A thriving city that includes some trendy spots that attract natives and draws new people to live in the community can be a great place to work as an agent.
However, it is imperative to provide for all people and not just those who have the money to visit the trendy restaurants and shops.
One example is Denver, where the Denver Post noted in a recent editorial that elected officials are trying some different things to ensure that there are affordable living options even as the city sees property values increase.
A key policy shift occurred in 2016 when Mayor Michael Hancock worked with City Council members to earmark $150 million over 10 years to create affordable housing units.
The Post noted that this program includes tweaked property taxes and developer fees to fund a program designed to erect or acquire 6,000 rental and for-sale properties for those with limited resources and incomes.
While Denver is looking at new approaches to the housing issues looming, other cities, including San Francisco, have handled gentrification issues in a more aggressive manner.
In San Francisco, one of the most expensive markets in the country, city officials recently adopted new affordable housing requirements for developers. The inclusionary housing law, which dates back to 2002, requires developers to contribute below-market-rate housing to provide housing for the city’s lower income residents.
The amended law now sets new requirements for rental and ownership development and sets in-lieu fees. It requires onsite rental projects of 25 or more units, for example, must provide 18 percent of the units at below-market-rate, of which 10 percent must go to those earning between 40 percent and 65 percent of area median income.
The legislation was approved by the Board of Supervisors in an 11-0 vote.
Supervisor Jane Kim told the San Francisco Examiner that “it took hours and hours of meetings and a lot of debates and negotiations.”
“We wanted to see developers contribute the most that they can to affordable and middle income housing,” Kim said.
Analysts in Denver are concerned that the city’s affordable housing goals are too modest. They contend the goal of 6,000 units over the next decade won’t even make a dent in the growing wall of exclusivity that is rising in the city.
While gentrification remains rare nationally, it can accelerate more rapidly in cities like Denver, San Francisco and Boston.
In Boston, working class neighborhoods like East Boston, South Boston, and parts of Dorchester have started to attract residents with higher median incomes and this has, in some instances, left many low-income families on the outside looking in at their former neighborhoods.
In Seattle, its Central District has become a magnet for moneyed residents, leaving former residents looking for an affordable place to live as rents and home prices rise in their neighborhoods.
From San Francisco and Denver to Boston, this phenomenon will have a great impact on real estate agents in the coming years. We must be aware that as city leaders tackle the issues, costs will rise across the board. The more the city increases fees and taxes to create affordable housing stock, the more housing costs for everyone else.