New housing project in Santa Fe Arts District taps into Denver’s micro-apartment trend
Denver’s Santa Fe Arts District will be home to a new housing project of furnished micro-studio apartments in 2024. The project’s developer wants it to be part of the solution to affordable-housing woes faced in the metro area and nationally.
“Our cities are really just getting more and more unaffordable as time goes by,” said Alfonso Medina, cofounder and CEO of housing company Madelon Group, in a telephone interview. “Denver is the perfect example. Up until last year, it was the city with the highest rent increases for the past 10 years.”
He isn’t alone in his idea. Micro-apartments, or smaller units deemed the “tiny homes” of apartment living, have cropped up around the nation in recent years. New York City, Boston, Washington, D.C., Seattle and more have jumped on the trend, often targeting single, young renters. However, micro-living isn’t a strictly American phenomenon – other countries with packed metropolises, such as China, Japan and South Korea, offer similar accommodations, like cubicle flats and “three-mat apartments.”
“We are making crucial steps forward in our effort to bring more quality living spaces to major metropolitan areas and other high-barrier-to-entry markets across the U.S.,” Medina said.
In Denver, his new housing project would join several other micro-apartment developments.
The Economist, in Uptown at 1570 and 1578 Humboldt St., opened its doors in 2018, offering 97 units with floor plans from 253 square feet to 547 square feet. That was the same year that Ride at RiNo began welcoming residents to its 84 apartments at 3609 Wynkoop St. In 2020, Barry Hirschfeld and developer Pando Holdings finished constructing Studio 135, a 37-apartment building in the Cherry Creek North neighborhood at 135 Adams St.
One argument against micro-apartment buildings is that they “may violate density controls and building codes in some parts of the country,” according to LP Building Solutions, a building materials manufacturer. “Some critics still believe the trend is the result of developers exploiting an out-of-control market.”
Issues caused by the scarcity of cost-effective housing are dealt with across the U.S., with a shortage of more than seven million affordable homes for around 10.8 million “extremely low-income families,” according to the National Low Income Housing Coalition.
That problem is felt profoundly in Colorado. The national average rent for a one-bedroom is $1,684, according to rent.com’s rent report for March 2022. Meanwhile, that average in Colorado is $1,895 for 2021, soaring from $1,634 in 2020.
Medina is aiming to offer a lower monthly rent of around $900 to $950 for the new micro-studios. Saving money on the project through reduced construction or financing costs translates to benefits for his future tenants, he said.
The venture is meant to help address Denver’s problem with “shadow homelessness,” which involves people who are housing insecure, said Minyoung Sohn, founder and director of Blue Room, a startup private investment company partnering with Madelon Group on the project.
Sharon Schneider, president of Blue Room’s housing initiative, pointed to a “huge number” of homeless college students in the city. Her team noticed “a major hole in the market” for affordable housing options, she said, adding that rentals listed in Denver for $1,000 monthly or less often elicit “one-star reviews on Google,” with issues like mold and poor maintenance.
As a result, there’s “huge demand” for their micro-studios, said Schneider, who’s already received unsolicited emails from interested parties. Both smaller and micro-units tend to outperform traditional apartments in the market, with higher occupancy rates and “significant rental-rate premiums,” the Urban Land Institute reported.
The new Denver housing project will result in a five-story, 40,000-square-foot building, with 64 prefabricated micro-studios at 400-square-feet each. Production, which will be handled by nonprofit factory indieDwell in Pueblo, is set to start this year.
The micro-studio will consist of a bathroom, kitchenette, storage and closet space, a full-size bed, a living area with a sofa and table, among other features. The building will also include a retail space on the first floor.
Schneider’s vision for future micro-apartment living in Denver means dozens of similar buildings, which could help the supply problem and alleviate pressure on the housing market.
“Our ultimate vision is to not just build one successful building, but to have enough of them that you can start to make a dent,” she said in a telephone interview.