Nathan Adams and his company, redT Homes, an award-winning Denver homebuilder, have built a diverse portfolio of housing options and a record of success. From single-family homes including their specialty “LiteHomes”—to multi-unit townhomes and apartments, redT’s commitment to sustainable, attainable housing positions them as key contributors to solving Denver’s current critical housing shortage of around 100,000 units.
But rather than embrace the efforts of builders like redT, Denver enacted an inclusionary zoning program that does the exact opposite. Denver’s Linkage Fee ordinance forces builders to either set aside units to sell at below-market prices or pay huge fees to help create “affordable housing.” Small-scale development projects must pay a “linkage” fee for every square foot built, and those costs increase every July.
The City’s regulations force home builders to pay for problems they do not create. The result: Developers have to increase the price of homes to cover the increased costs, making it harder for Denver families to buy homes.
The excessive red tape has already priced redT out of some projects completely. Two of its upcoming projects may be headed down the same path: four single-family homes, which are subject to $25,000 in fees, and two duplexes, which are subject to $45,000 in fees.
Denver claims these fees are justified because new residents generate more housing demand. This rationale, however, misses the mark—the housing shortage stems from regulations that restrict supply by making it harder to build homes. Denver is punishing the very builders working to solve the housing crisis.
There’s also a constitutional problem with these inclusionary zoning fees. The Supreme Court determined in a quartet of rulings that governments cannot burden homebuilders with costs for problems they do not create. Taken together, those cases established that permit conditions for new construction must be proportional and directly related to its impact. Anything above and beyond is an unconstitutional property taking.
Denver’s Linkage Fee program fails both prongs. It’s an exorbitant ransom for permission to build much-needed homes and exacerbates the problem the fee is trying to solve.
Represented at no charge by Pacific Legal Foundation, Nathan and redT Homes are fighting back with a federal lawsuit challenging Denver’s unconstitutional housing fees. A win will restore their right to build essential housing without excessive government demands and protect the rights of all Americans to do the same.
What’s At Stake?
- Governments cannot force homebuilders to pay for problems they do not create. Fees for new construction must be proportional and directly related to the impact of the development.
- Inclusionary zoning fees make building more expensive. Making something more expensive does not make it more affordable.
