A plot next to the Tramway Nonprofit Center will be home to condominiums that are within reach of families being priced out of Denver’s Cole neighborhood, according to the nonprofit landowner and the development team that will build there.
The Urban Land Conservancy, a Denver-based real estate nonprofit, owns the Tramway center at 3532 Franklin St. and the neighboring plot. Mark Marshall, the Urban Land Conservancy’s vice president of real estate, said it’s in a neighborhood where “black and brown people seem to be less and less able to stay … because of housing costs.”
The complex was once owned by the Denver Tramway Company, which was founded in the 1880s and ran trolley lines and later buses. When the Urban Land Conservancy demolished a long-vacant and derelict warehouse adjacent to the Tramway center in 2018, it said affordable housing would likely be in the lot’s future. In its request for proposals from developers, the conservancy noted that the annual household income in Cole had increased 68 percent from $29,170 to $49,051, while the total neighborhood population decreased slightly from 4,651 to 4,600 residents.
“Providing affordable housing at this location will offer lower-income residents some additional opportunities to remain in this neighborhood,” the conservancy said.
In June, the conservancy signed a development agreement with a team that includes Palisade Partners, which has built mixed-used complexes in nearby Five Points such as The Wheatley. It has market-rate and affordable apartments for rent as well as townhomes for sale. Palisade is working on the Cole project with JJK Places, a for-profit real estate company committed to addressing social issues that was founded by Will Kralovec, who once worked for the Urban Land Conservancy.
Kralovec said Palisade Partners and JJK Places plan to build about 50 condos on the Urban Land Conservancy lot that could be home to people now renting in the neighborhood or to people who moved because they could not afford to stay. Kralovec said the developers were just beginning to tell people in the neighborhood about their plans and would increase the outreach in coming months. He said a wait list of prospective buyers would be opened four to six months before construction starts, which he expects to be in 2022.
According to the most recent report from the Denver Metro Association of Realtors, the median price of a condo in Denver is more than $500,000, up 12 percent over the previous year.
It’s too early to put numbers on the Urban Land Conservancy project. Kralovec said his team plans to price the condos so as to be affordable to people making 70 to 80 percent of the area median income. Currently, the AMI for a family of four in Denver is $78,500. In real estate circles, a home is affordable if the mortgage or rent takes up no more than a third of a family’s income.
The developers want to have a high percentage of two- and three-bedroom units to accommodate families, Kralovec said. He said he hopes all the units will be for families earning less than the area median income, but some units could be at market rates, depending on terms the developers are able to work out with investors.
Homeowners are better able to predict their housing costs because they have mortgages, making them less susceptible to displacement than renters, who do not always know when their landlords will raise the rent or by how much, Kralovec said.
“We need to have more affordable for-sale opportunities in and around Denver,” Kralovec said. “That’s what we’re striving to do in partnership with ULC.”
The Urban Land Conservancy will retain ownership of the plot on which Palisade Partners and JJK Places will build, helping to keep the development costs down. Marshall, the Urban Land Conservancy’s real estate chief, said the Cole condos could one day be absorbed into the Elevation Community Land Trust, which was incubated by the Urban Land Conservancy and established in 2017.
With a land trust model, affordability can be passed on. Homeowners in land trusts own only the structure and pay a ground lease to the trust. Homeowners can sell at a profit, but still have to keep the price below market rates. Trusts are managed by homeowners, community members and property experts who can intervene, including with financial help, to support homeowners who might run into trouble paying their mortgages.
A Elevation condo project in a west Denver neighborhood near the Santa Fe Arts District could “create a model that we could recreate across the city and across the metro,” Marshall said.
Across Interstate 70 from Cole, the grassroots Globeville, Elyria-Swansea Coalition has been building its own land trust in hopes of staving off some of the displacement that often accompanies gentrification.
Kralovec said residents of Globeville, Elyria-Swansea and other north Denver neighborhoods could be potential customers for the Tramway project.
“If I had my druthers, we would build 10 of these projects in various parts of Denver,” Kralovec said.
In addition to housing, JJK Places and Palisade Partners will include commercial space in their Cole project. The retail tenants in the new building are likely to be similar to those in the Tramway center, which is home to such nonprofits as Denver Urban Scholars, which helps students finish high school, and a preschool.