Denver’s most influential developers and real estate forecasters will tell you that 2015 has been an incredible year for the city. Additionally, researchers estimate that 50,000 people will move to Denver in the next five years. However, there’ve been some setbacks that have these visionaries concerned for the future of the Denver real estate market.
What Is Holding the Denver Real Estate Market Back?
At the Urban Land Institute “Denver is Booming: But is Design Quality Keeping Pace?” event in August, many designers and architects discussed their concerns for the design quality of the multifamily projects that have been, and are currently, in the works. Many will tell you that Denver has been selective in order to uphold the aesthetic value that makes the city so unique.
With the influx of population over the past few years, it’s difficult to uphold those standards. Further, the general public is demanding affordable, new urbanism development. This demand requires tighter deadlines and leaner budgets. The end result? A lack of design and quality that in a few years will leave people asking, “What were we thinking?”
Not only has design been a concern, many developers are hesitant to expand past multifamily development. Why? Because of the Construction Defects Law.
What Is the Construction Defects Law?
The Construction Defects Law includes almost any condition that reduces the value of a home, condo, or common area that can be legally recognized as a defect in design or workmanship, or a defect related to land movement.
In Denver, the Construction Defects law Statute of Repose is six years, with a two-year extension if a defect is discovered in the fifth or sixth year after substantial completion. The action must be commenced within two years after a defect is discovered.
Many Denver developers have opted against the high-risk investments of building townhomes or condominiums because of the law. Instead, developers are creating multifamily units that can be sold after the repose period as condos.
“Millennials will eventually want to own property,” Mark Tremmel of Tremmel Design Group said. “But with the lack of new condos and townhomes in Denver, it will force the population to move to more suburban areas.”
We can all agree that 2015 was one of the busiest we’ve seen in the past decade. While the market anticipates a slowdown in 2016, there is plenty to keep busy. As we move forward, it is imperative that we preserve the spirit of the Denver with enduring architecture and design.