If you are a real estate investor in Denver, you could be responsible for footing the bill for the area’s lack of affordable housing.
Members that are part of the Denver Safety, Housing, Education, and Homelessness Committee recently met to discuss and outline a plan that would assist in bringing more affordable housing units to Denver and the surrounding areas.
The initiative has a desire to bring in approximately 6,000 homes with low rents to the Denver area over the course of the next 10 years.
While this plan would resolve the currently occurring housing crisis, it would incur costs of – at least – $150 million.
The members of the committee discussed various methods on how these costs could be met. One of the more realistic options discussed would be adding a new development fee and half of a property tax mill, starting as early as January 1st of 2017.
While no one likes to be subjected to increased taxes, the property tax portion of the proposal would cost most homeowners in the area approximately $12.00 each year. The development portion of the fee would be imposed once on new constructions in the area. It would have a range of $.40 per square foot for industrial-based constructions and $1.70 per square foot on commercial developments -such as retail venues and hotels.
Single family home construction would incur a fee of about $.60 per square foot and multi-family new construction would be seeing fees in the amount of $1.50 per square foot.
It is absolutely vital for property owners to be aware of these proposals and the initiatives pertaining to affordable housing, as you will – more than likely – be impacted, in one way or the other.
Many real estate professionals will see this as a low cost to pay to attract more tenants; however, many will see this as an unreasonable fee on an issue that does not directly stem from their actions.
Real Estate professionals in the area are stating that if they are required to pay these fees, they may have to force those costs down onto those that are tenants in their properties. Naturally, this could further detrimentally impact the housing gap that is happening in and around the city.
Approximately 80% of all of the housing in the area is considered to be luxury housing. However, because of the growth that is occurring in the area and the employment opportunities that are presenting themselves in the area, more and more people are seeking a home in and around the area.
For Denver Real Estate Professionals, it’s ideal to make more properties “affordable” so that lower income families have access to those homes. If this proposal gets approved, you will end up paying anyway.
