Denver’s development fee was informed by best practice research, a leading industry consultant, and months of diverse local stakeholder input.
We used an RFP process to hire a nationally-respected consultant, David Rosen & Associates, utilizing their tested methodology that draws the "nexus" from development to jobs to housing need.
We also considered the perspectives of commercial and residential technical advisory groups of well-respected developers to help inform the nexus study.(PDF, 4MB)
The study identified “legally justified maximum fees” ranging from $28.51 to $119.29 per square foot for commercial development and $9.60 to $23.66 per square foot on residential development.
We further lowered the fee ceiling with a feasibility study that was designed to show at what threshold a fee would tip a project into a financially infeasible position based on a Return on Equity analysis.
We lowered the ceiling even more based on additional input and analysis, including a comparison to development fees for affordable housing in peer cities:
- San Diego
$0.80 to $2.12 per square foot
$0.50 to $2.58 per square foot
$8.34 per square foot
$0.09 to $9.53 per square foot
$5.00 to 17.50 per square foot
- San Francisco
$16.01 to $24.03 per square foot
* Sacramento is the only city above that includes new residential development in its fee. The rest do not.
Development fees are a common source of revenue for jurisdictions across the Denver metro area, funding public investments such as affordable housing, transportation, parks, and public schools.