BUILDING
BLOCKS :
Addressing Denver ’ s Housing Affordability Crisis
BY TEO NICOLAIS
Among the most universally agreedupon approaches for increasing rental housing affordability is increasing rental housing supply . A recent study by CoStar underscores this point : in American cities where rental housing supply increased by 3 % in a given year , average rents fell by 2-3 %. Conversely , cities with no year-over-year increase in supply saw rents climb by 2-4 %.
Increasing rental housing supply is , of course , easier said than done and one of the key elements , the ability to attract investment capital , is often given short shrift in policy debates – with disastrous consequences for the cause of housing affordability .
CAPITAL CALLS
Increasing rental housing supply requires two parallel efforts : constructing new homes and preserving existing stock . Both are indispensable , but neither is cheap .
Renovating existing properties is a necessary but expensive endeavor . Time and wear inevitably take their toll on buildings : roofs leak , plumbing corrodes , and interiors age . Renovations , depending on scope , typically cost anywhere from $ 30,000 to $ 60,000 per unit . These costs are unavoidable , as failing to maintain existing housing stock merely accelerates its decline .
Building new housing , however , makes the task of renovating look like a bargain . In
18 | TRENDS JANUARY 2025 www . aamdhq . org