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 1^st 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.

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According to a recent study, there are thousands of people in Denver that don’t have access to something most of us take for granted – a “home”.

It’s true that Denver has one of the absolute strongest economies within the country. Despite this fact, thousands are sitting on the brink of losing their current home because of the increase in rents and the prices of homes.

If you’re a real estate investor, real estate agent, or own some property in Denver, you may want to consider placing your focus on providing affordable housing to those that need it. In many instances, it’s better to provide housing at a lower rate than at a higher rate. Bending a little will allow more people will choose your affordable housing – resulting in higher profits, over time.

Housing Numbers in Denver

According to the numbers, the housing prices have risen at least twice the national average. Since the year 2011, rent has increased in Denver at least 50%. Also, based on statistics, there has been a very high surge of new residents to the area. This has averaged about 1,000 people each and every single month.

These figures show that affordable housing is a dire need in Denver. Unfortunately, the federal funding that Denver receives for affordable housing has dropped by at least 1/3 since the year 2010.

When you put all of this together, you can clearly see that the number one priority in Denver IS affordable housing. As a property owner, looking to rent your property, this is an area that you should focus on – starting now.

In an effort to keep Denver accessible to all income levels and to ensure that housing is affordable, several people have come together to make a proposal to the Safety Committee of the City of Denver. The goal of the proposal is to create a permanent and completely dedicated fund designated for affordable housing. The plan calls for the act of generating about $150 million over the course of a decade to produce and to appropriately preserve about 6,000 affordable housing units – including apartments, condos, and homes.

While this plan is likely to be approved in the future, people are in need of affordable housing now.

What You Can Do To Provide Affordable Housing

Consider making your rent more affordable to those that require the assistance to obtain safe housing for their family. For example, if you have an apartment complex where you charge high rent, you may want to consider reducing the costs of your upper-level apartments. This may result in an initial financial loss, but, over time, you will find that you make more money because the tenants are able to afford those upper-level apartments.

There are many ways you may reduce rents. No one in the market really wants to do that; however, by having high rental fees, you are more likely to suffer loss as people continue to experience financial hardships.

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