Guest column: Apartment developments reap rewards

Highlights:

  • Guest column by Kim Duty.
  • Duty lives in West Highland, blocks from 2 planned apartment communities.
  • She argues that well-built apartments are good for neighborhoods, society and nearby homeowners.

By Kim Duty

Special to InsideRealEstateNews.com

Kim Duty, an apartment expert, says the development of high-end apartments brings many rewards.

Kim Duty, an apartment expert, says the development of high-end apartments brings many rewards.

As construction cranes become the norm in Denver, the question of how and where Denver should develop has become a hot and often heated topic — at least in my neighborhood of West Highland.

The issue hits close to home in ways that I possibly give me a unique perspective on it.

I have spent the past 16-plus  years leading the communications department of the leading apartment industry trade association—the National Multifamily Housing Council and its public relations campaign www.WeAreApartments.org.

In that capacity, I’ve spent considerable time and energy creating tools and research that helps counteract the many myths associated with compact development in general and apartment development in particular.

It’s work I believe in because I do believe that compact development is the only environmentally sustainable way to accommodate the population growth our country is facing.

But I’m also a local homeowner whose family has invested its life savings in a house two blocks for a hotly contested apartment development in one direction and a recently proposed second development a block and a half in the other direction.

 In other words, I find myself in the unusual situation of actually now putting my money where my mouth has been for nearly two decades.

Trammell Crow Residential plans this $80 million, 336-unit apartment community at West 38th Avenue and Lowell Boulevard, one of the bookend apartment developments near Kim Duty's home.

Trammell Crow Residential plans this $80 million, 336-unit apartment community at West 38th Avenue and Lowell Boulevard, one of the bookend apartment developments near Kim Duty’s home.

My husband summed it up when he asked one night, “you’re right, right?”  This really won’t hurt our property values?”

Without hesitation, I assured him that both of these apartment developments were good for our neighborhood and our city, great for the small businesses we know struggle to compete with online and big box retailers and, ultimately, yes, they would increase our property values.

In fact, research shows that property values in walkable neighborhoods have outperformed those in suburban developments because our housing preferences have changed.

One local example: In 1996, property values in the upscale, master-planned community of Highlands Ranch were 21 percent more than housing in Highland.  Today, Highland has a 67 percent price premium over Highlands Ranch.

I believe there is a fundamental flaw in some of the arguments I’ve followed or participated in over these new apartment developments and that is the idea that we even have an option of freezing our community the way it is now.

The U.S. is in the midst of a population explosion.

By 2030, there will be 94 million more people in the U.S. than there were in 2000.  All of those people need somewhere to live.

But we don’t just need more housing; we need a different kind of housing.

Nearly 90 percent of our future household growth will not have children.

More and more of today’s households are looking for compact, walkable neighborhoods, not traditional sprawling developments.

And more want to rent than you think.

Rental demand is at historic levels across the country, and it isn’t, as many think, just because of the recent foreclosure crisis.

The truth is the growth in rental demand precedes the housing crisis.

Going back 10 years, before the recession and during the ownership bubble, there were eight million new renter households and just 500,000 new owner households.

Lifestyles and demographics are leading to powerful changes in our housing dynamics.

This planned 3-building, 148-unit apartment building at West 32nd and Lowell is blocks from Kim Duty's home.

This planned 3-building, 148-unit apartment building at West 32nd and Lowell is blocks from Kim Duty’s home.

As a country, and as a community, we are going to have to get comfortable with the idea of more compact, mixed-use and more flexible housing options because that’s what a lot of our citizens want.

I understand that to many people, ‘density’ is a four-letter word.

They associate it with crime and traffic and a host of other urban problems. But the problems associated with density are not caused by density per se.They are the result of poorly designed development.

Any discussion of our future growth patterns should be based on facts and not fears so it’s worth briefly exploring some of the common misperceptions associated with density.

The following is based on a publication produced by NMHC (my employer) and the Urban Land Institute titled Myths of Higher-Density Development.  (Interestingly, this work was an extension of a comparable project initiated by the Sierra Club – strange bedfellows indeed.)

 Myth #1

Higher-density development overburdens public schools and other public services and requires more infrastructure support systems.

 Fact #1

Single-Family Owners Have Three Times as Many School Children-– 64 children for every 100 new owner-occupied single-family houses compared to just 21 for every 100 new apartments, and just 12 for every 100 apartments in mid- and high-rise buildings (more than four stories). Moreover, the compact nature of higher-density development requires less extensive infrastructure to support it.

Myth #2

Higher-density development creates more regional traffic congestion and parking problems than low-density development.

Fact #2

Higher-density development generates less traffic than low-density development per unit. Apartment residents average one motor vehicle per household, while owner-occupied houses average two vehicles, and apartment households generate 30 to 40 percent fewer vehicle trips than single-family units.

Myth #3

Higher-density developments lower property values in surrounding areas.

 Fact #3

See the note above about the difference in property values between Highland and Highlands Ranch. But there is a host of other research that makes the same point about properties retaining or increasing their values when apartments are built nearby.

Myth #4: Apartment residents don’t pay for the services they use because they don’t pay property taxes.

 Fact #4

Apartment residents pay property taxes via rent, and often at a higher commercial tax rate. When you consider the fact that apartment residents have fewer school-age children and place less demand on area roads, it appears apartment residents are actually subsidizing their single-family neighbors and not vice versa.

Myth #5

Higher-density development is environmentally more destructive than lower-density development.

Fact #5

Low-density development increases air and water pollution and destroys natural areas by paving and urbanizing greater swaths of land.

This not to say that everyone should sell their house and move into apartments, it’s just to point out that there are lots of reasons to encourage more compact development, even if you personally want to live in a single-family house.

Well-designed compact development that includes apartments can:

  • Help manage city and state budgets.

It’s expensive to extend water, sewer, electrical, highway, police, and fire protection farther and farther away.

According to the U.S. Department of Housing and Urban Development, the total cost to a jurisdiction to support a detached, large lot house (includes libraries, parks, fire, police, schools, roads, drainage, water and wastewater), is $13,470. That drops to $8,640 for a detached, more compact house, and to $6,405 for an apartment or condominium.

Smart Growth America has extensive research on the benefits of smart growth on municipal budgets.  Another study is here.

  • Fuel the local economy and attract the “best of the best” to our city.

In the past, workers followed jobs. Now though, jobs follow the workers and today’s cities are competing for young knowledge workers, affluent professionals and the “creative class – entrepreneurs and artists.”

These groups tend to prefer high quality urban living. Our great lifestyle has made Denver a premier destination for the workers firms want.

We’ve seen it in the firms relocating their headquarters to Denver in recent years.

All of that economic development is fueling our tax base, supporting our economy and helping support the state-of-the-art transportation and other infrastructure changes city leaders are undertaking to make this a world class city.

We can’t have all that without creating housing for these new residents.

  • Boost our prosperity.

Harvard professor Ed Glaeser has an extensive body of work documenting the benefits of density, including the fact that wages and productivity rise with density.

Here is another researcher discussing the productivity and wage gains created by density.  Economists studying cities routinely find that after controlling for other variables, workers in denser places earn higher wages and are more productive. Some studies suggest that doubling density raises productivity by around six percent while others peg the impact at up to 28 percent.

  • Reduce traffic by creating walkable neighborhoods and providing the critical mass needed for public transportation.

Here is one study and another study discussing the connection between density and decreasing vehicle miles traveled (which reduces traffic).  The reason dense neighborhoods matter is because most car trips aren’t commutes downtown.  People drive millions of miles to buy groceries, go out to eat and pick up their children from school.  When we create neighborhoods, such as West Highland, where they can do much of that without getting in the car, we reduce traffic.

  • Preserve space for parks and outdoor recreation.

In this article Glaeser discusses how tall buildings are greener than sprawl, and they foster social capital and creativity.

I could go on…compact development can improve quality of life by creating vibrant pedestrian-friendly neighborhoods with shopping and entertainment. It can support small businesses.  It can create more affordable housing options that allow our children to stay in the neighborhoods where they grew up.

And even though neither of the projects being proposed on my block are affordable housing per se, here is information on why they also will positively affect more affordable renters.

In today’s knowledge-based economy, the communities that are the most successful in attracting and retaining talented, educated workers are those that focus on creating vibrant, dense live-work-play environments just like West Highland, LoDo, Cherry Creek,and others.

As one economist put it: “Density can generate more diverse neighborhoods and a higher quality of life, giving communities that support it a competitive edge.”

Or to quote another: “How a region grows physically effects how it grows economically.”

In other words, residents are not protecting their communities by opposing higher-density development.  They are actually limiting its future potential by discouraging desirable households from moving in.

Density, compact development, walkable neighborhoods, whatever you want to call them, they are change for the better as long as we as engaged citizens ensure it is well designed and professionally operated.  Both sponsors of the West Highland properties (Alliance Residential and Trammell Crow Residential) have excellent reputations.

So now when people ask me if I’m concerned about the apartments bookending my housing, I’ll tell them that I’m not.

I know I will enjoy the new restaurants and shops they’ll attract, I’ll cheer the existing businesses as they succeed beyond what they ever expected.

I’ll know that our embrace of growth is indirectly supporting the jobs of many of my neighbors whose companies might otherwise leave Denver if we were to take a no-growth attitude.

It’s an exciting time to live in Denver as we do truly become a world-class city.

Interested in buying a home in West Highland? Please visit COhomefinder.com.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by Universal Lending, Land Title Guarantee Co. and 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.

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John Rebchook

John Rebchook has more than 30 years of experience in writing and communications. As the Real Estate Editor for the Rocky Mountain News, he wrote about residential and commercial real estate for 26 years. He has won numerous awards for business stories and columns that he wrote, both as an individual and part of teams. In addition to real estate, he also covered economic development, banking and financing, the airlines, and cable TV for the Rocky. In addition, he was one of the original freelance writers for GlobeSt.com, covering commercial real estate for the Internet publication.

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