If a proposed overlay district in West Highland is accepted, RedPeak would not be able to develop this 5-story building on Meade Street, just north of West 32nd Avenue.

Vote on the overlay at the end of this blog.

When the Denver City Council in June 2010 rezoned three parcels near Highland Square  to allow five-story building to be constructed on them, it also made another significant zoning change to the main commercial artery in the heart of West Highland.

As part of the first major overhaul of the city’s zoning code in more than a half-century, the City Council also unanimously  rezoned much of the popular West 32nd Avenue corridor to U-MS-3 from B-2.

U-MS-3 allows a maximum of three-story buildings in an area that primarily has one-and two-story building with the historic charm of similar strips along Gaylord and Pearl streets near Washington Park.

Some West Highland neighbors are concerned that the new zoning could result in those older buildings being scraped and replaced with taller buildings.

Overlay

In January, the West Highland Neighborhood Association narrowly adopted a resolution to limit the height of buildings between Irving and Perry street and West 30th and West 33rd Avenue to a maximum of 35 feet. That geographic area encompasses the three parcels where Denver-based RedPeak Properties has proposed developing the luxury apartment development with about 150 units. One parcel, on Lowell Boulevard, includes the former Beth Eden Baptist church, which RedPeak plans to incorporate into its energy efficient apartment community. The other two parcels are on Meade Street and West Moncrieff Place.

However, what has gone  unreported, until now, is that the previous zoning allowed much taller buildings along much of West 32nd Avenue than the current U-MS-3 zoning.

B-2 a downzoning?

For the most part, the B-2 zoning allowed structures as tall as 75 feet along West 32nd, according to Rachel Chaparro, who answered questions regarding the former zoning posed by InsideRealEstateNews.

“Under the old code, most if not all the B-2 zoned properties along  West 32nd Avenue were in what the old code called “controlled districts” because of their adjacency or proximity to R-0, R-1, or R-2 residentially zoned properties,” Chaparro wrote in an email.

“A controlled district, when across the street or behind a residential zone (up to 175 feet), triggers a maximum height limit of 75 feet and a bulk plane of 10 feet with a 45 degree angle at the closest property line,” she continued. “In this case, it is likely that most of the properties would have been subject to this height limit and bulk plane.”

This building was constructed on West 32nd Avenue under the former B-2 zoning.

Some opponents to the zoning change have implied that the former B-2 zoning allowed a maximum of two stories, and U-MS-3 is an “upzoning.” However, it could be argued that going from 75-foot tall buildings to a maximum of three stories is a major downzoning. Also, the overlay district would not prevent older structures to be razed and replaced with buildings up to 2.5 stories.

Similarly, some people initially thought that the former R-4 zoning on the parcels that RedPeak has under contract allowed a four-story height limit. R-4, however, described what is known as the “floor-area ratio” or FAR. In that case, it allowed the maximum square footage of new buildings to be four times the size of the parcels. RedPeak is proposing to develop three buildings far less in total square footage than the approximate 250,000 square feet allowed under R-4. An investment group headed by Tom Wootten paid a little more than $2.8 million in 2007 for those three parcels, with a total size of  62,150 square feet, public records indicate.

But the “2” in B-2, had nothing to do with height or FAR.

“The “2″ in the “B-2″ did not relate to anything substantive like building height in stories or how much allowed FAR …but was simply part of the consecutive numbering of the city’s business zones (i.e., B-1, B-2, B-3, B-4, B-5, B-7, B-8, etc.),” Chaparro explained.

Right zoning at right time

She said that U-MS-3 is the correct zoning for the popular strip.

“There was a change in zoning from B-2 to U-MS-3 because the U-MS-3 zone district was an appropriate district that fairly acknowledges the range of building scale/height allowed under the previous zoning entitlement,” Chaparro said.

She went on to say that the “U-MS-3 choice was consistent with our adopted plans for 32nd and Lowell as a neighborhood commercial shopping district, and fairly acknowledged existing conditions on the ground.”

A proposed overlay district is designed to protect buildings such as this one along Lowell Boulevard and West 32nd Avenue.

Marie Benedix, the author of the overlay district proposal, did not respond to inquiries from InsideRealEstateNews. However, a representative for Benedix has had one “pre-application review request” meeting on the overlay district, said city planner Tina Axelrad.

“The next step would usually would be to submit an application,” Axelrad, a Principal City Planner, said. “That hasn’t happened yet. Sometimes people submit applications after a pre-application and sometimes they don’t.”

Axelrad said she didn’t know how many buildings – commercial and residential homes – are in that proposed overlay area. Most of the homes in the area already have a maximum height of 30 feet.

There is a cost to filing an application, based on the size of the district. The first acre costs $1,000 and every subsequent acre costs another $500, Axelrad said. She said she did not know the size of the proposed district, and wouldn’t venture a guess, as the boundaries could always be changed.

Eventually, to go into effect, the overlay would likely require a “super-majority” of the City Council to approve it, if 51 percent of the property owners in the district opposed the district.

Separately, a group called Friends of Highland Landmark has sent a letter to the Landmark Preservation Commission saying the Beth Eden church had been given “non-historic status,” based on “insufficient evidence.” Marilyn Quinn, in the letter, said her group has reviewed “readily available public records” that show buildings on that stretch of Lowell meet the criteria for historic designations and “should not be demolished without a more thorough review.”

Larry Ambrose, who has unsuccessfully run for City Council in the past, has been a strong proponent of overlay districts in Denver since the early 1980s.

Under the B-2 zoning, anyone trying to build a 75-foot tall building would have ended up with a “very small, skinny tall building,” he said.

In any case, whatever the previous zoning allowed is “completely irrelevant,” Ambrose said.

“Clean slate”

“We started with a new, clean slate,” Ambrose said. “The first thing that Mr. Peter Park (the city’s planning director under then Mayor Hickenlooper’s administration during the zoning change), said is that this is not going to be perfect and we can always come back and change it – tweak zoning – later.”

He then alluded to the RedPeak project.

“Five-story buildings are not appropriate next to one-story buildings – they just are not.”

Some people have said that after the new zoning took place in June 2010, there was a period to ask the city to review its decision, and no one took any steps to ask then District 1 City Councilwoman Paula Sandoval to try to change it.

“I don’t know about that,” Ambrose said. “I would say we were all sold a bill of goods.”

InsideRealEstateNews asked him if he thought the U-MS-3 zoning would increases the likelihood of buildings with historic character to be razed, when very few property owners did so under the B-2 zoning.

“It depends,” Ambrose said. “If we came back 100 years from now, I would say absolutely. Ten years from now – maybe yes, maybe no. It would depend on how hot the area becomes, how many people move here and their income levels. The point is that someone could do it and it would change the landscape and the character of the neighborhood.”

Contact John Rebchook at JRCHOOK@gmail.com.

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This 2,577-square-foot home in Lakewood is on the market for $272,500, very close to the average price of a home sold in January.

It might not be a good time to be in the “For Sale” sign business – at least not in the Denver area.

The number of homes for sale in the Denver area plunged by a record 41.6 percent in January from January 2011, shows a report released today by independent broker Gary Bauer.

At the end of last month, there were only 10,443  unsold homes on the market – 8,356 single-family homes and 2,087 condos – compared with a total of 17,890 homes on the market in January 2011. It was the lowest number of unsold homes on the market in a January since 2001, when there were 9,540 unsold homes on the market.

Bauer said he wasn’t surprised by the dramatic drop. “I actually thought it was going to drop more,” he said. “I thought it would fall to 10,000.”

The inventory of unsold homes also fell by 5 percent from December, when there were 10,993 unsold homes on the market, according to Bauer, who bases his monthly housing report on Metrolist data.

“We were looking at those numbers this morning,” said Bruce Alexander, president and CEO of Vectra Bank Colorado. “There is only a 3.3-month of supply of homes on the market, which is unbelievable.”

Builders may help fill void

With relatively few new homes being constructed, and a dearth of resale homes on the market, is only a matter of time that home prices will start to rise, he said.

“Homebuilders are starting to make a move,” to build more homes to fill a void created by the lack of resale home, Alexander said.

And while year-over sales activity was strong – under contracts rose by 10.8 percent from January 2011 and closings increased by 14.6 percent, the overall housing market showed a drop in prices.

“You can tell we have really hit bottom,” and houses should start to appreciate, he said.

The average price of a home sold in January was $272,328 compared with $277,922 and $275,610 in January 2011 and December, respectively. The median price of a home  also was down to $218,855 in January from $225,00 in January 2011 and $230,000 in December.

But that doesn’t tell the whole story, Alexander said.

“That is true in the aggregate, but what I think you need to do is look at price point strata,” Alexander said. “My sense is there is a lot of demand for homes priced under $300,000, while when you look at homes priced at $1 million or above, they are selling for 30 percent or 40 percent from where they sold at the peak of the market.”

Doug Kincaid, of the Kincaid Realty Group with RE/MAX of Cherry Creek, said the low inventory is good or bad, depending on whether you are a buyer or a seller.

Listings needed

“It’s been a little bit of a problem for some buyers to find a home,” Kincaid said. “But three years ago, when we had a glut of homes on the market, buyers had an inability to make a decision because they were so overwhelmed with choices. But now is a fabulous time to be listing your home. I’m coaching people to get their homes on the market now, when there isn’t much competition.”

Peter Niederman, CEO of Kentwood Real Estate, described the inventory as “painfully low.”

Yet, he was pleased to see 3,486 homes placed under contract last month, a 23.1 percent increase from the 2,832 in December, and a double-digit jump from the 3,147 in January 2011. The 2,470 closings in January were down 21.7 percent from December, but up substantially from the 2,156 in January 2011. Closings represent housing activity from previous months, so they are a lagging indicator of the health of the housing market.

But home showings are a leading indicator, and those have been strong, Niederman said.

“Brokers are busy showing homes and a lot of contracts are being written,” Niederman said. “I think there is a little bit of urgency with buyers, especially for conforming loans below $417,000. That means homes that are selling as much as $450,000 to $500,000.”

One nice thing is that while sales are softer at the high end, there is activity in all price points.

“We’re seeing traction across the market, which was not true a couple of years ago, when most of the activity at the lower end.”

Stable stock market helps

He also said that the relative stability in the stock market bodes well for home sales.

“It has a psychological effect when there are these wild swings – down 300 points one day, up 500 points the next. Even if it results in a net gain of 200 points, it unsettles people to have such violent swings. We’re only six weeks or so into the new year, but so far the financial markets have been fairly stable and steady.”

While all markets are local, and Denver is doing better than most of the country, Niederman said the global economy is the wild card.

“I think if we were just talking about the U.S., we are moving in the right direction with unemployment dropping, which will lead to more consumer confidence. But global events are something we have no control over, but they still impact local markets. Right now, people are focusing on Greece. Who knows what will be next? I don’t want to sound like a cliche, but I am cautiously optimistic about Denver’s housing market. I think we’re going to see a 3 percent to 5 percent increase in sales and dollar volume this year over last year.”

Contact John Rebchook at JRCHOOK@gmail.com

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Under the terms of the settlement, Colorado, which served on the executive committee that oversaw the settlement negotiations, will receive:

• $73.3 million that will be available to grant principal reductions on loans to make a modification possible. Approximately 40 percent of these funds will also be available to ease the effects of foreclosure, including waiving deficiency balances, enhanced cash-for-keys payments and blight prevention.
• $52.5 million in cash to the state.
• $46.3 million worth of refinancing benefits to underwater borrowers.
• $32.49 million in payments to homeowners who lost their homes to foreclosure between January 1, 2008 and December 31, 2011

“This agreement delivers real help to homeowners affected by the banks’ dual tracking and other improper mortgage- and foreclosure-related processes,” Suthers said. “As a result of this settlement, the banks will end a series of problematic processes that put homeowners at a severe disadvantage during the foreclosure process. This settlement will not solve every problem with the housing market, but it goes a long way to helping homeowners in distress now and leveling the playing field for consumers.”

The five banks are Bank of America, JPMorgan Chase, Wells Fargo, Citigroup, and Ally Financial.

Nationally, the banks have agreed to:

• Commit a minimum of $17 billion directly to borrowers through a series of national homeowner relief options, including principal reduction. Given how the settlement is structured, servicers will actually provide up to an estimated $32 billion in direct homeowner relief.
• Commit $3 billion to a mortgage refinancing program for borrowers who are current, but owe more than their home is currently worth.
•  Pay $5 billion to the states and federal government ($4.25 billion to the states and $750 million to the federal government).
•  Provide homeowners with comprehensive new protections through new mortgage loan servicing and foreclosure standards.
•  Be overseen by an independent monitor will ensure mortgage servicer compliance.

The settlement is the second largest multi-state consumer protection enforcement settlement after the 1998 tobacco litigation settlement. This agreement is the result of a massive civil law enforcement investigation and initiative that includes state attorneys general and state banking regulators across the country and nearly a dozen federal agencies. It holds banks accountable for past mortgage servicing and foreclosure fraud and abuses and provides relief to homeowners. With the backing of a federal court order and the oversight of an independent monitor, the settlement stops future fraud and abuse.

Customers of the five settling banks who lost their homes to foreclosure between Jan. 1, 2008 and Dec. 31, 2011 may be eligible for restitution under the settlement. The independent, third-party administrator of the settlement hopes to contact affected victims by the end of the summer. Customers of the five settling banks who are still in their homes but either behind on their payments or underwater should contact the banks directly through dedicated toll-free contact numbers to determine if they are eligible for assistance:

• Bank of America – 1-877-488-7814
• Chase – 1-866-372-6901
• Citigroup – 1-866-272-4749
• GMAC/Ally – 1-800-766-4622
• Wells Fargo – 1-800-288-3212

Contact John Rebchook at JRCHOOK@gmail.com

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Last week, members of  No High Rise in West Highland and RedPeak Properties separately met the Denver Post editorial board regarding plans for five-story, luxury apartment buildings proposed to be constructed in the heart of Highland Square.

Today , the Post ran an editorial in favor of the zoning that allows the buildings on three parcels north of West 32nd Avenue on property that RedPeak has under contract.

Under the headline, City must honor its zoning code, the Post urged councilwoman Susan Shepherd not to introduce an ordinance that would down-zone the three parcels, which are on Meade Street, Lowell Boulevard and West Moncrieff Place. This week, the West Highland Neighborhood Association urged Shepherd to introduce such legislation, even though other council members say it is unlikely she would get the 10-vote super-majority for it to pass. The No High Rise group also has repeatedly asked for Shepherd’s decision on the downzoning, which some members note is long-past her self-imposed deadline.

“Shepherd should resist this idea, as even the threat of down-zoning would be a terrible precedent…Downzoning would send tremors though the business community and signal that Denver’s zoning laws could be shredded or challenged according to political convenience,” the Post editorial said.

The editorial went on to say that “concessions and adjustments” offered by RedPeak have not satisfied “critics at No High Rises in West Highland.” RedPeak, for example, is considering lowering the height of the luxury apartment building on Moncrieff to four stories. The Post editorial said members of the No High Rise group “appear to exaggerate, beginning with their name. Since when is five stories a “high-rise?”

To read the entire editorial, please visit this link.

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The average rent for the region was up from $738 reported during the fourth quarter of 2010, and was down slightly from 2011’s third-quarter average rent of $778, shows the report by the Colorado Division of Housing and the Apartment Association of Southern Colorado.

The median rent rose year over year to $742 during the fourth quarter, rising 4.3 percent from 2010’s fourth-quarter median rent of $711. The average rent increased in all types of apartments measured, including all types of units from efficiency apartments to three-bedroom apartments.

The average rent also increased year over year in all sub-markets measured during the fourth quarter in all areas except the Central region where the average rent fell 1.8 percent to $699. The average rent increased the most in the Southeast region where it increased 12 percent year over year to $708.

“We generally expect the rent to drop off a bit during the fourth quarter,” said Ron Throupe, a professor of real estate at the University of Denver’s Burns School of Real Estate and Construction Management, and the report’s author. “Comparing year-over-year, however, we’ve now seen two years of solid rent growth in Colorado Springs.”

Average rents for all market areas were:

• Northwest, $819.
• Northeast, $742.
• Far Northeast, $900.
• Southeast, $708.
• Security/Widefield/Fountain, $615.
•  Southwest, $797.
•  Central, $699.

The apartment vacancy rate in the Colorado Springs metro area fell year over year to 6.7 percent during the fourth quarter of 2011, falling from 2010’s fourth-quarter vacancy rate of 7.2 percent. The fourth-quarter rate rose from this year’s third-quarter rate which was 6.2 percent.

The vacancy rate declined year over year in the Northeast, Far Northeast, Southeast and Security/Widefield/Fountain areas of Colorado Springs, while the vacancy rate increased during the same period in the Northwest and Central areas. The vacancy rate was unchanged in the Southwest area.

“Due to seasonal issues, the vacancy rate moved up a bit during the fourth quarter, but it was the lowest fourth-quarter vacancy rate for the metro area since the year 2000,” said Ryan McMaken, a spokesman for the Colorado Division of Housing. “The region saw some job growth during 2011, and that, coupled with little new multifamily construction, has sent the vacancy rate down to a 12-year low.”

Vacancy rates for all market areas were:

• Northwest, 6.8 percent.
• Northeast, 5.3 percent.
• Far Northeast, 6.5 percent.
• Southeast, 9.6 percent.
• Security/Widefield/Fountain, 10.7 percent.
•  Southwest, 5.4 percent.
•  Central, 7.1 percent.

Apartment Realty Advisors is also a major sponsor of this report. The Vacancy and Rent Surveys are a service provided by the Colorado Department of Local Affairs’ Colorado Division of Housing and the Apartment Association of Southern Colorado to renters and the multi-family housing industry on a quarterly basis.

Contact John Rebchook at JRCHOOK@gmail.com

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This Denver home sold for $2.56 million in January.

The Denver-area million-dollar home market started the year on a strong note.

A report released today by the Kentwood Real Estate Co. shows that 39 homes in the Denver area closed in January, a 14.7 percent increase from the 34 in January 2011.

The dollar value was up almost 13 percent to $56. 2 million compared with $49.8 million a year earlier.

Although the number of sales isn’t huge, they are moving in the right direction, noted Carol Ihli, marketing director for Kentwood.

She said that it appears that people putting their luxury homes on the market are still asking too much money when they initially list them.

“The sellers are coming in about 10 percent to 17 percent too high,” Ihli said. “When they sell them, they typically are selling them from 10 percent to 12 percent below their asking price – otherwise they just sit there.”

Let’s make a deal

Despite the disconnect between the buyers and the sellers, deals are being made.

“The buyers and sellers are getting together,” she said. “It appears on the part of buyers there is starting to be some sense of urgency.  They are afraid that new inventory is not going to be hitting the market anytime soon. There is a sense that a lot of people in this price range are not going to put their homes on the market until after the Presidential election.”

Ihli said that the “core” neighborhoods of Denver, from Hilltop to Highland, continue to be stronger than suburban enclaves, such as Cherry Hills Village and Castle Pines.

Rollie Jordan is seeing a lot of activity in Cherry Creek.

“I also think Cherry Creek is really beginning to pop,” she said.

Indeed it is, according to Kentwood broker Rollie Jordan. Jordan closed $7.75 million in deals in Cherry Creek in December and has closed another expensive home in January.

“I think Cherry Creek has definitely come back,” Jordan said.

The $7.75 million tally includes a 12,000-square-foot lot for $1.65 million. “It wasn’t on the market,” but Jordan contacted the owner and got him a deal he couldn’t refuse. “It was the last big corner lot in Cherry Creek.” The buyer was not a developer or builder, but someone who is going to construct a home on the lot for his own use. It probably will be “7,000 to 8,000 square feet and real high quality,” Jordan said.

So far this year, she also has closed a duplex in Cherry Creek for $1.25 million and has a single-family home in the area under contract for just over $1.5 million.

Many of her buyers are in the gas and oil energy. “All my buyers are coming from Houston. I think they are here because of the fracking.” Fracking, slang for hydraulic fracturing, allows oil and gas to be extracted from rock formations by injecting fluids into cracks.

She currently is working with three clients relocating from Houston, many of them interested in living in Cherry Creek or the Denver Country Club.

Ihli said the high-end market, as with the overall market, is facing a dwindling inventory.

There currently are 520 homes for sale in that lofty price range. Of those, 63 are under contract or pending, she said. Some of the pending homes are short sales, in which the lender accepts less than the mortgage.

In January, the average price of a luxury home closed was $1.44 million, down 1.5 percent from the $1.46 million in January 2011. The highest price that sold in January was $2.56 compared with $4.8 million in January 2011, a 46.6 percent drop. The Kentwood report includes the counties of Adams, Arapahoe, Denver, Douglas and Jefferson.

Contact John Rebchook at JRCHOOK@gmail.com

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Now, a Westminster-based residential real estate firm has become a Real Living franchise, whose parent is Toronto-base Brookfield Asset Management, which has a market cap of about $20 billion and $150 billion in assets under management. The downtown office buildings are owned by Brookfield Properties Corp., which although publicly traded, is a subsidiary of Brookfield Asset Management. Another  Brookfield company own the high-end Solterra housing development in Lakewood, while yet another has an ownership stake in the Park Meadows mall.

“If you ask anyone in commercial real estate, they will know Brookfield as the owner of Republic Plaza and the Qwest Tower, but they’re probably not that well-known to most consumers,” said Chip Bruss, Network Development Director for Real Living. “But as Real Living becomes more visible, Brookfield will become more of a consumer brand.”

Brookfield Asset Management, he said, has a 45 percent market share in residential real estate in Canada, “but until recently did not have any residential real estate holdings in the US.”

To remedy that, two years ago it bought GMAC Real Estate in the U.S. as well as a Columbus, Ohio-based company called Real Living. “They combined those two companies and merged them into Real Living. Their first action was to give GMAC the opportunity to convert into a Real Living franchise or cancel their agreement. GMAC then went away. There is no more GMAC Real Estate.”

Last year, a former GMAC in Cherry Creek and one in Colorado Springs switched to Real Living.

More recently, Colorado Real Estate Associates in Westminster became a Real Living franchise.

“They are the first one to join the franchise on its own impetus,” Bruss said. “Its new name is Real Living CO Real Estate.”

The firm has 33 brokers.

“Real Living is a powerful, innovative real estate company, and we are thrilled to join its fast-growing national network of offices,” said Jackie Nordstrom, owner of the new franchise. “Our team will be able to tap into the extensive resources, including cutting-edge technology and marketing tools. One of the things that attracted us to Real Living is the strong emphasis on consumer services. And this can be seen within a variety of products and services they provide.”

Real Living has a 96 percent customer satisfaction rating, according to QSC, or Quality Service Certification, which provides independent, third-party ratings, Bruss said.

“Every real estate company says they provide excellent customer service; after all, we are in the service industry,” Bruss said. “But Real Living is the only company that I know of that provides a third-party rating system to verify the response from customers.”

Real Living launched a national website in 2011.

“We wanted to build a consumer website that emulated Realtor.com, which is the No. 1 publicly visited real estate site in the U.S.,” Bruss said.

“Home buyers and sellers are really smart now,” Nordstrom said. “They know what they want and if you don’t give them all the information in one easy to find place, they’ll just get it somewhere else.”

Contact John Rebchook at JRCHOOK@gmail.com

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Only 169 homeowners in Colorado moved into the permanent modification portion of the Home Affordable Modification Program, according to a report released today by the government. Last year, an average of 242 homeowners entered the program each month in Colorado. December was the first time fewer than 200 people had entered the permanent modification program.

On the other hand, the number of people entering the program rose by 10 to 1,005 from 995 in November. While a small number, typically the number of people entering the program drops each month. The Treasury Department has instructed loan servicers to pre-quality people, as initially a large number of distressed homeowners were accepted into HAMP, but were not accepted into the permanent modification portion of the program. Now, the vast majority of the people who begin the program remain in it.

Shannon Peer, housing counselor manager at the non-profit Brothers Redevelopment, wasn’t overly concerned about the drop in the permanent modification. First, it since it is only one month it could be an anomaly, he noted. In addition, he pointed out that sometimes the Treasury Department later revises the numbers, so it is possible that December numbers will end up being more in line with the average.

“Certainly, this will be a number we will keep our eye on,” Peer said. And while the number of people entering the program rose slightly, it is moving in the right direction.

“This is the first time in many months that we have seen any upward movement,” Peer said. “And at some point in Colorado, as people are getting back on their feet financially, we might start seeing more people qualify for the program.”

Initially, the Obama Administration hoped to help three million to four million people with HAMP. So far, about 930,000 people across the country are in the permanent modification plan, far short of the original projections. Just days ago, President Obama said that he would be the “first to admit” the previous programs by his administration “didn’t help as many folks as we’d hoped.”

Still, HAMP has saved people in the permanent modification part of the program about $10.5 billion in reduced mortgage payments. “A lot of people say it cost too much money, and it has been a boondoggle, but they only spent a fraction that was allocated to it,” Peer said. “I think that all of these programs chip away at the problem in different ways. It is good to have a suite of choices to address the problem.”

A few days ago, Obama urged the public to pressure Congress to adopt legislation that would make it easier for borrowers to refinance into historically low mortgage rates. That legislation is anticipated to cost $5 billion to $10 billion in new fees on banks, would help an estimated 3.5 million people. It would require the Federal Housing Administration assume the risk on the loan.

Meanwhile, banks are reportedly close to reaching a settlement with the government for improper loan servicing, which could result in principal reductions for some borrowers. Another program, called the Home Affordable Refinance Mortgage, or HARP, makes it easier to refinance a loan that already is guaranteed by Fannie Mae or Freddie Mac.

Details crucial

Details of what has been dubbed HARP 2.0 are expected to be released shortly.

Peter Lansing, president of Universal Lending, said the devil is in the details. Universal Lending is a sponsor of InsideRealEstateNews.

“Mortgage lenders and real estate agents want to get down to what that means to us and our customers right now,” Lansing said. “We need to know what this will mean for specific borrowers and homeowners. We need to know the nitty-gritty of it. We listened to what the President said in his State of the Union address and were very attentive, but now we need to know how it is going to work.”

He also said that every program, even if the intentions are good, can have unintended consequences.

“It’s like you have a big fire and you throw a bunch of water on it. Sometimes you will put out the fire and be left with a lot of water damage.”

Month	Active Trials	Permanent Modifications
January 2010	11,708	1,797
February	11,707	2,613
March	10,929	3,422
April	8,932	4,355
May	6,423	4,960
June	4,870	5,147
July	3,329	6,124
August	2,555	6,469
September	2,216	6,660
October	2,002	6,885
November	1,853	7,134
December	1,876	7,369
January 2011	1,762	7,587
February	1,658	7,827
March	1,597	8,222
April	1,619	8,464
May	1,520	8,801
June	1,378	9,093
July	1,274	9,364
August	1,257	9,581
September	1,121	9,917
October	1,065	10,104
November	995	10,324
December	1,005	10,493

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An early elevation of RedPeak's luxury apartment building along Lowell Boulevard.

Mike Zoellner, the top official at Denver-based RedPeak Properties, on Friday confirmed that his company is studying voluntarily down-zoning one of the three luxury apartment buildings it plans to develop in the Highland Square area to four stories instead of the five stories allowed under the current zoning.

RedPeak, facing heated opposition from some neighbors since last fall, initially planned to develop three, five-story buildings on Meade Street, Lowell Boulevard and West Moncrieff Place, just north of West 32nd Avenue.

Now, however, RedPeak is considering building a four-story building on Moncrieff Place, while keeping five stories on the other two parcels. InsideRealEstateNews first reported that was a possibility a week ago.

RedPeak also pointed out that the heights of the proposed buildings are below the 70 feet maximum allowed under the current U-MS-5 zoning.

The tallest building, at 62 feet tall to the top of the parapet, would be on Lowell, next to the existing church that would be incorporated into the new apartment community. The Meade building would be 56 feet high and the Moncrieff building 46 feet high.

The new buildings would not be as tall as the 65-foot tall church; the 68-foot tall condominium building at the corner of Lowell Boulevard and West 33rd Avenue; and the nearby 12-story Eden Manor at West 32nd Avenue and Julian Street, RedPeak said.

“The current designs are roughly 50 percent of the allowable building sizes when considering height and floor area,” according to RedPeak.

RedPeak said other concessions and solutions to neighborhood concerns it is offering, include:

• Setbacks from the street that are greater than required under zoning. First-floor units along Meade and Moncrieff would be setback as far as possible from the street to more closely mimic single-family home setbacks. Those units also would have exterior entries and front porches.
• Eliminating roof-top decks to address privacy issues of adjacent neighbors. Instead, it would provide smaller patios on the top floor of the building. Fewer than a dozen of the 150 or so units would have balconies and all of those would be facing the street.
• Provide more parking than required under the zoning and work with Councilwoman Susan Shepherd to create a master-parking plan for a three-block radius around the properties.
• Pursuing a car-share and B-Cycle stations to provide additional transportation options. Bicycle storage at the project will exceed code requirements.

Officials with RedPeak have met with a design advisory board to hammer-out details on 23 concerns – including height, density, traffic and parking impacts.

Members of the board include representatives from Councilwoman  Shepherd’s office; the West Highland Neighborhood Association; merchants along West 32nd Avenue; and the grassroots opposition group, No High Rises in West Highland.

“Shape and improve”

“RedPeak is very excited about the progress that has been made with the design advisory committee,” Zoellner said. “There have been numerous changes that have been made to the design of the project to address the concerns raised by the committee, which has helped shape and improve the overall project.  We have received a great deal of support for the project from West Highland neighbors since the release of the Meade and Lowell building elevations.”

Last week, RedPeak for the first time released preliminary elevations, or renderings, of buildings on Meade Streete and Lowell Boulevard. This week, officials from RedPeak and the No High Rise group presented their cases to the editorial board at the Denver Post.

The No High Rise group since the get-go has been concerned about the height and density of the three buildings on the parcels that RedPeak has under contract from an investment group headed by Tom Wootten.

As far as the density, the Lowell and Meade Street buildings would have 81,000-square feet and 40,780 square feet, respectively. That equates to a 24.4 percent reduction from the 53,970 square feet allowed on the Meade Street site and a 16.3 percent drop in the 96,800 square feet allowed on Lowell. RedPeak has not yet released the square footage for the down-sized Moncrieff Place building.

The maximum number of units on the three properties would be about 200 units, while RedPeak is planning 140 to 150.

Before the property was rezoned to U-MS-5 from R-4 in June 2010, Denver-based Mercy Housing considered buying the property for affordable rental housing. Mercy Housing planned to develop buildings to the maximum density allowed under R-4. At an average size of 700 square feet per unit, it would have resulted in more than 300 units. Mercy Housing dropped the plans when it couldn’t get financial help from Denver to help finance the project.

Goode: Not a compromise

Laura Goode, founder of No High Rises in West Highland, which now has about 1,800 signatures from supporters, said that RedPeak is not offering enough.

“Clearly, we would still have two five-story buildings,” Goode said. “That is not a compromise.”

A compromise, she said, would be for RedPeak to build three-story buildings on Meade and Moncrieff, and keep a five-story building on Lowell.

She also doesn’t care that the proposed buildings would not be as tall as the church.

“It’s kind of disgusting that they would even compare their building to the church The church is a historic, beautiful building,,” that has been there for more than 80 years, she said.

Asked if height is height, regardless of the use of the building, Goode answered: “No. The church has a steeped-roof and is steeped in the history of West Highland. I’m kind of offended they would compare their buildings to the church. When you are talking about mass that is comparing apples and oranges.”

Councilman Susan Shepherd, who represents the district, did not immediately return a call on Friday.

Downzoning 

But Goode said that she expects Shepherd to keep to an earlier statement she made that Shepherd would seek a legislative action to downzone the parcels on Meade and Moncrieff to three stories. For such a motion to pass would take a super-majority of 10 council votes, as Wootten has said he would oppose a downzoning.

Last week City Council President Chris Nevitt told InsideRealEstateNews he would not support a downzoning and he doesn’t think most council members would, either. Earlier, Shepherd said she was reconsidering pushing for a forced downzoning in light of a recent incident in her home. On the evening of Jan. 16, two women came to her home without an appointment, and after they brought up the possibility of recalling Shepherd, a shouting match occurred.

However, Goode said even if a council vote on the downzoning is doomed to fail, Shepherd should still introduce it.

“In front of the Denver Post editorial board I committed that our organization will not hold (Shepherd) responsible if she could not deliver all of the zoning for downzoning,” Goode said. “But we will hold her responsible if she does not send a message of solidarity to this community and submit the application to downzone.”

Compromise between the neighbors and RedPeak, is in the interests of both parties, said Mark Lee Levine, Professor and Director of the Burns School of Real Estate and Construction Management, Daniels College of Business, University of Denver.

“Just because you have the right to build something doesn’t mean you should build it,” Levine said. “Compromise means give and take on both sides. If the choices are single-family homes or 300 units, you want to meet some place in the middle.”

On the other hand, he said if the neighborhood group draws a line in the sand and says under no circumstances will it allow five-story buildings, the deal may not make financial sense for RedPeak and it is unrealistic for neighbors to expect it to develop a money losing community.

“They may need five stories for the numbers to pencil out,” Levine said. “It’s a tough one.”

Goode and other neighbors have repeatedly said they are not against development, only what they consider irresponsible development, such as five-story buildings in a neighborhood of primarily Victorian-style single-family homes.  They have said that the RedPeak proposal would be appropriate on busier streets such as West 38th Avenue, Federal Boulevard and West Colfax Avenue. However, extremely busy streets typically do not have the cachet to draw renters to luxury apartments such as RedPeak is proposing.

Levine said it is not unusual for neighbors opposing a development to take a similar stance to that of the No High Rise group.

“It sounds to me like a traditional conflict between neighbors and a developer,” Levine said. “They are saying not in my back yard, but it is Ok in somebody else’s back yard. It’s NIMByism. Everybody wants to have New York plays, but they don’t want New York traffic.”

Contact John Rebchook at JRCHOOK@gmail.com

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