Why one US city is paying for lower-income tenants to live in luxury buildings

Denver has introduced a pay-what-you can program

New York /
Jan.January 09, 2018 12:10 PM

Downtown Denver (Credit: Larry Johnson via Flickr)

To deal with a shortage in affordable housing, Denver is trying out a pay-what-you-can program for some tenants.

Under the program, the city will pay the difference between what lower income tenants — like teachers, hotel workers, medical technicians and food service workers — can afford to pay and the market-rate rent, the Wall Street Journal reported. The program, dubbed Lower Income Voucher Equity program, or LIVE Denver, will be open to individuals making between $23,500 to $47,000 a year and families of four with household incomes of $33,500 to $67,000.

To start, the city already has enough money to pay for 400 units. Officials expect to pay $500 a month for a single person and $900 per family. Qualifying tenants will receive subsidies for two years.

“This is not a welfare program or anything like that. This is people who are working at hospitals, hotels and food service,” developer Mike Zoellner, who helped create the program told the Journal. “We want them in our community and we want them in our building.”

Since 2015, 12,000 new apartments have been built in Denver and another 22,000 are under construction, according to CoStar Group. Of those apartments, 90 percent are considered luxury units.

A housing expert told the Journal that there are risks in not allowing the market to take shape naturally.

“What you would hope is that excess supply leads to lower rents. If the city is pumping subsidies in, aren’t they going to be propping up the upper end of the market?” said Chris Herbert, managing director of Harvard University’s Joint Center for Housing Studies.

In New York, Mayor Bill de Blasio has also been exploring ways to increase the city’s affordable housing count. His administration has recently floated a few new ideas, including building tiny houses and encouraging development of city- and privately-owned vacant land. [WSJ] — Kathryn Brenzel


Related Articles

arrow_forward_ios
A rendering of 165 Broome Street (Credit: Handel Architects)
Nonprofit plans affordable housing development near Essex Crossing
Nonprofit plans affordable housing development near Essex Crossing
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
All Falls Down: Kanye West’s “Star Wars”-themed affordable housing plan hits snag
The average price of a London home rose above 500,000 pounds, or roughly $685,000, for the first time. (Getty)
London home prices hit new high
London home prices hit new high
Risa Heller and Jonathan Rosen launched NY Forever earlier this week. (Risa Heller, Berlin Rosen)
Civic boosterism gets big backing from real estate
Civic boosterism gets big backing from real estate
Lewis Road Residential Planned Development (Pine Barrens, iStock)
Big golf, resi project in East Quogue approved
Big golf, resi project in East Quogue approved
(Illustration by The Real Deal)
Americans bought 5.6M homes last year — the most since the bubble
Americans bought 5.6M homes last year — the most since the bubble
Randy Mastro and 21 East 83rd Street (Photos via Getty; Google Maps)
Former deputy mayor Randy Mastro, lawyer in Lucerne controversy, lists UES home
Former deputy mayor Randy Mastro, lawyer in Lucerne controversy, lists UES home
From left: BSA chairwoman Margery Perlmutter, DRAW Brooklyn founder Alexandros Washburn, New York City Council Member Carlos Menchaca with renderings of the project (Photos via the City of New York, LinkedIn and Arquitectonica)
How a Red Hook developer circumvented the City Council
How a Red Hook developer circumvented the City Council
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...