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Denver’s lack of affordable housing is reaching crisis level.
Teachers, police officers, and health care workers were getting “priced out of a city with a glut of quality housing, something many U.S. communities experience today,” Next City reports.
A group of finance and equity specialists, deal-makers, and policy folks wanted to help.
They created a first-of-its-kind initiative called LIVE Denver (Lower Income Voucher Equity). The program, with $1.2 million in city funding, will bring hundreds of 21,000 brand-new, vacant apartment units within financial reach of severely rent-burdened families.
Will it help solve the affordable housing crisis in Denver and elsewhere?
Affordable Housing and Health
Access to affordable, safe housing is a priority for maintaining good health.
Access to housing protects families from the natural elements, and promotes feelings of security that can reduce stress. Affordable housing located near safe parks, full-service grocery stores, and living-wage employment helps to build community and encourages healthy eating and exercise.
Yet, 50 years after the federal Fair Housing Act banned racial discrimination in lending, Latinos and Blacks continue to be routinely denied conventional mortgage loans more so than Whites.
The disproportionate denials and limited anti-discrimination enforcement help explain why the home-ownership gap between whites and Latinos, which had been shrinking since the 1970s, has exploded since the housing bust.
In addition, less than 20% of apartments are affordable for middle-income Latino renters.
Many renters struggle to pay the rent. More than half of Black and Latino households in major cities across the country are rent-burdened. They spend more than 30% of their incomes on housing. In cities like San Francisco, Latino renters on average have to spend nearly 75% of their income on rent.
Hence, Latinos and Blacks are twice as likely as whites to be affected by the housing crisis.
Denver’s Affordable Housing Crisis
Not the economy. Not crime. Not education.
Housing affordability is Colorado’s biggest issue, according to a Colorado Mesa University poll.
Denver’s shortage of housing will peak at 32,000 apartments and homes during 2018, keeping rent prices high, according to a 2018 report by Shift Research Lab.
The report indicates that Colorado’s housing affordability challenge is based on supply. Demand has outstripped supply for nearly a decade and housing prices have risen in excess of wages, causing housing to become increasingly unaffordable for many Coloradans.
“Under these circumstances, only significant increases in housing supply will stabilize price; incremental reductions in the cost structure of development will accrue to developer profit and do little to ameliorate price pressure,” the report states. “Everyone should care about this affordability challenge. Housing cost-stressed households impact all Coloradans through the negative effects on business, public tax bases, health and education.”
How LIVE Denver Will Help
LIVE Denver is a 2-year pilot program to use a private housing subsidy, with city support, to match disadvantaged families with unrented apartments.
It creates immediate affordable housing options by connecting vacant market rate units with workforce families and individuals. LIVE Denver bridges the gap in contract rent and participant ability to pay through funds provided by the city, foundations and employers.
Renters in the program will pay no more than 35% of their income to rent an apartment in centrally-located neighborhoods close to jobs, schools, and amenities.
In return, renters must work full time, make between 40-80% of the area median income, and take advantage of one-on-one coaching and budgeting support to start building positive credit and saving for the future, writes Celia Smoot of the Local Initiatives Support Corporation.
“The program will even set aside five percent of the monthly rent payments in an account on behalf of the renters to help kick-start those savings,” Smoot wrote.
The program aims to enable its families to eventually buy their own homes.
“The program will also connect workers with growth industries in the city, such as health care and logistics, which are having a hard time finding skilled employees who can afford to live in the vicinity,” Smoot wrote. “With LIVE Denver, everybody wins, including the economy.”
Can This Work Elsewhere?
Smoot thinks it can.
In fact, she said Seattle and San Antonio are examining Denver’s program as a possible solution in those locations.
“We hope, those cities will also harness the solution looking them right in the face,” Smoot wrote. “And more and more Americans will have access to the standard of living everyone deserves.”
Meanwhile, affordable housing advocates are trying new things across the country.
In San Antonio, City Council Member Shirley Gonzales is pushing to revitalize business on the Westside and helping residents find better, more affordable homes to live in. The city also created a task force on affordable housing.
In San Francisco, Sonja Trauss formed a group to push for more affordable housing and challenged opponents to affordable housing. Also in San Francisco, the Mission Economic Development Agency is collaborating with others to foster education and action around below-market-rate apartment options.
Have other ideas to solve affordable housing issues?
Join us in the #SaludTues on August 21, 2018, to tweet about why affordable housing matters for health, and what you can do to create healthier places to live!