Loan Officer | NMLS #320998
Branch NMLS #1646074
Posted On October 24, 2018
Denver is one of the most heated housing markets in the nation, consistently leading the Case-Shiller home price index with double digit rates of annual appreciation. In 2016, over 1,000 families were reportedly moving to Denver every month. Such a sustained influx of residents has put a crunch on available housing inventory. As a result, the West Denver Renaissance Collaborative has proposed a new plan that creates more places to live without building more homes. Through the initiative, homeowners become landlords by renting out detached units on their property known as accessory dwelling units (ADUs) or sometimes “granny flats.”
Late last year, Fannie Mae put out a call for solutions to the lack of available affordable housing around the country. Many firms, like the West Denver Renaissance Collaborative, sent proposals involving ADUs. Maria Evans, vice president of Fannie Mae’s Sustainable Communities Partnership & Innovation Initiative found West Denver Renaissance Collaborative’s proposal to be “much more comprehensive and streamlined” than other ADU-related solutions.
The West Denver Renaissance Collaborative is partnering with like-minded organizations like Habitat for Humanity to build affordable, prefabricated ADUs that are already preapproved by city officials. Through the initiative, homeowners will also have more access to construction loans to finance building projects and training services to learn how to manage the property and act as the landlord.
From 2011 to 2016, the average monthly rent in Denver increased from $941 to $1,376, a 46% increase. Long-term residents are dealing with rampant gentrification and many are facing the tough decision to relocate as the rental rates skyrocket. Even those who own their home are feeling the hurt from rising property taxes. The ADU solution allows long-term residents to stay put, earn some extra income to offset rising costs, and also provide affordable housing for new or displaced residents.
"It could be a good source of income for someone who might not otherwise be able to increase their income," said Jeff Martinez, president of Brothers Redevelopment. "ADUs absolutely would fill a need in Denver."