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
Wood | Jun 6, 2017
Shigeru Ban-designed residential structure poised to become world’s tallest hybrid timber building
The wood, concrete, and glass building will rise approximately 233 feet when finished.
Multifamily Housing | May 25, 2017
Luxury residential tower is newest planned addition to The Star in Frisco
The building will be within walking distance to the Dallas Cowboys World Headquarters.
Multifamily Housing | May 22, 2017
Zaha Hadid Architects residential development takes a page from a classic Bradbury tale
The buildings are on an elevated platform and the surrounding walkways are suspended so as not to disturb the surrounding ecosystems.
Multifamily Housing | May 19, 2017
Above + Beyond: condo tower built atop parking structure
How designers figured out a way to nestle an 18-story condo tower on top of an existing parking structure in Hawaii.
Multifamily Housing | May 17, 2017
Swedish Tower’s 15th floor is reserved for a panoramic garden
C.F. Møller’s design was selected as the winner of a competition organized by Riksbyggen in Västerås.
Mixed-Use | May 17, 2017
The Lincoln Common development has begun construction in Chicago’s Lincoln Park
The mixed-use project will provide new apartments, condos, a senior living facility, and retail space.
High-rise Construction | May 15, 2017
Construction begins on 47-story luxury tower in Chicago’s South Loop
The glass tower is being built at 1326 S. Michigan Avenue.
Multifamily Housing | May 10, 2017
May 2017 National Apartment Report
Median one-bedroom rent rose to $1,012 in April, the highest it has been since January.
Multifamily Housing | May 10, 2017
Triple Treat: Developer transforms mid-rise into unique live-work lofts
Novus Residences’ revolutionary e-lofts concept offers tenants a tempting trio of options—‘live,’ ‘live-work,’ or ‘work’—all on the same floor.
Multifamily Housing | May 3, 2017
Silicon Valley’s high-tech oasis
An award-winning rental complex takes its design cues from its historic location in Silicon Valley.