The National Community Reinvestment Coalition (NCRC) just released a report entitled, “Gentrification and Disinvestment 2020.” On the report’s list of “Most Intensely Gentrifying Cities 2013–2017” Denver ranks second (#2), just behind San Francisco & Oakland and before Boston, with 27% of its eligible tracts (neighborhoods) gentrifying during that time period. While the total number of gentrifying neighborhoods in Denver is lower than other cities like New York and Phoenix, which rank 7 and 9, respectively, any number over zero is bad news from the perspective of Urban Land Conservancy and other organizations that work day in and day out to combat displacement and preserve affordability throughout Metro Denver and surrounding areas.
There are many factors that lead to gentrification, including institutionalized redlining, chronic disinvestment, and measures to concentrate impoverished residents—primarily people of color. The NCRC report indicates that Opportunity Zones (OZ), a fairly new designation created by the Tax Cuts and Jobs Act of 2017 allowing for certain investments in lower-income areas to have tax advantages, heavily overlap with displacement. In fact, almost 69% of the neighborhoods identified as gentrifying were either within or adjacent to an OZ. To date, we have seen very few benefits for the residents in these OZ neighborhoods.
When I began at Urban Land Conservancy in 2007, our most urgent need was to neutralize future displacement by purchasing properties along transit corridors in at-risk neighborhoods, or as we like to call it keeping residents “in-placement.” The Great Recession that occurred in 2008/09 was like kerosene on the fire for many of Denver’s already vulnerable neighborhoods with rampant foreclosures leaving communities open to an “investment grab”: the precursor to our receiving the #2 status in the aforementioned report. At that time, ULC, along with other local affordable housing providers, partnered to obtain federal Neighborhood Stabilization Program (NSP) dollars, which resulted in the preservation of several hundred homes in Metro Denver, including the Dahlia Apartments in Northeast Park Hill. NSP was also used for purchasing of land to support the development of future affordable housing. Sadly, the current COVID-19 pandemic is yet another dousing of kerosene enlarging the flame of an already wide gap between the supply (and demand) for affordable housing.
To give you an idea of the numbers in Colorado before the pandemic, there were 157,858 extremely low-income households (household incomes of $20K), but only 43,787 available affordable rental homes, according to the National Low Income Housing Coalition. That means 76 percent of severely housing cost-burdened households are at a high risk of homelessness in Colorado. Conversely, for people living at 100% of the area median income (or with a moderate household income), there is a surplus of 103 units available per 100 needed, showing that the greatest need for housing is for those who are least likely to be able to afford them.
Today, almost all of ULC’s 38 community investments are in neighborhoods that are still listed as vulnerable for displacement. To accomplish our goals, ULC uses our Community Land Trust (CLT) as a means to ensure long term neighborhood stability. We believe, more than ever, this is the best way to ensure that Denver moves off of the list of gentrifying cities. Community land trusts can be used for many types of development, including commercial and rental housing, which ULC provides. Most are used to ensure long-term housing affordability, like Elevation Community Land Trust, a nonprofit that ULC incubated. In all cases, a trust acquires land and maintains ownership of it permanently through long-term land leases, ensuring that properties remain affordable versus being swept up for use at market rates.
ULC has a dedicated pool of loan funds to acquire properties and preserve them for neighborhood stabilization and permanent affordability: The Metro Denver Impact Facility (MDIF), which is supported by First Bank, Colorado Health Foundation, CHFA, Gates Family Foundation, The Denver Foundation, The Colorado Trust, Northern Trust, and Piton Foundation. Although substantial, this funding is not enough to address Colorado’s huge gap in affordable housing, nor is it enough to stave off acquisition of land for uses that will further displace low to moderate-income individuals and families. As we look to address emergency needs during this time of crisis, we need to refer to the notes of our not-too-distant past and awaken to the fact the time is NOW to secure land for long-term affordability. Otherwise, Denver may find itself at the #1 spot on NCRC’s next gentrification report.