The 38th and Blake Incentive Overlay

This case study tells the story of a land value capture policy implemented by the City and County of Denver, Colorado in 2017–2018 in the in the River North (RiNo, pronounced “rhino”) district. The policy, known as an incentive overlay, allows developers to construct taller buildings than would otherwise be allowed in exchange for creating affordable housing or paying into an affordable housing fund. The policy creates affordable housing using some of the increases in land value generated by construction of the 38th and Blake commuter rail station; related investments in streets, sidewalks, and other infrastructure; and regulatory changes to allow for commercial and residential use of land previously designated as industrial.

As of February 2021, the incentive overlay produced 95 affordable homes in seven new multifamily projects. About 5 percent of units within these projects are affordable. Several factors have limited both the number and share of affordable homes constructed under the policy, including the design of the formulas used to calculate affordable housing requirements, a lack of developer interest in building taller buildings, the impact of the COVID-19 pandemic, and fewer-than-expected mixed use projects, which would have contained a greater share of affordable housing than all-residential projects. Building on lessons from the 38th and Blake Incentive Overlay, Denver is modifying its approach to land value capture in other parts of the city.

Photo: “Denver Sunset Cityscape.” Copyright Larry Goodwin / flickr / CC BY-NC-ND 2.0