APARTMENT ADVOCATE
NATIONAL APARTMENT ASSOCIATION
Denver City Council Overhauls Zoning
Rules to Increase Affordable Housing
A
fter a lengthy debate, the Denver City
Council voted 7-6 to change its Inclusionary Housing Ordinance aimed at
increasing the availability of affordable
housing in the city. The changes to the original
2002 ordinance include a zone system for the city
and increased incentives for developers to provide
affordable units. Mayor Michael Hancock is expected to sign the bill, which will then go into
effect Dec. 1. The law applies to for-sale multifamily developments.
While developers, city officials and affordable
housing advocates agree that increasing available
apartment stock and other rental housing in Denver would help low-income families, concerns remain in the development community that the
incentives still aren’t large enough. According to a
city-conducted market analysis, Denver faces a
shortage of more than 30,000 affordable homes.
The law requires that 10 percent of units in
apartment communities with more than 30 units
must be affordable for people making moderate
incomes. That is defined as a person who makes
80 percent of area median income, which is about
$42,000 annually. However, the State Housing
Board president believes the 80 percent threshold
fails to address most of the problem, saying that
there are tens of thousands of people in the zeroto-60 percent threshold that will still need help.
Developers also have the option to pay cashin-lieu of designating more affordable units. The
ordinance splits the city into three types of zones
based on the cost and need in the area. For “high”
zones, where median for-sale home prices are highest, the cash-in-lieu payment is 70 percent of the
sales price. In “medium” areas, the payment will be
50 percent of the sales price and in “low” areas, the
payment will be 25 percent of the sales price.
If developers provide affordable units, they are
given a cash incentive, which also varies under the
new law depending the cost in the area surrounding a development. Under the 2002 ordinance, the
incentive was $5,500 per unit. For the “high” zones,
this incentive now will be $25,000 per unit, for
“medium” zones, $6,500 per unit and for “low” zones,
$2,500 per unit — unless the development is located within a half-mile of public transit, in which
case the incentive is bumped up to $6,500.
The incentive is meant to help cover the cost
of permit fees, according to the bill’s sponsor, Councilwoman Robin Kniech. However, even with a
substantial increase to the incentive, developers
could still stand to lose money on affordable housing units.
Source: Denver Post; Denver Business Journal
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