A chart of where populations are facing significant rental cost burdens already in the greater Denver metro area. (Tari Ensign)

A chart of where populations are facing significant rental cost burdens already in the greater Denver metro area. (Tari Ensign)

With Denver’s population expanding from about 470,000 in 1990 to 700,000 today, many longtime residents in some gentrifying neighborhoods find it difficult to remain as rents, home prices, and property taxes climb. How do communities in other U.S. cities provide for both lower-income families and local culture while being revitalized?

“Gentrification is something that you should want if you live in a neighborhood without services because it means bringing in needed infrastructure,” says Egbert Perry, chairman and CEO of the Atlanta-based Integral Group, made up of for-profit developers of 50-plus mixed-income, mixed-financed projects in nine states. “But we need public officials and others to put some [limits] around revitalization so gentrification doesn’t become pure market [forces] driving out longstanding residents.”

Perry cofounded Integral 25 years ago to build mixed-income communities. In the mid-1990s, Integral partnered with the Atlanta Housing Authority to develop Centennial Place, the first HOPE VI project, which redeveloped public housing into a mixed-use community with mixed incomes and rental and for-sale homes. Integral develops housing priced from affordable to market-rate, he says, but is “heavily skewed” to providing workforce housing for residents earning from 60 to 140 percent of area median income (AMI).

“We build a product that is responsive to the market with quality, making sure the project fits so it doesn’t devalue the real estate,” Perry says. “Location does matter.” The firm is building the only affordable mixed-income housing so far in the $2 billion Denver Union Station neighborhood, the 108-unit Ashley Union Station, with 72 percent of apartments reserved as affordable for households earning up to 60 percent of AMI.

Egbert Perry left, chairman and CEO of the Integral Group, and Michael Leccese, ULI Colorado executive director, speaking at an event in Denver.

Egbert Perry, left, chairman and CEO of the Integral Group, and Michael Leccese, ULI Colorado executive director, speaking at an event in Denver. (Tari Ensign)

Among the lessons learned about trying to avoid displacement with revitalization is “one size does not fit all,” says Perry. If a city owns land and is losing its workforce, that land should be developed for workforce housing, and “unless you’re going to invest heavily in quality-of-life infrastructure, don’t compound the problem by putting [lower-income] affordability there.

“The good news is millennials,” Perry notes. What’s promising about millennials and equity, he says, is their openness to mixed-income living, walkability, and other elements that “we’ve tried to engineer as planners—the essential elements of an interactive and socially healthy community.”

Panelists presented Denver projects and approaches that address equity in economically transitioning neighborhoods with longstanding cultures, including land trusts, affordable housing preservation, and development of new mixed-income housing and community services.

The nonprofit Urban Land Conservancy (ULC) has invested in 28 land acquisition deals in Denver and adjacent cities, buying land that developers build on with 99-year ground leases, explains Aaron Miripol, ULC’s president and CEO. Located near transit, the land trust purchases provide stable ground for affordable housing preservation, development of new affordable homes, and development of public and nonprofit facilities that serve the community. For example, a two-plus-acre ULC site near the Sheridan transit-rail station in west Denver was redeveloped for the Jody Apartments, a project with 62 permanently affordable homes.

“Owning and controlling the land for the long term and for public benefit [are] key to ensuring that whatever gets built provides a community benefit,” Miripol says. “The ground lease can be challenging for financing, but when a lender says, ‘Why should we do this?’ we say we’re there for the long term. It’s a positive, not a negative.”

Another big challenge is a lack of time to get to know a neighborhood before planning and development begins. “A thorough process to fully understand the neighborhood—its history, culture, values, hopes, and fears—can take literally years,” he says.

Asked what kinds of incentives besides money would motivate development of more affordable housing, Miripol says that “the ability to up-zone” was important. One ULC project ended up also being quite financially rewarding, he adds, as the “land appreciated greatly because we could go up.”

“Our work plan is driven by community priorities, and housing value and displacement are at the top of the list,” says Renee Martinez-Stone, director of the West Denver Renaissance Collaborative, a collective impact initiative launched in January 2016 by the city and county of Denver, the Denver Housing Authority, and Enterprise Community Partners. The collaborative works to achieve equitable outcomes in ten revitalizing neighborhoods in west Denver, an area with many working-class Latino households and a high rate of homeownership, in which some home values have doubled near new transit stations.

“When you have involuntary displacement, you have gentrification,” she says. “Let’s not fool ourselves on what’s voluntary and involuntary. You might say that residents may sell their homes at a profit, and that’s voluntary, but a lot of these homeowners don’t know their options and may not know refinancing opportunities.”

Martinez-Stone says that extensive public outreach has changed perceptions about what revitalization might look like in neighborhoods where 90 percent of parcels are single-family detached homes. “We thought they needed [more] multifamily, but that’s not within the culture.” So, the collaborative is exploring multifamily building preservation and options to help homeowners stay in their homes, such as using home equity to build accessory rental apartments or tandem houses on their lots.

Several years ago, Zeppelin Development, a longtime Denver landowner and developer of the Taxi mixed-use community in Denver’s River North (RiNo) neighborhood, began talking with residents about what was needed to make a true community in the rapidly redeveloping post-industrial area, says Chris Woldum, Zeppelin’s vice president of finance and development. The answer was Freight Residences, an apartment building opened in 2016 for growing families who were priced out of the urban core’s single-family market. “As long-term holders, we thought it might be harder to lease up,” Woldum says. But the firm found the 48-unit project, with mostly two-, three-, and four-bedroom apartments, was fully leased within three months—far shorter than the market norm.

Also on the Taxi campus, Zeppelin is building Redacted, a multifamily building with 314 apartments which will be affordable for renters such as service-industry workers who earn less than 60 percent of AMI. The project’s one- and two-bedroom units are modestly sized, but designed with plentiful light, air, views, and custom elements not typical for multifamily units, says Woldum. He says that adding affordable units to Taxi was appealing to many of the 150 businesses located there. “They want to be aligned with us because we’ve made this choice.”

“These projects are very much local, and it’s mission-driven work,” says Shannon Cox-Baker, principal of SCB Consulting in Boulder, part of a team redeveloping a six-acre (2.4 ha) site in Denver’s Elyria Swansea neighborhood, near the future National Western Center transit station. ULC purchased the site and selected Zócalo Community Development, with assistance from the city of Denver, to develop the $200 million Race Street transit-oriented development. The project includes 560 mixed-income rental and for-sale homes and 80,000 square feet (7,400 sq m) of community-serving commercial space, according to ULC. The first phase of construction is scheduled to open with the North Metro Rail Line in late 2018.

ULI Colorado is developing a report, due out this spring, on best practices related to revitalizing without causing gentrification or displacement.

Kathleen McCormick, principal of Fountainhead Communications in Boulder, Colorado, writes frequently about healthy, resilient, and sustainable communities.

ULI Colorado Report:  Overcoming Barriers to More Affordable Housing