Denver officials are throwing a lifeline to builders stuck in development limbo due to lags in financing.
The city’s Planning Board voted unanimously Wednesday for a proposal to extend deadlines for hundreds of approved projects that have yet to start construction, the Denver Business Journal reported.
The change, proposed by the Department of Community Planning and Development, would apply to projects approved on or before Dec. 31, 2025, granting three years beyond the current 30-month window. Projects submitted for consideration this year and beyond are still subject to the 30-month time limit.
The move targets a growing backlog of entitled but unbuilt projects, particularly in the multifamily sector.
City officials say 156 approved site plans that have yet to advance to the permitting stage. The developer success rate for multifamily projects, which measures how many projects start construction, is between 14 percent and 22 percent over the past three years, according to the Business Journal. Roughly 23,000 units have been approved but remain unrealized. With a 14 to 22 percent success rate, that means only 3,220 to 5,060 of those units would be delivered.
Market conditions have brought many local developers to their knees. Elevated construction costs, high interest rates and softening rents have made it difficult for builders’ projects to pencil, city staff members said. Denver’s apartment vacancy rate hit a 16-year high at the end of last year, pushing rent concessions to record levels and driving average rents down 4.8 percent year-over-year.
Community Planning and Development officials warn that without city intervention, many projects submitted before the end of last year could expire before developers secure financing, forcing them to restart the entitlement process.
It could be especially costly for projects that predate Denver’s Expanding Housing Affordability ordinance, the law that went into effect in July 2022 that requires developers to either provide affordable units on site or pay in-lieu fees. Developers submitted applications in droves in 2021 and 2022 amid growing rents and low interest rates, the outlet said.
The proposal will go before the Denver City Council for consideration.
— Chris Malone Méndez
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