Areas of Change, not Stability, getting most growth

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Highlights:

  • Developments in Areas of Stability and Areas of Change quantified.
  • More than 5 times the development is occurring in Areas of Change.
  • Blueprint Denver update kicks off this winter.
Snapshot showing most development in Denver taking place in Areas of Growth, not Areas of Stability.

Snapshot showing most development in Denver taking place in Areas of Growth, not Areas of Stability.

There may be a perception that “Areas of Stability,” that is, established neighborhoods, are under attack by unwanted development in Denver.

However, an analysis by the Denver Community Planning and Development shows the vast majority of development in the city is taking place in “Areas of Change,” not in “Areas of Stability.”

The analysis, ordered by Brad Buchanan, CPD’s executive director, found that in 2014 investments in Areas of Change outnumbered investments in Areas of Stability by a 5.2 to 1 ratio, based on residential and commercial building permits issued.

Areas of Change experienced $56,413 per acre as far as investments, based on commercial and residential permit valuations.

Areas of Stability, meanwhile, saw only an investment of $10,878 per acre.

In 2013, the ratio was 6.5 to 1 as far as more activity taking place in Areas of Change than in Areas of Stability.

“About 80 percent of our city is in an Area of Stability, yet development is taking place by a 5 to 1 or 6 to 1 margin in Areas of Change,” Buchanan said.

The research also found that rezonings are rare.

Last year, only 34 of 175,000 parcels in the city were rezoned. In other words, only 0.019 percent of the parcels in Denver saw their zoning status change last year.

Neighbors increasingly fight developments

Still, there is no denying that neighbors increasingly are rallying in opposition to developments in area of predominately single-family, detached homes.

Those neighborhoods often are mostly Areas of Stability.

The sheer amount of development may be one driving force, according to Buchanan and others.

Development activity in 2010 was a fraction of in 2014, but most the activity took place in Areas of Growth.

Development activity in 2010 was a fraction of in 2014, but most the activity took place in Areas of Growth.

“Coming out of the recession, there has been substantial investments in Denver, at a pace that is more than we have seen in the past,” Buchanan said.

“Every city changes and evolves,” Buchanan said.

“Some folks like a lot of change and some folks do not want to see any change. I suspect most people are somewhat in the middle.”

He noted that Denver is the fastest growing city in the West and that is a trend that is almost certainly going to continue.

“We have added more than 100,000 to our population in the last six years,” Buchanan said. The city is on track to add another 100,000 people, or more, in the next decade, he said.

“Various studies have said Denver is the No. 1 destination for Millennials in the country,” Buchanan said. “People are moving here because of our strong economy and lifestyle. We have to find a way to accommodate them.”

“Breakneck speed” of development alarming 

Chris Waggett, a developer building sustainable buildings in Areas of Change, said many people are against development per se, and are not focused that most of it happening in Areas of Change.

“I don’t think the average citizen differentiates between development taking place in Areas of Change or in Areas of Stability,” said Waggett, principal of D4 Urban.

“Average citizens simply see change taking place at breakneck speed and that has led to a bit of a backlash,” Waggett said.

“You can see that in our election, with a number of anti-development candidates and the complacency in not adopting SB-177,” which would have addressed construction defect litigation at the state level, according to Waggett.

Waggett and many others believe that if construction defect rules were reformed, more affordable condos would be built in the Denver area.

Waggett, whose company, among other things, is developing a sustainable rental community near Alameda Station, near Broadway and I-25, an Area of Change, called the Denizen, said he thinks public officials, at both the city and state level, have done a poor job of communicating the benefits of development.

he 2-building, 275-unit. Platinum-LEED certified Denizen, is under construction in an Area of Change near Alameda Station. The first building opens in July.

The 2-building, 275-unit. Platinum-LEED certified Denizen, is under construction in an Area of Change near Alameda Station. The first building opens in July.

“Development brings short-term pain, but long-term benefits,” Waggett said.

He also said it is an unfair assumption that neighborhoods are “under attack” by developers.

“I would not agree with those choice of words at all,” Waggett said. “I have never heard any developer use that kind of language and those words are certainly not in my lexicon.”

Waggett said that he never thought of quantifying whether growth took place in Areas of Stability or Areas of Growth.

“That’s interesting,” Waggett said.

However, it makes sense that development would primarily take place in Areas of Growth, he said.

Most developments require financing, and lenders want to back projects that will succeed and provide the best returns.

“You can probably achieve the required returns within a reasonable time frame in areas where you do not face community opposition and where you may even be welcomed, as your development could be the catalyst for other positive changes,” Waggett said.

Blueprint Denver guiding plan

Buchanan said the roots for today’s development patterns were planted two decades ago.

“I think people can take some comfort, is that some really smart folks 20 years ago, saw this day coming,” said Buchanan, who was an architect in the private sector and the chairman of the Denver Planning Board, before Mayor Michael B. Hancock appointed him as head of DCPD in early 2014.

Those conversations in the city led to the creation of Blueprint Denver in 2002, which is a guiding document for land use and transportation, Buchanan said.

The Denver Housing Authority developed Mariposa Phase IV in an Area of Change in the Alma/Lincoln Park neighborhood.

The Denver Housing Authority developed Mariposa Phase IV in an Area of Change in the Alma/Lincoln Park neighborhood.

Blueprint Denver divided the city into Areas of Change and Areas of Stability, with the vast majority of it being in Areas of Stability.

The goal is to maintain the character of Areas of Stability, while still allowing some new development and redevelopment to maintain their vitality.

In other words, development is expected in Areas of Stability.

“An “Area of Stability”… (doesn’t) mean that it is dipped in amber to be exactly preserved as it was in 2001,” former Denver City Planner Dick Farley recently wrote in a guest column in DenverRealEstateWatch.com.

At the same time, Blueprint Denver called for the majority of new development to be directed in Areas of Change. Blueprint Denver defines those as areas that would benefit from increased population and economic activity.

Areas of Change include downtown, Lowry, Stapleton, the Gateway area near Denver International Airport, and areas around transit stations, such as near Interstate 25 and Broadway.

Yet, it is the developments in Areas of Stability that have grabbed headlines.

Buchanan, as an architect at RNL,  before he joined the city, was even involved in one development in West Highland, which led to an unsuccessful lawsuit by 10 neighbors to change the zoning that allowed five-story buildings.

The neighbors argued in the court battle that as an “Area of Stability,” the buildings should not be allowed.

Ambrose: Too much development in Areas of Stability

Larry Ambrose, who ran as a write-in candidate for mayor of Denver in the most recent election and is president of Inter-Neighborhood Cooperation, an umbrella group for about 100 Registered Neighborhood Organizations, is neither swayed nor impressed by CPD’s analysis of growth largely taking place in Areas of Change.

“While (development in Areas of Change) is the right thing to happen, I think there have been tremendous changes in Areas of Stability,” Ambrose said. “And I think that is more changes than what I think most people thought would take place.”

“So Brad Buchanan may be right,” Ambrose said. “But so what?”

He pointed to Rafael Espinoza’s landslide victory over District 1 City Councilwoman Susan Shepherd, as proof that voters think the city is too accommodating to developers in established neighborhoods.

Espinoza won every precinct in District 1. Shepherd’s loss marked the first time in 36 years that an incumbent had been defeated in northwest Denver. Development was the single biggest issue in the contest.

Buchanan acknowledges development concerns are real

Buchanan said he did not know what to expect when he ordered the analysis.

“We just knew this was an important metric to track,” Buchanan said.

However, he does not downplay that development does take place in Areas of Stability and a growing number of neighbors are opposed to it.

“I think that these numbers in no way are going to dismiss the experience people have in their neighborhoods, dealing with things like increased traffic or the fact that our city is changing,” Buchanan said.

“Their concerns and experiences are very real,” Buchanan said.

Winter is coming…and changes to Blueprint Denver

This winter, Buchanan said, Denver Community and Planning will be updating Blueprint Denver.

He will be seeking input from as many people as possible, including neighbors, Registered Neighborhood Organizations, and other stakeholders.

“Starting this winter, we will have a series of community conversations about what the best practices have been in other cities,” Buchanan said.

The city also will be bringing in some “nationally renowned people to talk about how other places have successfully dealt with growth and planning issues,” he said.

The city, he said, will be tapping groups such as the Urban Land Institute, the American Institute of Architects and the Rocky Mountain Land Institute to find experts.

Buchanan said he wants to make the process as open, transparent and inclusive as possible.

For people who cannot attend meetings, for example, he wants to make it easy for them to participate in the discussion. That could include voting on issues by texting or telephone, for example.

Updating Blueprint Denver is something that Ambrose agrees is needed.

“Good,” Ambrose said, when told about it by Denver Real Estate Watch.

“It is the right thing to do.”

Interested in buying a home in Denver? Please visit COhomefinder.com to learn what is available.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. DenverRealEstateWatch.com is sponsored by 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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