Not Affordable: More Market-Rate Housing Coming to Lakewood

Newly elected Lakewood City Council Member Isabel Cruz says increasing housing supply has led to higher rents and gentrification of her area, Ward 2.  However, Lakewood’s Strategic Housing Plan (SHP) says the opposite will happen in the future, that increasing overall supply will decrease rents, especially in areas of high homeless population such as Ward 2. The plan depends on the theory that more market-rate housing will create affordable housing in an indirect way that has not been proven in Lakewood. This discrepancy between theory and observable experience was not resolved before Lakewood City Council agreed to move forward with the plan as proposed on December 18, 2023.

Following SHP recommendations will:

• Incentivize market-rate, high-density, low-parking apartments for middle- to higher-income residents
• Enable pallet homes and create homeless shelters, possibly in a closed Jeffco school, for very-low income residents
• Fund these programs with city tax dollars
• Enable housing opportunities for low- to middle-income residents when residents vacate existing housing

This plan to recommend more development was created by a group largely comprised of developers, along with city staff. Only one “active resident” is listed (Hattip Hasfjord – see SHP pg 3)

Many of the details needed to understand how the plan will impact Lakewood are missing from the plan. Council Member Mayott-Guerrero explained in the very beginning that passing the plan is just the first step for being able to really dig into the details and research this plan. City Manager Hodgson apparently disagrees. She says that staff has been listening to what Council wants and has been acting on those desires by developing project specific proposals.

The detailed project proposals were developed without public input or vote by Council on what their priorities will be. The proposals will be ready for Council approval as soon as the plan can be passed.

The goal would be to move quickly. Hodgson already has a specific bank and funding options researched to start incentivizing development as soon as first quarter 2024.

That seemed to be exactly what Councilor Stewart wanted to hear. As current chair of the Budget and Audit Board, she asked for options to begin adding to the budget immediately (normal budget procedure would be to pass new options in fourth quarter 2024). She also pointed out that her proposals for the Lakewood Planning Commission to research loosening Accessory Dwelling Unit (ADU) regulations would help move the SHP forward.

These are big changes that the public has been told will have the opportunity for further discussion. However, having proposals ready to be approved is different than ready for public participation. Several mentions of the “housing emergency” and “needing to move quickly” suggests the rubber stamp process may be implied with the passing of the plan.

For example, combining current ADU research, zoning code rewrites that are almost completed by staff (not publicly available) and past precedent for using city funds, Lakewood could start accelerating ADU development within first quarter 2024 by directly paying for water tap fees.

Although the word “subsidy” is rarely used, Lakewood has paid in the past for public infrastructure “gap funding” for water tap fees through the Lakewood Community Block Grant. These tap fees are the biggest hurdle for ADU development so increased funding or subsidizes could greatly increase development.

Just the change in ADU development, effectively changing all R1 into R2 zoning, would double the housing density of Lakewood.

As the Strategic Housing Study found, it is not possible at today’s construction costs to develop new housing at less than market rate.  Lakewood will not and cannot develop apartments that are more affordable – the government is not a developer. The Strategic Housing Plan does not guarantee new affordable housing but rather makes new market-rate housing available for higher income residents to move into, thereby increasing housing migration, with the hope that older affordable units will open up (Hattip Ditson).

This plan will increase market-rate housing by offering incentives including:

• Public funding for developers and housing assistance for individuals
• Relaxed regulations such as decreased parking requirements and the ability for pallet homes
• An easier permit process and expedited assistance

Correction: Study date changed from Dec 19th to 18th