Housing Scrapes: Signs of Economic Vitality or Withering Neighborhoods?

Residential scrapes are back in Denver, as ever-larger homes join tidy rows of bungalows on all sides of the city. While they're hitting levels that haven't been seen in a decade, they've been the source of controversy for their impact on gentrification and historic preservation.
It seems everyone wants to live in the heart of Denver, but no one wants to cram their lives into the smaller, aging housing stock the city has to offer -- and that's leading to a lot of developers scraping old houses to build larger, more contemporary homes.
It's a phenomenon that's occurring throughout the West, where houses being built today are 39 percent larger than they were in 1973, according to data compiled by the U.S. Census Bureau, which notes that market demand and escalating land costs are forcing developers to build bigger houses to ensure their deals are profitable.
"We're seeing a growing trend and demand in the market for single-family homes that provide more square footage than the older homes we have in our neighborhoods," says Caryn Champine, director of planning services for the City and County of Denver. "The market is really calling for more square footage than the smaller bungalows that were originally built."
The number of demolition permits the city issues annually fluctuates with the health of the economy. During the mid-1990s, slightly more than 100 demolition permits were filed annually. That number rose to just under 400 by 2007, then plunged to 92 in 2011 during the economic downturn.
Over the last two years, as the real estate market has recovered, the number of demolition permits is back up. In 2014, there were 373 demolition permits issued; 326 in 2015; and 318 as of the end of October.
Some neighborhoods are seeing more activity than others. Centered on University of Denver, the 80210 ZIP code had 130 permits issued in 2015 and 2016, the most of any ZIP code in the city, followed by 80211 in northwest Denver at 127.
Communities in contextSmall homes are typically replaced by much larger homes.
The furious pace at which new homes are being built these days has many people concerned that developers are scraping away the city's character and not respecting the context of the neighborhoods.
"The neighborhoods are just being destroyed," says Cynthia Kemper, a resident of the Mayfair neighborhood where she says scrapes are prevalent. "Builders aren't honoring the homes next to them. No one is saying people can't do scrapes or pop-tops. What we're saying is look at what's around it and don't destroy the continuity, the context or the feel of the community."
But Champine says that the city's codes don't have provisions that dictate the scale of a new house based on the size of the home next door.
"We had that conversation [during the zoning update] in 2010, but at the end of the day, there was no support to have an adjacent home trigger restrictions on a new home being built," Champine says. "Property rights were held very dear during that process."
Though not all homes are eligible for historic designation, every time an application for a demolition permits is filed, the property is reviewed by staffers at Landmark Preservation, the city's historic-designation arm, to ensure the building being razed isn't historically significant based on its design, previous ownership or location. And as long as the structure is at least 30 years old, anybody can apply to have it designated historic, which would prevent it from being razed. Of the more than 600 demolition requests and applications for non-historic status filed this year, city staff found that 27 were potentially eligible for historic designation.
Under the city's ordinance, any three people who live or work -- they don't have to be residents -- in Denver and pay an $875 fee can apply for historic designation. A single councilman or the city's director of Community Planning and Development also can apply to designate any building constructed before 1986 as historic -- a move that's become known as "hostile" designation among those who believe it violates the property rights of the person who owns the building.
"Denver's Landmark Preservation ordinance is broken and ripe for abuse," says Matt Rork, a real estate attorney at Fairfield and Woods. "As we have seen over the past several years, those opposed to development in the city have realized that they can interfere with a property owner's legitimate right to sell or develop their property by filing a historic designation application with the city's Landmark Preservation office against the property owner's wishes."
That's what happened to Judith Battista, who wants to sell her Jefferson Park home to a developer. But her councilman, Rafael Espinoza, submitted an application for historic designation, claiming the Queen Anne-style home built in the 1880s is historically significant because it was the childhood residence of well-known Denver architects Burnham and Merrill Hoyt. After months of fighting Espinoza's application, Battista prevailed, with the Denver City Council voting 7-4 to reject landmark status for her home.
"Most Denver residents do not realize when they purchase an older home in the city, outside of a designated historic district, that their homes are subject to such a questionable process and that the whims of a select few individuals can result in the loss of their property rights," Rork says. "The ordinance was meant to preserve structures that truly merit historic designation. What it has turned into is something entirely different."
Once an application for non-historic status has been submitted to Landmark Preservation, the building is posted on the agency's website for 21 days for comments.
Alternately, someone can bring forward an application for historic designation. If a notice of intent to file a designation is submitted within 14 days of the posting, the posting period is extended to 28 days. If the posting period elapses without an application for historic designation, the building is issued a Certificate of Non-Historic Status.
The 2006 ordinance requires that city staff review all demolition and Certificate of Non-Historic Status applications to determine whether a building has potential for landmark designation and post its findings. If they determine that it has potential for historic designation, the application goes before the Landmark Preservation Commission before moving on to the council's Land Use, Transportation and Infrastructure Committee. If the committee approves it, it goes before the full council for a vote.
Landmark Preservation ensures the building being razed isn't historically significant.Gentrification and displacement
The scrape-and-build-bigger trend also raises concerns about the affordability of homes in traditionally working-class neighborhoods. As property values rise, so do real estate taxes. There is also the issue of the cost of repairs and upkeep of the aging housing stock in many of the city's older neighborhoods.
"The whole issue of gentrification is front of mind," says Tracy Huggins, executive director of the Denver Urban Renewal Authority (DURA). "There's a lot of concern right now in Globeville/Elyria-Swansea about displacing the people who are there."
DURA provides very low-interest loans for qualifying low- and moderate-income Denver homeowners to make emergency repairs or needed improvements to their homes. The agency has managed the program for more than 30 years, assisting more than 15,000 homeowners through two programs: the Single-Family Rehabilitation (SFR) Program and the Emergency Home Repair (EHR) Program.
The SFR Program provides low- or no-interest loans for essential home repairs such as roofing, heating, electrical, plumbing, insulation, windows, floor coverings and kitchen cabinets. The EHR Program provides similar assistance for emergency situations such as a leaking roof, hazardous furnace or sewer system failure that need immediate attention.
"This helps the forgotten people, not the homeless," Huggins says.

Photos by Kara Pearson Gwinn.

Read more articles by Margaret Jackson.

Margaret is a veteran Denver real estate reporter and can be contacted here.
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