about the way the constraints of the city’s affordable housing program hamstring those who buy into it. Buyers can only qualify for the city’s affordable homes if they make a percentage of area median income that on its own would not give them the buying power to find a home, Pace said at the recent housing panel. Once they are in, the city caps the value their home can accrue at 3.5 percent per year, a measure Kniech says is essential to a program the uses taxpayer dollars to put people in homes. But Pace argues the cap undercuts owners’ abilities to move into a new, non-income restricted home, particularly at a time when the prices around them are going up and up and up.
“As a Realtor with a conscious, when I let (my clients in Stapleton) know that their neighbor made $100,000 in one year, 3 percent doesn’t make them feel very good,” Pace said. “Unfortunately, I think it is going to take a while before we can change that from a governmental standpoint. Now it’s about the education piece of letting them know that this may be a short-term opportunity, but the only way to get to the next level is to figure out how to get into the (non-subsidized) market.”
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