Denver residential properties along the massive Transportation Expansion Project have taken a hit since construction began four years ago, with more than half of them appreciating more slowly than the city as a whole, a Denver Post analysis of assessor records shows.
The data, used in the first known attempt to quantify the impact that T-REX has had on its residential neighbors, underscore the financial uncertainty that some
homeowners have faced while living near the $1.67 billion construction project along Interstates 25 and 225.
They also raise more questions about future appreciation once the work is completed late next year.
According to Denver assessor’s office records, of 13 neighborhoods bordering T-REX along I-25, appreciation rates in all or portions of nine neighborhoods have fallen below the city’s overall 24.3 percent increase in median home values since 2001, at times reaching only half that growth rate since the project began.
Still, there’s hope for many neighborhoods along the corridor. At least three – Cory-Merrill and South Washington Park on the north end of the project and Southmoor Park on the south edge – have seen median property appreciation surge past the city’s median since construction began.
Overall, though, neighborhoods in the heart of the construction zone in Denver have shown the greatest slowdowns.
While some real estate experts said residential property values have probably stabilized because T-REX is nearly finished, some Realtors said selling homes in the construction zone has been more difficult than usual.
“I’m trying to sell one home that backs to T-REX, and it’ll take an act of Congress to get people to look at it,” said Mike Edmiston, the managing broker at Gold Tree Real Estate.
He has tried to persuade several T-REX neighbors to hold onto their homes until construction is complete.
“No one’s sure what’s going to happen once (T-REX) is finished, and that’s concerning for some people.”
Mammoth changes
More than 17,000 parcels of land are in neighborhoods bordering T-REX, with nearly 9,500 of them in areas that saw lower appreciation rates than the rest of the city.
More than 25,000 people live within a quarter-mile of T-REX.
Realtors and T-REX neighbors said some single-family homes near the project have remained on the market several months longer than other homes only a few blocks away.
And in some instances, homeowners adjacent to T-REX are pricing their homes below appraised values.
The most affected neighborhoods – from East Hampden Avenue to South University Boulevard – saw some homes appreciate at rates well below 15 percent over the four-year period.
The Cory-Merrill, Platte Park, South Washington Park and Southmoor Park neighborhoods outpaced the city’s overall median. Southmoor Park saw the highest appreciation rate in the zone: 35.2 percent for the four-year period.
While real estate experts are quick to caution that other circumstances might have led to the general slowdown – including the post-terrorism economic downturn – they said the transportation project is a dominant factor behind the lag.
The lower appreciation rates could be replicated next summer when work begins on the metro-wide, $4.7 billion FasTracks transit plan, giving those transit neighbors an equally uncertain future.
The 12-year project will build six new commuter rail lines and extensions for two others stretching across 119 miles, dwarfing the T-REX project in size.
T-REX crosses through three counties, revamped 17 miles of I-25 and I-225, improved seven bridges and added 19 miles of light-rail line at 13 transit stops containing more than 6,100 parking spaces.
The revamped roadway and transit additions are expected to relieve traffic congestion and create new demand for homes, offices and retail businesses while linking employment centers in downtown Denver south to the Denver Tech Center.
But even before the first bridges were knocked down, some homeowners worried about the financial impact of the work.
Since construction began, some homeowners near the zone have complained about flooding, about sun-blocking noise barriers, about late-night construction work and about selling homes that could be considered too close to light-rail lines and the ever-encroaching interstate.
Those fears reached into neighborhood meetings with transportation officials and into smaller groups as neighbors argued among themselves over T-REX’s financial implications.
“There’s nothing about (T-REX) that makes me happy,” said Rosalie Maclear, 83, whose home near Hampden Avenue now backs a temporary toilet and an unobstructed view of I-25. “We’ve got (construction) lights at night, and I’ve had my lawn torn up.
“The interstate never used to be like this,” she said, yelling over the roar of traffic. “This can’t be good for the neighborhood.”
Surge in values predicted
In other T-REX zones in Arapahoe and Douglas counties, only a handful of residential properties border the project – too few to draw a conclusion about the impact that T-REX might have on property values.
While some Denver homeowners are nervous about the long-term effect T-REX will have on home values, transit planners and the state’s Realtor group said it is no surprise that some homes are suffering through an appreciation lag.
But now that the construction is winding down, “there won’t be any major reasons to worry,” said Kit Cowperthwaite, president-elect of the Colorado Association of Realtors.
“In the end, we’ll see a positive effect on the general market,” he said.
Nationally, the trend of construction-related falloffs in appreciation rates – followed by home-value surges – has held true in places such as Atlanta and San Francisco, among other cities.
A 1998 study of rail lines in the Chicago area showed that homes 1,000 feet from stations were valued 20 percent higher than similar houses a mile away; some homes gained nearly $40,000 in value.
At the same time, single- family homes within 300 feet of those stations battled noise, pollution and a lack of privacy, which hurt property values.
“Construction by its nature is disorderly, meaning values will lag, but the completion of the project will create an amenity for most people,” said Claude Gruen, principal economist for San Francisco-based Gruen Gruen + Associates, which created the Chicago study.
“Denver displays the typical pattern for a reasonably competitive market, so you’d expect that homes a few hundred feet from the lines would benefit once it’s finished.”
Winners and losers
Paul Grisley is one of those banking on the future.
His property in Southmoor – bordering the fast-appreciating Southmoor Park neighborhood – backs directly to I-25. But Grisley, an engineering consultant, is finishing up a 2,000- square-foot addition to his home.
“My neighbor bailed out and moved to Castle Rock when he first heard” about T-REX, Grisley said. “My family chose to stay, and it wasn’t a hard decision.”
T-REX so far has taken 140 square feet of Grisley’s backyard – for which he was compensated, though he wouldn’t reveal the price. Concrete from overhead work also landed on his stucco home recently, but that, he said, will soon be fixed.
“Predominantly, I think most people around here are upbeat about it,” he said of T-REX.
Less than a mile north, it’s a different story for Maclear, the woman with a toilet near her yard.
Power lines have been dug and redug; construction lights flash in the night. Some homes for sale in the neighborhood have languished for months.
Before T-REX, Maclear said, “the neighborhood was pretty quiet, even with the highway.”
Now, it’s earth movers, steel rods and concrete.
Even her dachshund, Neilson, is feeling the pinch. Some land was taken from Maclear’s backyard, and she had to put up a miniature fence to keep the dog from running onto the interstate.
“I don’t think he’s happy about it,” Maclear said. “But he’s a real escape artist.”
Computer-assisted reporting editor Jeffrey A. Roberts contributed to this report.
Staff writer Robert Sanchez can be reached at 303-820-1282 or rsanchez@denverpost.com.
