Consultants say Centennial home ownership projected to decrease as homes become less affordable
If current housing and economic trends continue, home ownership will decrease in Centennial and only those working in the mining, oil and gas industry will be able to afford the median price of a detached home in the city by 2035, consultants told the City Council during its June 6 study session.
The session, held at Centennial Civic Center, focused on sharing an update on the city’s “Housing Study and Policy Development” project. According to a memo published on Centennial’s website, the project aims to “understand the entire spectrum of housing issues, define various needs for housing, and identify priorities to potentially inform policy.”
Root Policy Research, a Denver-based consulting firm, and Clarion Associates, a Denver-based land-use consulting firm, are members of the core team of the housing study, according to the city’s website. Representatives from both organizations presented during the June 6 meeting, discussing the risk of unaffordable housing increasing in the community.
Root Policy Research’s findings: Projected decrease in home ownership and affordability for many industry workers by 2035
As the average cost of rent has increased year-over-year both nationally and in Colorado, according to a May report from Rent.com, the cost of rent in Arapahoe County and Centennial has also increased, said Julia Jones, an associate with Root Policy Research.
Jones said data from the Denver Metro Vacancy and Rent Survey shows the median rent for all unit sizes in Arapahoe County exceeded $1,250 per month in 2021, and currently in 2022. The median rent exceeds $1,500 per month.
Jones said the survey is of rental properties rather than renters, making it likely that it underrepresents the rental prices of single-family detached units, which are homes that stand alone and don’t share walls with another building.
When comparing the west Centennial area to the east Centennial area, Jones said the survey showed median rents increased more in the west. From 2021 to 2022, rent for two-bedroom, two-bathroom and three-bedroom units in western Centennial increased by more than $400 per month.
The median household income for Arapahoe County, however, has not risen at the same rate as housing prices, Jones said.
“Home value has increased 398%, whereas median household incomes have increased 236%,” Jones said, comparing 1980 to 2020. “The tagline is that household incomes have not kept up with housing prices from 1980 to 2020.”
Based on its research and affordability assumptions, Root Policy Research projected that if current housing, growth and economic trends continue in the same way they have been, only people working in the mining, oil and gas industry will be able to afford the median price of a detached home in Centennial by 2035, Jones said.
The consulting firm also estimated that by 2035, Centennial will have 17,656 new workers and 10,499 new households. Given the firm’s affordability projections and analysis, it estimates the home ownership rate will decrease from the current 82% to 67%, and there will be about 2,767 people who will commute to Centennial for work but live elsewhere.
“The key takeaway here, I think, is that without housing policy changes, in-commuting will inevitably increase and homeownership will decrease,” Jones said. “This is not uncommon in communities like yours. It’s not a judgment. It’s what the data tells us, if we look forward using the information that we have today.”
Councilmembers react: Assessing community needs and potential solutions
Councilmember Marlo Alston, who represents District 4 of Centennial, expressed concern about the projections and what it may mean for local workers, such as local business owners, healthcare workers and educators.
“With this presentation, the more we get into this, the more depressing it is,” Alston said. “This is really a dire situation, where we literally don’t have a lot of land to do a lot of things with, yet we want to see our people live here and thrive here, not just survive.”
A limited amount of land in Centennial was also something Tammy Maurer, a District 2 councilmember, brought up, saying that while there are limited opportunities in Centennial, she has noticed a lot of housing units in Littleton, Englewood and Aurora.
“What if we don’t do anything, and we kind of let these adjacent agencies do what they’re doing? Because they’re really close,” Maurer said, saying the drive to Centennial is not much farther. “Is that an approach that we look at or consider to see what the other agencies are doing and if they would fill our housing needs?”
Heidi Aggeler, a co-founder of Root Policy Research and the managing director, responded to the question, advising against a do-nothing approach, saying that she’s seen some communities take that approach in Northern California and it can cause problems attracting good employees, workforce and capital.
“If you can develop particularly affordable housing or workforce housing, if you had the opportunity to do that now, we’ll be in a much better shape in the Front Range in terms of attracting employers, being able to provide housing for employees and being able to sustain our economy long-term,” Aggeler said.
With regards to developing solutions with a limited source of land, Aggeler said the Clarion Associates consulting firm can help Centennial develop land use strategies to better make use of the land Centennial has, and to see if there are ways to pair strategies with programs that can get people the affordable housing units they need.
Next steps and collecting community feedback
Developing policy and land development code changes is planned to come after June, according to the housing study’s timeline. In the meantime, the consultants will continue gathering community feedback through focus groups, surveys, meetings and events such as Centennial’s District Summer Socials, in which residents are invited to come socialize with city councilmembers.
Some feedback the group has already received is some senior residents who are looking to downsize their homes cannot find products in Centennial, Aggeler said.
In an interview on June 3 at the Centennial Center Park’s 10th anniversary celebration, Mayor Stephanie Piko said she’s heard people say they want police officers and teachers to be able to afford to live in the community, bringing conversations about affordable housing to the forefront.
“Since the average income in Centennial is over $100,000, someone who’s making 60% of the AMI [Area Median Income] is $60,000, which is still a very substantial income. But that still can qualify for affordable housing, depending on how it’s set up,” Piko said.
“There’s a lot of variables,” she continued, adding that community outreach is important to the process. “We don’t know exactly where or what it’s gonna look like when we’re done, but we want to have all options on the table and decide what’s going to fit best for our community.”
Those interested in learning more about the housing study project can visit the project’s website (centennialco.gov/Government/City-Projects-and-Initiatives/Housing) or email email@example.com.