Thirty percent. That’s the traditional metric of housing affordability, which holds that housing should cost no more than 30% of a family’s income. By that measure, about 55% of U.S. neighborhoods would be considered “affordable” for the average household.
When you factor in the cost of transportation, however, the percentage of neighborhoods that the typical family can afford falls to 26%, according to the Center for Neighborhood Technology, a nonprofit research group based in Chicago. Transportation is most household’s second-biggest expense, after housing.
The conundrum is that many lower-income families and individuals can’t afford to live in the more desirable areas served by good public transit. They are forced to choose neighborhoods whose housing they can afford, but which have limited transit service, or none at all. As a result, their housing costs may be 30% or less of total income, but the high cost of commuting to work makes their daily living costs unaffordable.
Transit-oriented developments help address this problem. TODs place housing at or near rail and bus service nodes and routes. This can, in many cases, enable lower-income residents to reduce the cost of their commute to work, making their total housing and transportation budget fall more in line with the traditional affordability metric.
Enterprise Community Loan Fund, an affiliate of the nonprofit Enterprise Community Partners, recently closed three deals that will create 462 renovated or newly constructed apartments in neighborhoods served by Denver’s transit system:
- Crosswinds at Arista, a $1.8 million loan to acquire vacant land in Broomfield, with rapid bus routes to Denver and Boulder. Sponsoring developer Gorman & Company plans to develop 159 one-, two-, and three-bedroom affordable apartments.
- Bonsai Apartments, a $2 million loan to acquire a nursery in Sheridan, 10 miles south of Denver, where Medici Development will build 149 new affordable apartments.
- Johnson & Wales Family Housing, a $5 million loan to acquire two student housing buildings on the former Johnson & Wales University campus. Archway Community Investment plans to turn the dorms into 154 affordable rental units. Buses with frequent rush-hour headways go right to downtown Denver.
The deals were financed through the Denver Regional Transit-Oriented Development Fund. Since 2010, the fund, a partnership among state and local housing agencies, banks, philanthropic institutions, and community development financial institutions (like Enterprise Community Loan Fund), has invested $50 million to renovate or build more than 2,000 affordable homes in the seven-county metro area. (All properties must meet Enterprise Green Communities criteria for the affordable housing sector. ) As loans are repaid, the capital goes toward new acquisitions to increase the supply of affordable homes near transit.
Seems like a pretty good model for other metro areas to adopt, don’t you think?
Related Stories
Multifamily Housing | Mar 28, 2021
Smart home technology 101 for multifamily housing communities
Bulk-services Wi-Fi leads to better connectivity, products, and services to help multifamily developers create greater value for residents–and their own bottom line.
Multifamily Housing | Mar 27, 2021
Designing multifamily housing today for the post-Covid world of tomorrow
The multifamily market has changed dramatically due to the Covid pandemic. Here's how one architecture firm has accommodate their designs to what tenants are now demanding.
Multifamily Housing | Mar 23, 2021
One Hundred Above the Park completes in St. Louis
Studio Gang designed the building.
Multifamily Housing | Mar 22, 2021
Waldorf Astoria Miami will become the tallest tower south of Manhattan
The supertall tower will include a hotel and residences.
Multifamily Housing | Mar 18, 2021
Mixed-use residence for UCLA medical students completes
Lorcan O’Herlihy Architects designed the project.
Multifamily Housing | Mar 15, 2021
First phase of Presidium Waterford breaks ground in Austin, Texas
O’Brien Architects and Dwell Design Studio are designing the project.
Luxury Residential | Mar 10, 2021
Luxury multifamily development opens at the front door of Charlotte’s South End neighborhood
Broadstone Queen City recently opened its doors to its first residents.
Multifamily Housing | Mar 10, 2021
9 smart connectivity systems for multifamily housing communities
Smart connectivity systems are starting to become a must-have amenity in multifamily properties—and not just for upscale urban rentals.
Multifamily Housing | Mar 9, 2021
Investor demand for multifamily real estate remains relatively strong despite COVID-19
Despite a disruptive pandemic, investor demand for multifamily real estate was strong in 2020, according to a newly released Yardi Matrix Bulletin. Around 252,000 apartment units were absorbed last year. That’s about 1.7% of total market stock and down 12% from the 286,300 apartments purchased in 2019.
Multifamily Housing | Mar 7, 2021
Deadline extended for Cover Photo of the next issue of MULTIFAMILY Design+Construction
Request from Editori of Multifamily Design+Construction for photos showing project amenities, for next issue of the magazine.