Suburbs: Direct Competition from Denver (May 24, 2002)

It's not as cheap to live downtown as it used to be. Other land uses, such as parking lots, help choke out lower-income businesses and housing. Denver's land values have been appreciating through the 90's, making parking lots more susceptible to replacement by luxury condo towers, (which has been happening quite a bit in the last 10 years), but let's face it: Denver has yet to completely fill a lost market for cheaper housing. The central business district needs many more full time apartment owners, rather than just loft owners who have primary residences in the suburbs. Don't get me wrong, there are apartment towers downtown, and there's even a vacancy rate suggesting that the apartment market is being adequately met. I still say that Denver needs more cheap apartments, though.

Denver is currently experiencing high growth - 1 million new residents in the next 20 years - but only a small fraction of that incoming population is going to locate in the city of Denver. (~20% according for forecasts). That means a fill 80% of the population boom will occur in the existing suburbs or new fringe suburbs that will be created. This needs to be changed. Denver needs to find out what makes the suburbs attractive to new residents, and it needs to actively and aggressively compete with the suburbs in those areas. For example, a large amount of growth is expected to occur around the new E-470 highway near DIA. Clearly there are a few attractions to this new area.

1) The first and foremost is that the fact that this area is wide open land will make new houses relatively cheap and large compared to Denver City. (More house space per dollar spent, i.e. more bang for your buck).

2) The second attraction is new infrastructure. Even though there is no straight shot into downtown near DIA, there is a brand new highway there that will make growth more possible.

3) Proximity to Denver International Airport, and new airport-related office parks, such as Gateway.

How can Denver compete with this? In my opinion, it already has pretty much, but there's one thing lacking. Cheap, large housing. Larger homes are out of the question, because large homes cost enormous amounts of money in areas that have high land values, such as Denver City and downtown. Therefore, Denver can only compete in the cost area. If Denver encourages the development of new, architecturally interesting and well-done apartment towers downtown, (ones that look as elegant on the exterior as the "luxury" towers), then it has already provided housing that is as cheap or cheaper than fringe suburban housing. Making the towers look more upscale than a typical high-density low-income tower would help attract incoming residents to the apartment lifestyle. In short, developers should put some pride in their towers, and make large, interesting towers buildings rather than nondescript monoliths. Furthermore, Denver could encourage the creation of smaller 4 or 5 story town homes and row houses typical to San Francisco and Boston's Back Bay for the upper-middle class incoming residents, who would probably purchase a large house in the suburbs rather than living exclusively in a luxury loft. Current apartment vacancies may not warrant the creation of tons of new towers, but doing so could create induced demand - much in the way that creating a freeway encourages people to drive rather than take a train. Induced demand would be created by a more active and vibrant downtown that is more attractive to live in as more people populate the area (unless the incoming residents are the hermit type), and creating an apartment glut could also lower rent rates to further create cheap housing. In other words, rather than just letting apartment construction only reflect demand, construction should both reflect and influence demand. After all, a diverse offering of different types of apartments downtown is more appealing than a few nondescript towers.

Denver easily has the competition beat when it comes to infrastructure. The highways may be more crowded downtown, but the enormously reduced commute distances more than compensate for that fact. Furthermore, there are many more transportation options, such as light rail, more frequent bus routes, and taxis. Everything is closer, and simply put, the transportation situation improves the closer you are to downtown.

As for the "proximity" advantage that the suburbs can offer to office parks, Denver dominates in this area as well. Denver has proximity to more shopping, (16th st, Pavilions, Tabor Center, Larimer Square, and the impressive-by-any-standard Cherry Creek Shopping Area), and contains the largest office collection by far in the entire state- downtown. Denver also has better museums and libraries, and contains exclusive venues such as sports arenas, an aquariums, a zoo, and a theater district with a large performing arts center. Simply put, Denver has the rest of the metro beat when it comes to proximity and convenience.

If Denver would make downtown more accessible in terms of housing, I guarantee many more people would choose to have more in their neighborhood than an airport and a freeway. More aggressive competition in the form of attractive apartments should start now.

Downtown Retail (Mar 11, 2002)

I read in the newspaper today that Downtown Denver's retail amenities have grown a lot in the past decade, (and still are), but they pale in comparison to other metropolitan area shopping districts, such as Cherry Creek, which is only three miles away. Downtown retail has many restaurants, dedicated to serve office workers at lunch, but other types of retail shops are more scarce.

This situation can only improve in the future, because the downtown area will be gaining a huge number of residents in the near future (possibly enough to double the downtown population in 5 years). This will affect the retail because there will be a large enough population base to support many different types of specialty shops, because there will be more demand from permanent residents for shopping. As is the case with many cities, before the "invention" of the suburb, the downtown area used to be the primary shopping hotspot in the region. People would get dressed up and spend a weekend shopping in the first half of the 20th century, but nowadays they go to the malls in the suburbs to do their spending. Malls have therefore taken a lot of the retail population base from downtown areas that used to come from the suburbs, which means that downtowns these days depend almost entirely on their own populations to support their shopping. (Unless they build fancy downtown shopping.)

Denver has realized this, and its already growing shopping districts will become even more impressive as it gains a larger downtown population. The challenge for most cities during the past decades and into the future is preventing the downtown areas from become daytime office centers and nothing more as the population moves to the suburbs, and Denver is definitely making strides to avoid that situation.