Forest City has acknowledged that it will “probably not” achieve the 10 percent affordable for-sale goal contained in its development agreement with the city by the time its build-out of market rate houses in Stapleton is completed. To avoid that result, the Stapleton Citizens Advisory Board (CAB) and the Stapleton Development Corporation (SDC) are pressuring the city of Denver and Forest City to develop a plan to accelerate the production of affordable housing at Stapleton. One immediate response is the city’s commitment to quarterly meetings with those groups to work on such a plan.
SDC Chair Kevin Marchman says construction of for-sale affordable housing “absolutely must keep pace” with market rate products. He is pushing for a plan to be in place by the end of the first quarter of 2016. He says, “If we fail here (in Stapleton), we fail the city.”
Forest City’s 2001 agreement with the city contains these affordable housing requirements:
- 10 percent of all for-sale residential units shall be “affordable”.
- Of rental units, a minimum of 20 percent shall be affordable and 25 percent of those shall be reserved for very low-income renters.
(Affordability is defined in terms of renters’ or buyers’ income relative to the regional median income—80 percent, 60 percent, etc.)
The agreement states Forest City “will develop or cause to be developed” such housing “at a pace reasonably consistent with the pace of development of market rate housing at Stapleton.” Forest City is donating and setting aside land that it says is sufficient to accommodate the required number of affordable for-sale units and a separate requirement of eight acres for very low income rental units. Forest City also says it is making cash donations for affordable housing as another subsidy.
The Stapleton development agreement assumes that a “public subsidy” will be required to implement affordable housing here. The question is what will that subsidy be beyond Forest City’s land and cash donations, and from whom?
An additional factor in the overall plan for affordable housing at Stapleton is the mix of for-sale vs. rental units. The citizens’ groups believe Forest City is obligated to provide at least one-third of residential units in Stapleton as rentals. Forest City’s 2001 “Stapleton Affordable Housing Plan” states the “parties (Denver, Forest City) have assumed that approximately 8,000 for-sale dwelling units and 4,000 multi-family rental units will be developed at Stapleton upon final build-out.”
Forest City refers to that mix as only a “projection.” CAB and its Housing Diversity Committee believe it is a requirement and cite years of housing reports by Forest City in which housing data is presented in terms of meeting the two-thirds/one-third mix.
CAB has noted three additional reasons for the importance of rental units in Stapleton: first, without a minimum amount of required rental housing, the otherwise agreed-upon goal of 20 per cent affordable rental is meaningless; second, the continuing uncertainty in the condo market, a market sector that has historically provided entry level for-sale housing; and third, the continuing strength of the rental housing market in the region.
CAB members have also expressed concern that deed restrictions on the re-sale of affordable units phase out after 15 years, eventually eroding the supply of affordable housing.
Finally, CAB and SDC have repeatedly expressed that development of affordable units should keep pace with market rate development. Stapleton, which is being built on land formerly owned by the city, should have homes that people from all walks of life in Denver can afford.
As shown by Forest City’s third quarter housing statistics below, both market rate rentals and affordable-for-sale units are at about half of the desired levels.
- 7,325 total residential units built (61% of total build-out of 12,000 dwellings)
- 6,086 total for-sale units (83.1%)
- 289 affordable for-sale units (4.75% of for-sale dwellings)
- 1,239 total rental residential units (16.9%)
- 277 affordable rental units (22.4%) of which 160 are affordable at “very low income” levels (57.76%)
The percentage of affordable rentals exceeds required levels, but it is based on half as many total units as CAB believes should be built by now.
Despite its disagreement with CAB over whether the one-third rental mix is a requirement or a projection, Forest City says the proportion of rental units is increasing with recent projects.
Affordable housing has emerged as a major priority for Mayor Hancock’s administration with efforts such as a new $10 million revolving loan fund and the “3by5” initiative, a commitment to construct at least 600 units per year over five years. Stapleton Foundation CEO Beverly Haddon advised the Housing Diversity Committee in November that “this is the opportune time” to approach the city with its concerns.
Rick Padilla, Denver’s Director of Housing and Neighborhood Development, attended the Housing Diversity Committee meeting on Dec. 10 as a visible presence of the city’s commitment to continue working with Forest City on the Stapleton affordable housing efforts. He promised to explore all financing options and mentioned the possibility of a “pilot project” for Stapleton’s transit oriented development (TOD) site—the large vacant parcel immediately south of the Central Park Boulevard commuter rail station where TOD has long been envisioned. He said he is “very encouraged” by recent discussions he has had with Forest City.
Preliminary ideas for accelerating the pace of affordable housing construction at Stapleton are expected to be presented at the January 28 SDC meeting. While the focus will be on how affordable housing can keep pace with market rate construction, questions are beginning to be raised about what responsibilities for affordable housing Forest City would have under its agreement with the city once it completes its market rate projects.
CAB has said it wants to explore options such as attracting additional affordable housing developers to Stapleton as well as public subsidies through local, state and federal governments.