The plan, called LIVE Denver, is aimed at workers earning between 40% and 80% of average area incomes …
The Denver metro area has about 16,000 vacant units … But most of those are at the high end–an average of $1,600 a month for a single bedroom. Indeed, that’s how it is in many cities around the country. Occupancy rates remain above 95% on average nationally, with availability tending to be in new, luxury-type stock rather than moderately-priced older buildings. …
Part of the cost of the program is being met by local companies and foundations. The city plans to subsidize about 400 units in all over two years, with about a quarter of those on the books already. It will keep tabs on landlords to make sure they don’t simply raise rents to reflect the extra subsidies available.
The interesting question will be if the city simply ends up propping up the high-end of the market, perversely offering incentives to developers to build new unaffordable homes.
Factoring in sustained municipal rental subsidies to justify high-end development investments is a very bad business plan. There should be no worry of it trending.
The rental subsidies are a nice and unexpected little gift to those condo developers and owners, but “Section 8 subsidies” is not not likely to show up as an income-generation line item in a development pro forma any time soon. If it does, run from that investment like the devil is at your heels. Then see if you qualify as a Section 8 tenant.