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Developers and builders in land-constrained Denver are betting that a new community under way near the city’s airport will resonate with home buyers.

The need for affordable land coupled with the market’s explosive population growth has pushed the search for buildable lots into areas that were once considered impractical, says Metrostudy senior director John Covert.

“When we look at the shortages of land and housing in the Denver Metro area, and where we can actually grow household counts and population, it really is the surrounding periphery of Denver,” says Covert. “It can go south, east, or north, but it can’t go west because of the mountains. When you look at the carrying capacity of where that growth can occur, it’s really concentrated around the airport.”

The new mixed-use Aurora Highlands will serve as a testing ground for this airport-centric approach to residential land development. With homes planned from Richmond American Homes, Lennar, and Century Communities, the 3,000-acre community 7 miles south of the Denver International Airport is in its first phase of development. Located in Aurora, one of Denver’s fastest growing suburbs, the development will include a broad mix of homes and amenities.

Phase 1 will include residential units with prices starting at about $200,000, and single-family detached homes will range from just under $300,000 to over $1 million. The first 12,500 homes will house more than 30,000 residents, with plans to grow to 5,000 acres and 60,000 residents by completion. Construction is scheduled to start this summer and the first residents are slated to move in by late fall.

Assuming the area continues to add population, new sources of land are needed to mitigate the effects of a housing crunch. “It is no secret that there is limited land and product available in the Denver metro area. Aurora has the capacity to sustain Denver’s long-term growth,” says Carlo Ferreira, developer and managing director of Aurora Highlands LLC.

Planners envision that many of Aurora Highlands’ home buyers will work nearby. “DIA is an employment hub,” says Covert. “There are already 40,000 full-time employees out there every day. Fitzsimons Army Medical Center is there, which includes Children’s Hospital and the VA Hospital. Warehousing and distribution centers are starting to fill in. Amazon has its new fulfillment center, and Panasonic is locating a new research facility there.”

Ready for Takeoff

Airports in the U.S. are typically pulled far away from the cities they serve for noise, safety, and lower land prices. But the search for affordable housing and the shortage of buildable land is making sites near airports like Aurora Highlands more attractive to residential developers. This “aerotropolis” concept has been tested internationally and domestically with mixed results. Ekurhuleni in South Africa is pointed to as a success while failed attempts in the U.S. include St. Louis and Memphis.

Atlanta officials are currently embarking on their own aerotropolis adventure by making land development near its airport attractive to commercial and residential developers (click here for more). The need for more affordable options is a familiar refrain across the country, and building lower-priced homes begins with finding inexpensive land. Covert says that there is still land available in the Denver/Aurora area but a large chunk of what’s considered affordable is concentrated in the DIA corridor.

“When we look at the south part of the Denver metro area, into Douglas County, there are big tracts of land available but they are much more expensive. So most of the homes that are getting built there are out of reach for the average consumer,” says Covert. “When we go north there is carrying capacity there for future growth and a lot of connections to employment centers including the airport but it doesn’t have the future land capacity that the DIA corridor has.”

Developments near major airports will help developers offer homes in a range of price points, Covert adds. “There are roughly 220,000 future lots that Metrostudy is tracking in our database, in the seven-county metro Denver area,” says Covert. “Exactly a third of those are in the DIA corridor. This is where growth is headed, the builders know this. It’s land that is relatively affordable. So it allows builders to build different product types, different price points.”