Missing middle focus of CREJ affordable housing conference

Missing middle
CREJ is sponsoring a half-day affordable housing conference on the afternoon of June 20.

A half-day affordable housing conference on June 20 will address one of the the most challenging aspects of the Denver area’s housing market, where the average price of a home sold is approaching $500,000.

The “missing middle” population will be a key of the 2017 Affordable Housing Development & Finance Conference & Expo, which will be held from noon until 4:45 p.m. at the Hyatt Regency Aurora hotel.

It is sponsored by the Colorado Real Estate Journal.

Missing middle

Evan Station Lofts is an example of affordable housing in Denver. Its developer, Troy Gladwell of Medici Communities, will monitor a panel defining the affordable housing problem at a CREJ conference the afternoon of Tuesday, June 20.

It will immediately follow another CREJ half-day conference on the state of the condominium development market in the Denver area.

The affordable housing conference will include 20 panel members from a wide range of fields, including development, lending, nonprofits and economic development.

“This will not be a typical affordable housing conference that focuses on the lower end of the income scale,” James Mulligan, an advocate for affordable housing since the late 1970s in Denver, told me last week.

“One of the main focuses of this conference will be what I call the missing middle,” said Mulligan, an attorney with Husch Blackwell, the title partner for the conference. Indeed, one of the panels is called “The Missing Middle.”

Those in the missing middle are far above the poverty line but do not make enough money to buy a home in the Denver area, where home prices have never been higher.

In fact, the average price of a home sold in the Denver area in May was $490,700, an 8.43 percent year-over-year gain, according to an analysis by the Denver Metro Association of Realtors.

The average price of a condo is a record $317,092, 6.31 percent more than in May 2016.

“The missing middle are people who probably make 80 percent to 120 percent of the area median income,” Mulligan said. “These are families and individuals who might have incomes in the $50,000 to $75,000 to $80,000 range. These are the firefighters, the teachers, the lower-end IT people, the people who do engineering-type work, but aren’t engineers.”

In other words, the missing people are the people who educate our children, protect our homes and keep our offices humming.

They also are the employees who make up a large percentage of the workforce for large companies, Mulligan noted.

Missing middle

James Mulligan says the “missing middle” are struggling to afford to buy homes in Denver’s increasingly expensive housing market.

To that end, one idea to address the affordable housing plight of the missing middle is for companies to put their heads, and pocketbooks, together to come up a way to create a funding mechanism to help them, Mulligan said.

Mulligan would like to see a survey done to quantify the types of people who fall into the missing middle.

Once they are identified, details could start to be hammered out to deal with what is increasingly becoming a housing affordability crisis.

“We need to approach this affordable housing problem holistically,” Mulligan said.

While rising housing prices are good news (except for rising property taxes) for homeowners, they have ramifications for the future growth of Colorado, which has a 2.3 percent unemployment rate, the lowest in the country.

“As far as economic development, some companies will decide to pass on Denver and choose to expand in cities like Austin, where housing is not so expensive,” Mulligan said.

“Other companies either will leave Denver for less expensive markets or will not expand here because their employees can’t afford to buy a home,” Mulligan said.

Following Mulligan’s opening remarks, the first panel will be titled: “Defining the Problem.”

Troy Gladwell of Medici Communities LLC will moderate that panel.

Panel members include:

  • Lauren Brockman, Convergence Multifamily Real Estate Group;
  • Kimball Crangle, Gorman & Company Inc.;
  • Charles H. Woolley II, St. Charles Town Co.;
  • Greg Glade, Solvera Housing Advisors; and
  • Julianne Stern, Denver Office of Economic Development.

The Missing Middle panel discussion will be moderate by Rodger Hara, Community Builders Realty Services.

Missing Middle panel members include:

  • Kyle J. Henderson, Wood Partners;
  • David S. Smart, Eaton Senior Communities;
  • Mollie Fitzpatrick, BBC Research & Consulting; and
  • Alison George, Colorado Department of Local Affairs.

The “Employers and Business Community as Stakeholders” panel will be moderated by Jennifer Haynes, Husch Blackwell LLP.

Panel members will include:

  • Trinidad Rodriguez, D.A. Davidson Cos. and Downtown Denver Partnership’s Denver Civic Ventures board;
  • Kristin Kenney Williams, Vail Resorts;
  • Sara Baris, Denver Public Schools; and
  • JJ Ament, Metro Denver Economic Development Corp.

Michael Thomas of Gershman Mortgage will moderate the final panel, which will address capital sources for affordable housing.

Participants in the capital sources panel will include:

  • Carl Koelbel, Koelbel & Co.;
  • George Thorn, Mile High Development;
  • Ross Kaufman, RBC Capital Markets;
  • Scott Horton, Wells Fargo Bank;
  • Laura E. Clark, S.B. Clarks Cos.; and
  • Terry C. Barnard, the Colorado Housing and Finance Authority.

John Rebchook has been taking the pulse of the Denver-area and Colorado commercial real estate world for almost 35 years. He joined the editorial staff of CREJ in 2011. Prior to that, he was the Real Estate Editor of the Rocky Mountain News from 1983 until it closed in 2009.