Jeff Haanen

Articles Tagged with

affordable housing

""/
Architecture and DesignBusinessCraftsmanship & Manual LaborEconomyWork

Affordable Housing: What You Need to Know About the Most Critical Issue Facing Colorado Today

 

Imagine with me for a moment.

Imagine you and your new spouse have been outbid on four straight houses in two months. Instead of buying your first home in Denver, you finally decide to work remotely, move back to the Midwest to be closer to family, and leave Colorado.

Now imagine you’re a business owner at lunch with a real estate developer who is fighting off three simultaneous lawsuits from trial lawyers representing a homeowner’s association. He tells you, “I’ll never build condos again. Never.”

Finally, imagine you work construction and rent an apartment near Five Points. In the past eight years, your rent has increased from $900 per month to $1600. Exasperated by rising costs – and stagnant wages – you move to Frederick, 40 minutes from friends, family, and your job site. Dejected you grab a beer with a friend after work. Your friend tells you that back in 2006, his grandma gave him $5,000 for down payment on a $175,000 condo. Today, that condo is worth $265,000 – and your monthly rent is now more expensive than his mortgage.

Colorado is facing an economic and social tsunami centered on a single issue: affordable housing.  

There’s a unique mix of factors at play.

  • Colorado is experiencing a population boom. It’s the second fastest growing state in the union, and population growth has far outstripped available housing for Colorado’s new residents.
  • Cities are becoming more popular places to live. With more people desiring to move into cities, fix ‘n’ flips, remodels, and urban redevelopment has transformed the housing markets in the metro area.
  • Housing costs, particularly in cities, have skyrocketed . Home prices are now a staggering 49.1 percent above the high reached in 2006. To make things worse…
  • Colorado has a labor shortage in the trades and middle skilled jobs. Which means there aren’t nearly enough people to build more houses. Sadly…
  • The rise in housing costs has hit low-income communities the hardest. For example, from 2000-2014, in historically black and Latino Montebello, monthly rent rose 18% to a median cost of $1690. Mayor Hancock says an estimated 38 percent of Denver’s renters can’t afford the rising costs.

The upshot: The state needs far more entry-level housing built to keep up with demand, such as condos. Ten years ago the percentage of new residential construction builds that were condos was 25 percent. In 2015, it had plummeted to 3.4 percent. This means that getting a starter home (either condo or townhouse) has become nearly impossible.

So why not build more condos, even if you have to search harder for labor? The answer: there is one major reason why developers have not built more condos in the last decade: They’re getting sued like crazy. Here’s how it works:

  1. A condo owner has a cracked foundation or leaky window that could be fixed for anywhere from a few hundred to a few thousand dollars.
  2. A second owner has similar complaint, and the condo’s homeowner’s association turns to a law firm that specializes in “construction defects lawsuits” and the case turns into a class action lawsuit. What started as a complaint over relatively minor problems (that likely could be addressed by paying the right subcontractor to fix the problem) turns into a multi-million-dollar lawsuit, costing the developer enormously (yet handsomely profiting a small group of law firms).
  3. Because of this litigious habit, developers flee from condos, often unable to even get insurance on the development because of exorbitantly expensive lawsuits over construction defects. (One firm boasts 100+ “recoveries” in excess of $1 million.)

The result of all these factors: an affordable housing crisis.

Not all of these issues can be addressed at once. But now is the time to address one of these issues on a statewide level: our state’s “construction defects” law.

Local solutions have been proposed. Cities have passed a patchwork of policy Band-Aids, such as the City of Denver’s new tax which will provide an estimated $15 million per year for new affordable housing developments. But this amount is only a drop in the bucket for a city that needs an estimated 60,000 more affordable units right now. Many have also passed laws addressing construction defects lawsuits their own municipalities.

But what needs to be addressed is how to allow the market to build condos profitably once again throughout the state of Colorado. Apart from a statewide solution, condo builders are “gun shy” on applying for new builds, thinking that an unfavorable statewide bill would trump local efforts.

Today a hodgepodge of bills are being proposed in the state legislature after years of unsuccessful attempts to address the issue. One requires homeowner’s associations to undergo mediation that makes suing developers more difficult; another addresses the cost of insurance; yet another gives builders the ability to repair construction flaws before legal action can proceed.

Most Coloradoans won’t (and shouldn’t) get into the details of the bills. This is the job of our elected officials. But the Colorado public needs to remember three things:

  1. This issue is absolutely critical to the economic future of Colorado. Our economic growth is fundamentally dependent on attracting and keeping talented labor. If talented tech entrepreneurs or skilled craftsman can’t find affordable housing, they’ll leave the state and our growing economy will start to contract.
  1. At the heart, this is an issue of human flourishing. Wealth building for most low-income families begins with an affordable mortgage. To have a home means to have an asset – often times the only major asset they have – that can grow in value. To be stuck in the vortex of rising apartment costs yet stagnating wages fuels the cycle of poverty. Getting a starter home at a reasonable price is key to the well-being of our low and middle-income communities in Colorado.
  1. Now is the time make a change. In the next 3-4 weeks, bills will either get passed to address construction defects, or they’ll get shot down in committee, often influenced by organizations like the Colorado Trial Lawyers Association, who have profited enormously from the status quo. Today, both Democrats and Republicans are aligning to say we can retain homeowner’s rights (including their ability to protect their most valuable asset and, in some cases, seek damages in court) yet hinder this rampant practice that is hurting our most vulnerable citizens – and eventually, all of us.

Does shoddy construction exist? Absolutely. We need to praise an ethic of craftsmanship among condo developers, and build quality condos that can last for 100 years (and won’t fall apart in 30 years). But we also need to recognize now is the time to solve one piece of the affordable housing puzzle.

What can you do?

The best thing you can do is contact your Colorado state Senator or Representative. They rarely hear from their constituents, so either an email or a phone call will likely be returned.

And instead of getting angry with them (they get a lot of that), tell them how much you care about this issue. Tell them you believe in giving developers the chance to repair their mistakes without costly trials; tell them to find ways for peaceful resolution of disputes between home owners, HOAs and developers; tell them you want to find ways to allow builders to once again build what our state needs the most: high-quality condos.

Tell them how excited you are for them to show political courage and bipartisan cooperation to solve this issue, and that you believe Colorado will benefit for generations to come when they pass the proper bills that address each side of this issue.

And if you can’t remember all of that, just tell them this: “I believe in a vision of a good city where men and women of all backgrounds can live in homes they own, provide for their families, and participate in the flourishing of their communities.”

Photo credit.  Want to print this out? Here’s the PDF

""/
Craftsmanship & Manual LaborWork

Want an Affordable Home? Thank a Craftsman

 

What is causing soaring home prices in Denver right now? This is the question on many would-be buyers’ minds. In June, the average home price in Denver was $366,419 — the highest in Colorado state history.

The Denver City Council has spent significant time trying to find solutions to the shortage of affordable housing. (Recently, The Denver Post reported that Mayor Michael Hancock wants to raise $15 million a year to subsidize projects as part of a much larger plan.) But how did we get here?

My wife and I asked our real estate agent, Trish Hopkins of RE/MAX, the same question. As we sat down to coffee, expressing our woeful prospects of ever finding a house we could afford, Hopkins said at least one problem is obvious. Inventory. She told us the average number of houses on the market for the Denver area is around 12,000 at any given time. Right now, it’s less than 3,500. With Colorado’s population boom, it just comes down to math.

So why don’t we just build more houses?

I recently asked that question to the CEO of Shea Homes, Chetter Latcham. He shared my bewilderment at the historic prices, but added that he has nearly 100 houses just waiting to be built. There simply aren’t enough people to build them. 

The shortage of skilled manual labor in Colorado has been a challenge for some time. The Denver Business Journal wrote about it nearly a year ago. Yet the shortage of skilled tradesmen is not limited to Colorado. Manpower Group reported in 2014 that skilled labor jobs are among the hardest to fill internationally. In 2013, Forbes reported that the skills gap will worsen as nearly one-third of all tradesmen are 55 and over and will retire without nearly enough young craftsman to take their places.

Workers are certainly moving to Denver, but not to become plumbers, electricians or contractors. A Brookings Institution study showed that from 2010-2013, Denver attracted the second most young adults (25-34-year-olds) of any American city (just behind Houston, and tied with San Francisco). Great, right? Well, it looks like most young adults would rather work in other industries. The Colorado Home Builders Association sees this and has tried to combat the labor shortage with a new training program for young tradesmen.

Now the labor shortage is growing into an economic problem. Many millennials and transplants of other generations are priced out of the Denver home market. Without more affordable housing — and without more skilled laborers to build those houses — Colorado’s economy can’t continue to attract high quality talent to sustain long-term growth. And, we risk losing talented young workers to more affordable places like the Midwest.

The Root of the Problem

So, if Denver desperately needs houses that can be built by skilled tradesmen who are paid a good wage, then why the persistent shortage of manual laborers?

I have a theory: We’ve devalued the American Craftsman. I’ve written about this for Christianity Today (“The Work of Their Hands”) and the academic journal The City (“How We Lost the Craftsman”). Still, to date we’ve underemphasized how deeply biased our educational systems are against the trades.

Pursuing a four-year liberal arts degree has become not only the norm, but essentially the definition of the purpose of education. David Coleman, a former McKinsey & Company consultant, president of the College Board, and one of the architects of Common Core, has said that he intends to “help the [Common Core] movement towards agreement that college- and career-readiness is the goal of K−12 education in this country.” The strong implication is: go to a four year college or we’ve failed to prepare you for a good life.

A Different Kind of Intelligence 

I recently had dinner with my friend Jim DeWeese, a small electrical contractor here in Denver. He’s thriving: His business is growing, and he has recently hired his first employee. But when we spoke he shared with a tinge of shame in his voice that it took nearly a decade for him to get through community college. And it was difficult the whole time. He isn’t a classroom and lecture learner. He is gifted to work with his hands.

But culturally, we don’t value the intelligence and skill of those who work with their hands. Consider this passage from Canadian writer Alistair MacLeod in his short story “Closing Down for Summer,” where a miner reflects on his dirty, yet beautiful, work:

“That they might journey down with me in the dripping cage to the shaft’s bottom or walk the eerie tunnels of the drifts that end in walls of staring stone. And that they might see how articulate we are in the accomplishment of what we do. That they might appreciate the perfection of our drilling and the calculations of our angles and the measuring of our powder, and that they might understand that what we know through eye and ear and touch is of a finer quality than any information garnered by the most sophisticated of mining engineers with all their elaborate equipment.”

DeWeese, like this miner, exhibits a skill and intelligence that is displayed at the intersection between mind and hand; it is intuitive and spacial. They both have been called to be craftsmen. Why do people like Jim feel compelled to apologize to take up the work of a craftsman?

Why, when our crumbling American infrastructure is longing for craftsman, have we shamed the pursuit of “vocational school” or a career in the trades as second rate? When we live in a culture where lattes are served up by English lit majors on federal assistance, why have we failed to realize that craftsmanship is not only a good way to make a competitive income, but it’s a noble way of life? 

The Remedy

Maybe a better question is: What will motivate more young men and women to go into the trades? 

There have been a few efforts to address this issue, such as Build Colorado and Skills to Compete, two Colorado initiatives designed to fill the skilled labor shortage. But most efforts fall short. Many only address compensation: Choose the trades because you can make more money than your college-educated peers. But this approach has limited results. After all, people are not motivated only by money, as Daniel Pink tell us. (His thesis is that people are ultimately motivated by mastery, autonomy and purpose.)

As Barry Schwartz, a Swarthmore professor, wrote in a recent New York Times article, “The truth is that we are not money-driven by nature. Studies show that people are less likely to help load a couch into a van when you offer a small payment than when you don’t, because the offer of pay makes their task a commercial transaction rather than a favor to another human being.” Research proves that people want their work to be more than an hours for dollars transaction — they seek the chance to be creative, to do their work with excellence and to serve a greater purpose in the world.

Humanities 101

To provide enough tradesmen for America’s economy, we need more than numeric arguments. We need the humanities. To influence more young people to take up a career in the trades, I believe we need to elevate three aspects of the trades: intelligence, beauty and vocation. 

1. We’ve overlooked the intelligence of the skilled tradesmen, assuming that office jobs are where intellect thrives. Mike Rose, author of The Mind at Work: Valuing the Intelligence of the American Worker, argues we’ve seen the laborer “muscled arm, sleeve rolled tight against biceps, but no thought bright behind the eye, no image that links hands and brain.” In contrast, Rose sees the lightening-fast decisions of a waitress, the complex spatial mathematics of a carpenter and the aesthetic dexterity of the hair stylist as work to be praised and respected.

2. A vision of craftsmanship is directly connected to beauty. Before the industrial revolution, a city’s artists and its tradesmen were often the same thing: Each made structures for both  utility and beauty. The medieval guilds had high standards. Weavers, painters, metalsmiths, bakers, butchers, soapmakers and leatherworkers contributed not just to the local economy, but also to a city’s social fabric. Those who proved technical competence in the trades often entered the social elite. Rightly so — they contributed significantly to the well-being and beauty of a city.

3. The vocation of the craftsman is not only noble, but Christians remember that Jesus himself was a tekton, a craftsman. Theology gives a new honor and dignity to doing the work that God Incarnate himself did for thirty years. In contrast to the Greeks, who saw manual work as the work of slaves (and mental work as the proper work of philosophers and the like), the first churches iassigned dignity to everyday work, an idea incomparable in the Roman world. They reasoned, if God himself is  the architect and builder of the heavenly city (Hebrews 11:10), should we, too, not be willing to do all kinds of work?

Work, in the Christian vision, is ultimately about serving God by loving your neighbor. And as it turns out, this moral vision is what motivates the work of people across industries. Again, Schwartz writes:

“We need to emphasize the ways in which an employee’s work makes other people’s lives at least a little bit better (and, of course, to make sure that it actually does make people’s lives a little bit better). The phone solicitor is enabling a deserving student to go to a great school. The hospital janitor is easing the pain and suffering of patients and their families. The fast-food worker is lifting some of the burden from a harried parent.”

What we think about work matters to individual workers and whole networks of workers — that is companies and  the economy. And the answers to our questions about affordable housing can be found in our best thinking about motivation, work and purpose.

Photo credit: Where have all the home builders gone? 

Privacy Settings
We use cookies to enhance your experience while using our website. If you are using our Services via a browser you can restrict, block or remove cookies through your web browser settings. We also use content and scripts from third parties that may use tracking technologies. You can selectively provide your consent below to allow such third party embeds. For complete information about the cookies we use, data we collect and how we process them, please check our Privacy Policy
Youtube
Consent to display content from - Youtube
Vimeo
Consent to display content from - Vimeo
Google Maps
Consent to display content from - Google
Spotify
Consent to display content from - Spotify
Sound Cloud
Consent to display content from - Sound