2016-04-06
Story

Debbie Brady, right, who was homeless from 2008 to 2011, holds up a protest sign during a Denver Homeless Out Loud rally in front of the City and County Building on March 21 in Denver. (Helen H. Richardson/The Denver Post via Getty Images)

By Alan Gottlieb and Kristin Jones

As the Denver metro area booms, with thousands of new people moving in every month, the pace of displacement caused by gentrification is accelerating, causing consternation among low-income residents and organizations that advocate on their behalf.

Sections of the metro area that historically have been havens for those pushed out by gentrification are now themselves gentrifying, our analysis of census and rental data shows. Some of the neighborhoods with the steepest rent increases over the past year are also those where the residents are least able to afford them, including neighborhoods where poverty has grown and where a fifth or more of the population lives under the poverty line.

Montbello, for instance, is a historically black and Latino neighborhood where the poverty rate doubled to 28 percent from 2000 to 2014, according to U.S. Census Bureau data compiled by the Piton Foundation’s Community Facts site, as affordable housing became sparse in the rest of the city. And yet renters there saw their monthly payments increase 18 percent to a median $1,690 over the past year, according to data from the real-estate website Zillow.

In North Aurora, where 23 percent live in poverty, rent increased 17 percent in the past year. In Westwood in southwest Denver, the poverty rate is 37 percent and the rent is up 16 percent. In Denver’s East Colfax neighborhood, where the poverty rate is 39 percent, rent went up 12 percent.

All of these neighborhoods had seen an influx of low-income renters forced to leave other parts of the city, and are now themselves having affordable housing fall out of reach at a fast clip, pushing poor people to the outskirts of the metro area and beyond.

Much of Aurora has already become unaffordable for many families, while unincorporated Adams County is moving in that direction, says Stephen Moore, a senior policy analyst with FRESC, a progressive advocacy organization that works on social and economic issues, and a Trust grantee. “Anything within a mile of a light rail line is going to gentrify, and the closer to Denver, the greater the degree of gentrification.”

Sandra Morales knows this from first-hand experience, as a volunteer for Globeville Elyria Swansea Right to Live Well who helps advocate for affordable housing and renter protections, and more recently as a victim of gentrification herself.

Morales, her husband and three children lived in a small house in the Elyria-Swansea neighborhood of north-central Denver for two and a half years until a series of sudden, steep rent increases forced them out at the end of last year.

Elyria-Swansea has long been a high-poverty area; more than a third of its population lives under the federal poverty line.

Morales’ house there had originally been a small two-bedroom, one-bathroom home, built in 1905. Recently an owner had added walls to convert it to four tiny bedrooms. Despite the small rooms, Morales says her family liked the configuration because her sons, ages 12 and 17, and daughter, who is 14, each had their own room.

The Morales family moved into the house in mid-2013 and paid $750 per month. The rent held steady until last summer, when the landlord started bumping up the rent each month.

“One month it was $80 more, then $100, then $75,” until suddenly the family faced a monthly rent of $1,400, Morales says. The increase in their rent was unusually steep, but many of her neighbors also felt a painful crunch. Median rent in Elyria-Swansea increased 8.9 percent in the past year, according to Zillow data, to $1,485.

Morales hadn’t worked outside the home, and her husband’s annual salary as an electrician was just $28,000, so they knew it was time to move. They found a slightly larger, recently remodeled home in Commerce City. The rent, $1,054 per month, is a bit high. But the family has an option to buy the home at market rate, currently $210,000.

Morales has started cooking food to sell at nonprofit organization events, and hopes with what she brings in and her husband’s salary, they might be able to make a down payment within a couple of years.

She knows this is uncertain at best. Adams County is already showing signs of gentrification, and Morales doesn’t expect the price of the house to remain within reach. Commerce City housing costs are also on a sharp upward trajectory; home values are up 15 percent in the past year, and rent has gone up 6.7 percent, according to Zillow.

Her two youngest children have settled into Commerce City schools, and she has gotten involved in her community, so she’d like to avoid another move anytime soon.

“I have to live with these worries, but I do worry every day,” she says.

Inexorable economic forces are part of the explanation for rapid gentrification and large-scale displacement; a strong economy and a low unemployment rate have brought a massive influx of people to the Denver metro area and depleted its housing inventory. Builders have so far focused on high-margin luxury housing that’s unlikely to do much for low-income renters, according to Zillow senior economist Skylar Olsen.

Home prices in the Denver-Aurora-Lakewood metro area rose 11.4 percent in the year ending February 2016, according to CoreLogic, a company that tracks housing trends. Income in the metro area rose, too, but not nearly as quickly, leading some economists to raise warning flags.

Currently, individual municipalities run their own affordable housing programs. Last year, Denver Mayor Michael Hancock boosted the city’s affordable housing program, in part by launching a $10 million revolving loan fund to create and preserve affordable units. Derek Woodbury, spokesman for the Denver Office of Economic Development, says that from July 2013 to July 2015, a total of 1,458 units were created under a community housing initiative, and an additional 844 units are currently under construction.

“That’s just one element as far as production,” says Woodbury, calling affordable housing “a huge priority” for the city.

But advocates say that local governments could and should be doing more to coordinate efforts to ameliorate the impacts of gentrification.

When it comes to affordable rental housing, “we are so behind as a region,” says Aaron Miripol, president and CEO of the Urban Land Conservancy (ULC), which acquires, develops and preserves real estate in the Denver area for use as affordable housing and by schools and nonprofits. (In 2015, The Trust made a program-related investment to the Calvert Foundation to help underwrite a ULC credit facility.) The metro area “lacks any regional vision, and there are no regional resources,” he says.

Miripol says the Denver metro area currently has 58,000 affordable rental units, but needs 60,000 more to meet demand. In Denver proper, there’s a 30,000 affordable-unit shortage.

A widely accepted definition of manageable rent is that it takes no more than 30 percent of gross household income.

To be considered an affordable unit to a family of modest means—for example, earning 60 percent or less of area median income, or under $40,122 annually—the unit would need to rent for no more than $1,000 per month.

Good luck finding that in Denver. Median rent in Denver in February was $1,945, according to Zillow.

“The shortage of affordable rental units is almost too big to comprehend,” says Dace West, executive director of Mile High Connects, a partnership of public, private and nonprofit organizations working to increase access to housing choices, jobs, good schools and essential services via public transportation.

The acute shortage gives landlords an upper hand, and some property owners, like Morales’ landlord, are jacking up rents at a rapid rate, exacerbating the displacement problem, West says.

“We hear so many stories about landlords raising rents by $200 or $300 with no notice.” This can happen multiple times at the same property, until renters are forced out, adds West: “Not only affordable housing protection but renter protection as well are huge emergent issues.”

As the forces of gentrification radiate outward from their Denver nucleus, where are people moving?

“It’s hard to track because people pick up and leave so quickly,” FRESC’s Moore says.

Interviews with a half-dozen experts and advocates suggest that lower-income sections of Adams County are receiving an influx of new, low-income residents. Aurora used to be a popular destination, but there is virtually no rental housing available there anymore.

The Apartment Association of Metro Denver publishes a quarterly apartment vacancy and rent report. The most recent report, from the third quarter of 2015, shows Aurora’s rental vacancy rate to be 3 percent.

Elizabeth Gundlach-Neufeld, deputy executive director of the Aurora Housing Authority, says a vacancy rate of 3 percent might as well be zero. “It just means that at a particular point in time, some people were moving out and someone else is about to move right in,” she says. “It’s probably just two or three days while the unit is being painted and recarpeted.”

Moore says the southern section of Westminster has been one place people could reliably find affordable places to rent or even buy (usually in mobile home parks). As a result, South Westminster has seen its poverty rate jump 29 percent between 2010 and 2014 to total a fifth of the population, according to census data. But with a light rail line that slices through the area opening next year, big rent increases have already started hitting residents.

“There’s beautiful transit-oriented development happening in the area,” Moore says. “New housing, rebuilt roads, bike lanes, new sidewalks, even a trendy amphitheater. But none of the people living there now are likely to experience any of it.”

Moore says municipalities have done a poor job coordinating efforts or authentically seeking public input.

“Cities have done public engagement processes, in air quotes,” he says. “They do what they need to do to check off a box.”

Other advocates says they have heard of an exodus of low-income people to Brighton, and even farther afield, up toward Weld County and Greeley. Others say some people are abandoning the Front Range altogether and are heading west, to places like Delta and Cañon City. And some families have been forced into homelessness; Denver Public Schools saw a 41 percent jump in homeless students between the 2013-14 and 2014-15 school years.

Jennifer Newcomer, director of research at Gary Community Investments, which includes The Piton Foundation, says gentrification has led to a “shattering of what had historically been” close-knit African American and Latino communities.

Ending racial and socio-economic segregation is a worthwhile goal. But to the extent that gentrification fosters integration, it is often a temporary phenomenon. In northwest Denver’s Highlands neighborhood, for instance, the integration that immediately followed gentrification was short-lived. In 2000, the neighborhood was 67 percent Latino, according to census data. Then, as gentrification progressed, the population was about half Latino. By 2014, it was 66 percent non-Latino white.   

What gentrification has meant, in Denver, is that patterns of segregation are rearranging themselves. As the more affluent move back into the center of the city, low-income people of color are being pushed farther out to the margins.

Correction: This article originally misidentified Sandra Morales as a community organizer for Focus Points Family Resource Center. She is a volunteer for Globeville Elyria Swansea Right to Live Well.

Alan Gottlieb
Writer, editor and consultant
Denver, Colorado