Mounting affordability concerns are pushing one of Denver's largest employers to take matters into its own hands with plans to develop workforce housing for employees in the region's healthcare industry.
Kidney dialysis care provider DaVita has partnered with Goshen Development and Continuum Partners, two local development firms, to transform the surface parking lot at 2000 Welton St. in Denver's Five Points neighborhood into a to-be-determined number of housing units intended to provide “much-needed workforce housing," according to a statement from the developers and Denver-based DaVita.
“Denver, like so many other major metropolitan areas today, has an affordability crisis,” Continuum Partners CEO Mark Falcone said. "DaVita, like all major employers in the Denver market, has seen recruitment and retention challenges due to rapidly rising housing costs, [and] 2000 Welton St. will be a valuable source of housing for their employees and others who work in and around this neighborhood.”
A DaVita affiliate purchased the roughly half-acre site earlier this year for $3.25 million, according to local property records. While planning for the development is still in the early stages, Goshen and Continuum are aiming to begin construction sometime in late 2025 or early 2026.
The project, once realized, will likely be among the first to be built under the Colorado Middle Income Housing Authority. The program provides developers an avenue to work with the state to secure the financing necessary to build workforce and affordable housing. It was established through a Senate bill that was signed into law about two years ago and provides funding for rental units priced between 80% and 120% of the area’s median income.
Similar to other markets that boomed in the early years of the pandemic, Denver multifamily rents jumped from about $1,500 a month in 2020 to the current average of nearly $1,900 per month, according to CoStar data. Demand for units at middle-tier properties, which have been hit the hardest by rising rates and inflation, continues to climb. Yet despite having one of the most active apartment construction pipelines in the country, most of the units underway are concentrated at the higher end of the development spectrum.
Denver officials have attempted to address the city's worsening affordability landscape with a mix of strategies aimed at boosting housing development, specifically for lower-income renters. In 2022 the city passed its Affordable Housing Policy, which requires new developments that include 10 or more units to set aside as much as 15% of the project for low-income renters.
Mayor Mike Johnston has said his goal is to build or preserve at least 3,000 affordable housing units each year over the next eight years, and Denver voters will likely decide on a potential sales tax increase aimed at generating funds to be allocated to remedying the city's shortage of affordable units.
“Right now, we know that Denver lacks the volume of affordable housing we need to meet our community’s needs,” Johnston spokeswoman Jordan Fuja said in a statement. “In order to tackle this challenge head-on, we’re exploring all options to fund affordable housing in the city.”