Denver staff outline feasibility for "Unlocking Housing Choices," councilors press on taxes, equity and zoning concept

Denver planning staff and consultants on Tuesday presented early financial-feasibility findings for "Unlocking Housing Choices," a Phase 1 zoning text-amendment project that aims to increase missing-middle housing while preserving existing houses in urban neighborhoods. The presentation said several proposed bonuses and revised form standards could produce more attainable units without enabling broad scrape-and-rebuild development.

The presentation from City Planning staff and consultant Arland Land Use Economics explained the study focused on an "urban neighborhood context," using pro formas that include land, construction, soft costs and system development charges to test scenarios under current rules and the proposed bonuses. "When an existing home is preserved, we generally found that the development of additional missing middle housing on these properties is feasible," a consultant said, and staff noted a modeled backyard cottage sale price of about $361,000 in their urban scenario.

Why it matters: The project seeks to reduce building mass and scale in low-scale residential zones while making smaller multi-unit types (tandem houses, backyard cottages, double duplexes) comparatively more financially attractive than large single-family speculative builds. Staff emphasized Phase 1 would require retention of the front house to qualify for bonuses, limiting opportunities for large-scale teardown-and-rebuild projects.

Councilmembers' questions focused on tax and market impacts, infrastructure constraints and equity. Councilmember Paul Cashman asked whether limiting allowable square footage could reduce property values and tax revenue; consultant Arlene Toniwaki said "if you do reduce the amount of square footage ... theoretically, some of your values and potentially your taxes may go down," adding that assessor valuation lags and outcomes depend on building quality and timing. Staff said system development charges and tap fees were included in the feasibility work.

Infrastructure and fees were another practical barrier discussed. Staff said Denver Water and DOTI noted many lots could be served without system-wide barriers and that Denver Water currently offers discounts for additional units on the same parcel, but Metro Wastewater and specific tap-size and hookup costs can complicate projects. A staff member noted that the financial models accounted for those fees.

Equity and unintended consequences drew sustained attention. Planning board and council participants warned that restricting house scale in one area can push higher-end development to other neighborhoods, potentially reinforcing economic segregation. "Zoning is kind of a blunt instrument," one board member said, urging parallel policy tools to pair with zoning changes to avoid displacement and achieve equitable outcomes.

A separate concept floated during the session: Councilmember Kevin Flynn said he and another councilmember are "exploring the idea of removing single unit as a use by right" in certain residential districts so that new single-family construction would not automatically be permitted where higher-density zoning exists. Staff and Flynn stressed the concept is an early, informal idea for future committee discussion and public outreach, not a drafted ordinance.

Staff said some building types (double duplex, cottage-core) appear most feasible under the affordability bonus, while fourplex models struggle because of higher construction and code costs; the analysis also indicated required building-code changes and condo-defect law adjustments may be needed to make several options more viable. The consultant projected pieces of the feasibility analysis will be released this summer, with draft reports aligned to June and August milestones.

Next steps: staff will continue modeling urban, urban-edge and suburban contexts, publish feasibility outputs this summer, and begin a community meeting series (starting at Highland and Cook Park recreation centers) to solicit public input. Councilmembers urged colleagues and staff to publicize the meetings widely so residents can weigh in on trade-offs and potential safeguards against displacement.