DENVER — The City of Denver celebrated the groundbreaking of a new affordable housing project on Wednesday.
The Kentro Group and Lexton McDermott broke ground on the Krisana Apartments located on the former Colorado Department of Transportation headquarters site in Denver’s Virginia Village neighborhood. The complex features 151 units of affordable housing.
The groundbreaking comes on the heels of a new ordinance that requires developers who are constructing new projects of 10 or more units to make eight to 12% of the units as affordable housing.
The Krisana project is 100% affordable, but the group plans to add market rate housing on the site in the future, which would then be subject to the new ordinance.
The Apartment Association of metro Denver says new building applications declined by 88% since the Expanding Housing Affordability ordinance took effect on July 1, 2022.
“What it does is it kills investment in new housing,” said Drew Hamrick, spokesman for the Apartment Association of Metro Denver. “It is even greater than I think most of us predicted.”
But the City of Denver says those numbers don’t tell the full story.
“We will not let people distort the story and imply that development has ended in our city,” said At-Large City Councilwoman Robin Kniech.
Kniech says although there was a 191% spike in building applications prior to the ordinance taking effect, new applications are beginning to trickle back in.
“It’s just like rushing to the grocery store before the Super Bowl,” Kniech said. “And then there’s fewer people in the store for the Super Bowl. It doesn’t mean people stopped grocery shopping, it just means they went the day before, right?”
New applications are coming in, according to Kniech.
“We saw 78 permits for new apartment buildings in the city and county of Denver in the six months after our policy went into effect,” she said.
The city believes the policy is appropriate and will eventually help curb Denver’s affordability crisis for those making 60% of the area median income (AMI).
“Because we know the residents of this city are struggling to make ends meet,” Kniech said. “They’re struggling to meet these high housing costs. That’s why we passed this policy.”
Hamrick still believes the policy misses the mark.
“Where we’re off-the-charts low in housing stock is for people making 80 to 100% of AMI,” Hamrick said. “And that’s the working middle — your entry level teachers, policemen, firefighters, nurses — all the people that most agree are really getting pinched by this.”