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In transition: New apartments stand next to older homes in Jefferson Park. —Photography by Matt Nager

The Two Sides of Denver’s Real Estate Boom

Finding affordable housing in Denver has never been more difficult. This white-hot market is dividing our city—and one student and a young investor are at ground zero of the monumental transformation.

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Late one morning this past spring, after class at Community College of Denver, David Pierre-Bell slings a backpack over one shoulder and walks to the light-rail station near campus in search of a new home. A friend had told him about a promising apartment complex just west of downtown, where the rents might be affordable in this suddenly unaffordable part of the United States. David was skeptical. His search for reasonably priced housing in Denver over the past two years had proven futile, a frustrating exercise that began to chip away at his confidence in his adopted city.

David is 34, small but thickly built. He wears rectangular glasses, and his hair is often pulled into a ponytail. He speaks softly, and you sometimes find yourself leaning in on his words. He favors sneakers, but he owns a suit he keeps tucked away in case of a job interview.

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David, a former surgical technician, studies nursing at CCD, and he plans to send university applications out soon. Without a family—his parents are deceased and he has neither a spouse nor children—he moved to Colorado in 2011 from San Antonio to look for new opportunities. He’d attended college years earlier but dropped out to join the military in 1998; after being discharged, he worked as a $15-an-hour surgical scrub tech at various hospitals. Since enrolling in community college in fall 2013, David has maintained a 3.3 GPA. He pays for his classes through loans, grants, and scholarships and has a little less than $1,000 in the bank. He tutors classmates at the library, and he works part time at CCD’s office of student life, where he earns $9 an hour and his boss considers him “an amazing person,” an honest, hardworking man who is simply trying to better his lot in life.

The sun moves higher in the sky on this Tuesday, and David sweats through his T-shirt. The light-rail train arrives. “Maybe this is the day,” he says and wipes his neck.

On the train, David leans forward in his seat. He’s budgeted $500 a month for an apartment, but he has a few requirements: It has to be a one-bedroom, it has to be clean, and it has to be in a safe neighborhood. He scans rows of rooftops through the window. A few stops from campus, he grabs his backpack and steps off—the apartment complex his friend mentioned is nowhere in sight. “I hope it’s not that one,” he says and points across the street to a strip of sickly green buildings just beyond a dirt lot. David makes his way past the lot and through a series of two-story structures with peeling paint on their facades. The lawn is unkempt and there’s a dilapidated pool. David looks in and recoils. The water is green. “I don’t think this is the place,” he whispers.

Down the street there’s another complex, but no one is in the rental office. Farther away, there’s another rundown property. He walks to the edge of one building. “Oh my God,” he says. “It smells like a horse trailer.” He looks for the rental office but is unable to find it.

After nearly a mile of walking, David is soaked in perspiration. He turns down a street and finally spots a place: It’s a Mayberry-cute complex with well-maintained lawns and a sign out front that reads “Affordable Living.” “OK, OK,” David says cheerfully. “Let’s see how affordable you are.” There’s a beer-can wreath on the apartment manager’s door. David knocks and a woman answers. A one-bedroom is going for $850 a month, he’s told. It doesn’t matter. There aren’t any vacancies.

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He searches for another hour, but nothing turns up. He hops a train back to campus. On the way, he decides to stop and check out one more place.

There’s a complex a few blocks off Federal Boulevard, a series of buildings with a metal fence and a large pool. David drops onto a couch in the waiting area. He can see adults and children splashing in the pool’s crystal water. A tiny woman in chunky shoes exits her office, shakes David’s hand, and offers to show him a one-bedroom apartment. He knows he can’t afford the unit, but David nods, smiles, and hands over his driver’s license.

In the parking lot on the way to the apartment, the woman writes the rent on a floor-plan handout and gives it to David. It says $900.

“There’s a $400 deposit,” the woman tells him.

“OK,” David says.

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“Five dollars a month for trash.”

“Uh-huh.”

“There’s a $150 processing fee.”

“OK.”

“Twenty a month for parking.”

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David and the woman take an elevator up a few floors, then go down a hallway where she opens a door.

“See?” she says. “Nice.”

The living room is spacious and flows into the kitchen, which is hidden just off the foyer. The walls are painted light brown and the entire place has a late ’90s, Tuscan vibe. In the single bedroom in the back, he looks out a window. “It’s $40 more for a city view,” the woman says. Air conditioning costs extra, too. The cheaper units were last remodeled in 2002. David says he’ll give it some thought. The woman says he should hurry, that there are other people interested. Before David can be approved, the woman tells him, he needs to have a salary that can cover three times the annual rent—roughly $32,500.

At the rail station later, David holds the floor plan in his hands. Finding an affordable apartment has never seemed more impossible. As he waits for the train, a few teenagers sit on a bench next to him. One of them plays a hip-hop song loudly over a phone while the other teens nod their heads to the beat. David glares at the group. He’s done. He’ll walk the last mile back to school.

A couple of days later, Nick Steele parks his GMC Sierra near a 109-year-old attached home in Cole, northeast of downtown. He avoids a trash container, steps atop the concrete porch, and opens the weather-beaten front door that leads to his newest investment.

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At the moment, Nick lives in Boulder with his girlfriend, Erica, a Denver Public Schools teacher. Nick is 32, tall, and serious. He grew up in Boise, Idaho, and moved to Colorado after he graduated with degrees in liberal studies and government from University of Redlands in Southern California. He earned his MBA from the University of Colorado Boulder in 2013 and now works in Denver as a senior associate at Marcus & Millichap, a commercial real estate firm. He and his girlfriend live in a 750-square-foot home near downtown Boulder that Nick owns, but recently they decided they wanted to cut down on their respective commutes.


For student David Pierre-Bell, finding an affordable apartment has been all but impossible.


He paid $407,500 for the two attached units and plans to spend more than $100,000 on renovations. The floors are chalky with dust from recent demolition. There’s a cracked window on the wall to his left. Overhead, wooden beams are exposed; the stripped-down walls in the family room look like lath skeletons in the early light. “It’s a work in progress,” he says. “We’re going to bring this place back to life.” On his left, he can see through one of the walls into the adjacent home. An electrician works quietly in one of the bare kitchens. An ancient, unplugged refrigerator stands like a buoy near the entry.

The houses are brick bread boxes built at the turn of the past century, both shotgun-style with wooden flooring, single-pane windows, and rock foundations. The interiors were remade several times over the decades, and the two houses are a mess of multiple generations of outdated architectural decisions. Layers of drywall are piled on some walls; orange vinyl once was glued atop the kitchen floors; two ramshackle patios out back are on the verge of collapsing. The 800-square-foot homes are chopped into galley kitchens, bathrooms, built-in butler’s pantries, and average-size bedrooms. Just a few years ago, these structures would have seemed undesirable to most buyers. By Denver’s new standards, they are cute, well-located homes that Nick’s contractor says have “character” and “good bones.”

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Nick Steele inside the Cole home he’s renovating.


They also could be moneymakers. Out of the ashes of the global recession that started in late 2007 has risen a city where everyone wants to be. People have flooded into the capital of the New West with dreams of the snowcapped Rocky Mountains, of youthful entrepreneurship, of city streets teeming with restaurants and bars and boutiques. They have come from California, from Texas, from Florida, and from the Midwest. Close to 1,000 new souls are moving into the city each month—an estimated 12,000 people this year. Every one of them needs a place to live.

They have moved into apartment complexes faster than units can be built. Rents are up nine percent this year alone, pushing Denver’s average rents past other destination cities such as Miami and Portland, Oregon. A one-bedroom apartment downtown now can cost more than $2,000 a month. A planned complex at the remodeled Union Station will soon have two-bedroom units available for up to $3,545. According to national real estate database company Zillow Group, Denverites spend more of their monthly incomes on rent payments than residents of every other American city except for places such as New York City and northern New Jersey, Miami/Fort Lauderdale, San Diego, San Francisco, and Los Angeles.

It isn’t much better for people looking to buy. These days, Denver homeowners can expect to spend about 21 percent of their incomes on mortgage payments—more than their peers in Washington, D.C., Philadelphia, and Miami. The average sale price of a home in the city is now $420,000, a 34.5 percent increase from just four years ago. It’s hardly a shock when a house in Highland is listed for $1 million or when a condominium in Capitol Hill gets a dozen offers the day it hits the market. In the past few years, real estate in Denver has become out of reach for most first-time buyers.

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An economic analysis requested by the Denver City Council last year showed that more than 30,000 of the roughly 660,000 people living in the city are spending more than 30 percent of their incomes on rent. To exist comfortably in Denver, according to one estimate, a four-person household has to earn more than $71,000 annually. As a result, for an increasing number of residents, Denver’s housing market has become something to fear—a vise that may yet squeeze out those who are trying to make a life here.

David isn’t sure he’ll be able to find a place by the time his fall semester begins. He settles behind a desk at work this past summer, logs on to a computer, and scrolls through lists of available properties on Craigslist and apartments.com. There’s a 998-square-foot two-bedroom going for $1,445 per month; a 658-square-foot studio for $1,650; and a 746-square-footer for $2,015. “This makes no sense,” he says. Just then, David sees a place for $707. It’s a 1,500-square-foot unit.

“There’s no way this is for real,” he says. “I’m not this lucky.” He clicks on the listing and a message appears on the computer screen: This posting has been flagged for removal. “I knew it,” David says.

By his estimation, over the past couple of years David has contacted dozens of complexes both inside and outside the city. No one has called or emailed back. He’s tried to find a roommate but hasn’t had any luck.

His financial situation is clearly making it exceedingly difficult to find an apartment, David says later that afternoon at the campus library, where he’s studying a geography book and highlighting a section on Europe since 1945. He shaved a day earlier, and there’s graying stubble on his chin. David’s taking two classes this summer; he’ll take four more in the fall. After that, he says, he has a big decision. He can stay in Denver through the spring or he can move away. He went to Grand Junction on a class project a few months back and liked it. He’s been researching the nursing program at Colorado Mesa University there and learned that his scholarship money could cover student housing for at least one year.

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David heads to geography class, then back to work for a couple more hours. A co-worker at the student services office is flipping through an art book when David arrives and takes his place behind the front desk. Along one wall is his school’s food pantry, a place for students who are struggling financially to get several items per week. Atop a small stack of shelves are canned peaches, boxes of Rice-A-Roni, Hamburger Helper, and other packaged foods.
A student, perhaps not much older than David, walks through the door and stops at the front desk. He picks up a piece of paper and writes his name on it. He pulls a can of tuna off the shelf, then some chicken. He grabs two tins of spaghetti rings. He writes it all down on the paper.

“You can have two more items,” David says.

“Two more items of anything?” the man asks.

“How about those diced potatoes and green beans?” David says.

The man grabs the beans. He puts the can into his backpack and zips it up. He turns and smiles. “Thanks,” he says. “Have a good day.”

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David watches the man as he walks through the doorway.

“People like that—he’s probably just like me,” David says. “They’re going to school, trying to make it.”

Just across I-25 from downtown, city Councilman Rafael Espinoza has watched Denver change from his front yard. In Jefferson Park, two blocks from Sports Authority Field at Mile High, he built a two-story house eight years ago. That was when Espinoza could imagine Denver’s future. Now he worries about what his city is becoming.


City Councilman Rafael Espinoza is advocating for more affordable housing.

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On a weekday in July, two months after his election, the 43-year-old made a right up a newly paved street, and then another right. He walked through Jefferson Park, the stretch of grass and trees that gives the neighborhood its name. Along the way, he passed a house for sale, a townhome complex under development, and at least four recently finished projects. The endless buzz of drilling, jackhammering, and sawing had become the soundtrack of his neighborhood. Two soon-to-be-demolished duplexes near the park were surrounded by chain-link fencing and a sign announcing “Wait List Forming NOW!” A few hundred yards away, along West 23rd Avenue, a brick apartment complex had its own sign: “This building is fully leased.” A remodel of a former hotel nearby had microapartments leasing for nearly $900 per month. A luxury townhome complex up the street had a 597-square-foot, one-bedroom unit that recently sold for nearly $200,000; a two-bedroom unit was renting for $2,800 a month.

While the construction around him has Espinoza concerned about the look and feel of his neighborhood, he’s worried most about the unintended human costs to the city. He runs through a list of nearby properties for sale: $619,000 for a three-bedroom, 1,600-square-foot condo; $730,000 for a 2,397-square-foot single-family home; $845,000 for a modern, four-bedroom 2,891-square-footer. “That is not affordable,” he says.

Before running for city council this past spring, Espinoza was a full-time architect who designed affordable housing projects. “If my wife and I tried to buy our house now, there’s no way we could live here,” he says. “We wouldn’t have been part of this neighborhood. It’s not like it was gradual, either. It went from affordable to priced out just like that.” He watched condominium complexes pop up seemingly overnight, all of them with just fewer than 30 units—the magic number that triggers Denver’s mandates on affordable housing. He had seen his neighborhood’s skyline view get squashed, his streets become tangled with construction traffic, his roads fall into disrepair. No matter the scale of development around him, though, real estate prices continued to climb. Something, he thought, needs to change.

It’s difficult to explain what led the Mile High City to where it is today. Developers argue that onerous construction-defect laws have prevented them from building large-scale condominiums, which might satiate the growing market and lower the overall cost of real estate. Proponents of the laws say buyers—especially those in markets where housing needs are bordering on desperation—must have financial protections to ensure their investments are built properly. Whatever the disagreement, one point can’t be debated: The Great Recession laid the groundwork for the city’s current predicament.

Like most cities in the years after the late 2008 stock-market collapse, Denver’s housing market came to a virtual halt. Potential buyers suddenly found themselves without work or in jobs where they took home less than they had previously. With wages slashed or salary freezes in place, people cut expenses. Without buyers, developers stopped building. People who were underwater on their mortgages couldn’t sell—and many people with solid incomes and job security still found it difficult to get loans. “It was pretty much a perfect storm that killed development,” says Ron Throupe, an associate professor at the University of Denver’s Daniels College of Business who studies the real estate industry. “No one was going to risk building in that kind of market because it would have been absolute suicide. Everything stood still.”

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Fast-forward to a few years ago when the metro area’s economy began to knock off the rust. Tech jobs exploded. Startups, like Layer3 TV, put down roots in the city, while Fortune 500 companies, from Liberty Media to Lockheed Martin, expanded in the region. Work in and around Denver became abundant. College graduates flooded into the city; Denver became one of the centers of the nation’s post-recession rebuild.

Although 13,000 new apartment units have come on line in the city since 2013, the growth hasn’t kept up with demand. That’s created a logjam in which monthly rents have escalated at a pace almost unmatched across the nation. Add in the reluctance from developers to invest in the condo market—plus a for-sale housing shortage over sellers’ worries that they won’t be able to afford their next home in the city—and you’re witnessing a rare phenomenon.
As his neighborhood was being transformed, Espinoza expressed concern that the new developments were not priced to accommodate working-class residents. In the spring of 2014, he was asked to attend a neighborhood gathering where he was pressed to run for office. Espinoza balked at the idea but eventually realized he was exactly the person—with support from the community—who might be able to do something. He ran on a simple idea: The city will lose good residents if it doesn’t do more to fix the housing crisis.

“The council has a bully pulpit, and we should use it,” Espinoza says as he walks past construction workers finishing the driveway of yet another small-scale complex. “We have to get the fundamental message out there that people will move away and seek their opportunities elsewhere.”

In 2014, the council passed a revision to its 12-year-old Inclusionary Housing Ordinance in an attempt to entice developers to build more affordable units by giving them financial breaks. Builders have argued the incentives—between $5,000 and $25,000 per unit—don’t go far enough, and even council members admit it could take years before the city sees their benefits. Mayor Michael Hancock has put forth a 10-year plan to raise $150 million in development subsidies for affordable housing. The proposal would potentially be paid for through a development impact fee and increased property taxes. Changes to construction-defect laws are also being discussed. For his part, Espinoza plans to lobby state legislators to address the construction-defect issue again, and he hopes to connect affordable housing developers with landowners. “We’re struggling,” he says. “We need to fix this now, or we’re going to regret it later.”


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Weeds stretch to Nick’s chest as he steps into his backyard. A city inspector came by earlier this morning, and the renovation is moving along, though it’s slow going. Two craggy sheds anchor the far end of the yard, where a battered basketball hoop and backboard are stuck into a concrete foundation. The slumping roofs on the two patios don’t look like they’ll make it through the next year; there’s a toilet on the side driveway, next to an old gazebo. A statue of the Virgin Mary is set inside a partly buried, impossibly heavy cast-iron bathtub that juts out of the ground like a tombstone.

“I wasn’t looking for a pure investment, but that was a factor,” Nick says as he surveys the yard. “Everyone wants to live in Denver. I just wanted to be in an up-and-coming neighborhood.”


A statue of the Virgin Mary graces the backyard of Nick’s new home.


Cole today is what housing experts would call “in transition,” which everyone else would call gentrification. It’s seen as a more affordable option than places like Jefferson Park and Highland, and because of that, it’s begun to undergo huge changes. “I think it’s a good thing if you have someone willing to put the money into a house and then turn that house into something special,” Nick says. “It’s raising the values for everyone. It’s making that neighborhood attractive.”

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In Cole, pickup trucks and Priuses roll down streets; a few modern homes with floor-to-ceiling windows and rooftop patios are supplanting mini Victorians. Fathers with sleeve tattoos walk strollers past fenced-off home-construction sites while women tend to their vegetable gardens. Graffiti has been replaced by intricate murals. This past spring, just down the street from Nick’s house, a 700-square-foot home with rotting siding sold for $139,000. It was flipped—in virtually the same condition—three months later for $197,000. Although 10 or so homes in Cole might go on the market each month, many others don’t even get listed. Instead, developers troll the neighborhood and make front-door offers to homeowners—then tear down the existing structures to make room for bigger, pricier builds.

For those properties that do make it into the market, agents these days are reporting New York City–style aggressiveness on the sale end. Buyers are foregoing inspections, writing personal letters with family photos attached, and promising tens of thousands of dollars above asking price.

“This job has become a lot about lowering people’s expectations,” says Monica Perez, a real estate broker for Your Castle Real Estate, who recently listed a 1,746-square-foot fixer-upper next to a marijuana dispensary—three blocks from Nick’s renovation—for $300,000. “You’re telling buyers: ‘I know this isn’t perfect, but this is how you get your foot in the door in this market. You’re not getting your dream home, or maybe it’s not even what you wanted, but I can guarantee you’re still going to compete with 10, 15, 20 buyers on a place.’ It can be very discouraging.”

All-cash offers have become more common. Between July 2014 and July of this year, for example, 18 percent of the 293 homes sold in Highland were cash purchases. The neighborhood’s average sale was $515,000, a 55 percent jump from just four years ago. Within a five-day period this past June, two properties—one in City Park West, the other in LoHi—fetched more than $1 million each, and both were paid for in cash. If you think there’s no way this market can sustain itself, you’re probably wrong. Prices may level off in the short term, but new residents are always arriving in the city. “For the market to crumble, Denver suddenly has to be an undesirable city, and that isn’t happening,” DU professor Throupe says.

Nick considers himself fortunate to even have found his place. “I put five or six offers in across the city,” he says. “I had a handshake agreement once, but someone put an extra $5,000 on top of my offer at the last second. Buying a house here is like having a second job.” He beat out a handful of other buyers for his 1,600 square feet, in part because he developed a strong rapport with the seller. Once the work is completed this fall, he’ll live in one unit with his girlfriend while he rents the other one. He thinks he can get $1,600 to $1,700 a month.

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The renovation expenses have Nick fussing over every penny—and over the projects he can’t yet afford. A full remodel on the patios will have to wait, as will a complete backyard makeover. He might take down the gazebo on his own. Perhaps someday he’ll remove the sheds and replace them with another rental. “I wish I could have bought here three or four years ago,” he says. “I could have saved a lot of money.” (The $407,500 Nick paid for the house was significantly more than the $217,400 the house was assessed at last year.)



Nick picks at one of his backyard’s weeds and contemplates the work that lies ahead. He turns toward the statue of the Blessed Virgin and stares at it for a moment. “I can’t get rid of that,” he finally says. “That’d be bad juju.”

At 9 p.m. David pushes away from a desk at the campus library and stuffs his geography book into his backpack. Summer rain falls in sheets outside and collects in puddles on the sidewalk. David looks out a window and sighs. “This could be a long night,” he says.

Most evenings, he takes the light rail to the 21 bus. Tonight, he gets a ride home. He doesn’t know how to get to his place from the interstate, so he gives directions using the bus route. David’s made the trip more than 1,000 times.
On the way, he talks of a woman he loves back in Texas. Her photo is the image on his cell phone’s screen. He speaks with her almost every day, but it’s been years since they’ve seen each other. “She doesn’t know my situation,” David says. “She’d kill me if she found out.” More lefts and rights. Finally: home.

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His 2005 Honda Accord is parked in a lot between a chain motel and a diner. The passenger door is dented; the license plates are expired. David gives a dry laugh. “It’s still here,” he says. He unlocks the door.

The back seat is piled with a rolled up sleeping bag and neatly folded T-shirts, shorts, jeans, shoes, and socks. His suit is stashed in the car’s trunk, atop winter clothes stored in a duffel bag. David turns the Honda’s ignition to make sure the battery still works. The odometer flashes 158,067 miles. He sets his phone on the center console, next to a package of Pampers baby wipes. In movies, prisoners track time by carving marks in walls. David uses strawberry air fresheners. One hangs from the rearview mirror; three others—long past their usefulness—dangle from the steering wheel.


If he can’t find housing in metro Denver, David will have to move elsewhere.


The parking lot is empty tonight. The rain stops. It’s quiet. Red taillights from passing cars flicker on the wet asphalt. Customers check into the motel; the diner’s almost empty. The cops don’t come around here often, David says. No one’s threatened to tow his car.

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He settles himself in the driver’s seat and plays a quick game of solitaire on his phone, but he’s tired. Class, work, studying—it’s been a long week. He shuts off the ignition. The parking lot’s overhead lights shine through his sunroof. David takes off his hat and his shoes. He keeps on his socks, his shorts, his T-shirt. He reaches into the back seat and grabs his sleeping bag.

He locks the car’s doors. He unrolls the blue bag and pulls it over his feet, his knees, his hips, his chest. The windows are already starting to fog with his breath. He reclines his seat. At 11 p.m., David closes his eyes.

He will doze for a bit tonight—maybe a few hours of sleep. He will wake at odd intervals and stare up at the lights shining through his sunroof. He will think about the geography test he has next week. He will imagine himself moving into his own place, making his own dinner for the first time in forever. He will try to get comfortable. It won’t happen. Another fitful night in his car. Morning will be here soon.

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