EVENT RECAP
While media rent prices in Denver increased by 91 % since 2009 , the median price of a single-family home increased by more than 180 %. As housing costs rise across the market , multifamily housing remains the most cost-effective living option – by a wide margin – for Denver residents .
Bruteig reported that just 9,300 new rental units were delivered in 2021 , the lowest total in three years . There were , however , a record number of new development approvals , with 21,400 new rental units permitted in 2021 , a Denver record . With new unit permits exceeding new unit delivery by more than 130 %, Denver must significantly increase the pace of new unit construction in coming years . Bruteig ’ s report did identify some strong positive indicators for Colorado ’ s rental market , finding a total of 95,874 units under construction in the seven-county Denver metropolitan area . This total represents more than 25 % of the region ’ s current supply ; once delivered , these units will provide a significant boost to metro Denver ’ s housing availability .
presented by
Bruteig and Rathbun emphasized that new housing development should not focus exclusively on below-market , affordable units , pointing to Pueblo as an example of this strategy ’ s pitfalls . Experiencing a severe housing crunch and rising rent prices , the last several years of new development in Pueblo have come through government-subsidized affordable housing communities .
“ When insufficient units are available at the top of the market , many high-income households will substitute for housing units at the next cost tier down , contributing to higher prices in that tier ,” Rathbun reported . “ Lower-income households will eventually be outbid in other tiers . Accordingly , the development of new housing for higher-income households alleviates rent pressures for households at the lower end of the market .”
The trickle-down effect of new , highend rental housing benefits renters across the market , reducing the overall cost of housing for all income brackets . If new development focuses exclusively on affordable housing units , lower-income households are eventually crowded out of the market , exacerbating the housing crunch and increasing market-wide rent prices .
Elizabeth Garner , the state demographer for Colorado , discussed statewide population and economic trends . Colorado ’ s population continues to grow , she reported , but at a declining rate . Between 2020 and 2050 , the state is projected to add 1.8 million new residents .
“ Everyone wants more jobs in Colorado ,” she said , “ but more jobs are more people , and housing is where those jobs sleep at night .”
Between 2010 and 2020 , Colorado delivered 126,000 fewer new housing units than it had during the previous decade . As the state ’ s population continues to grow , Garner reiterated the need for an increasing , not declining , rate of new construction .
“ All of today ’ s presenters did an excellent job of framing the challenges and opportunities we face with housing ,” said Mark Williams , executive vice president of the Apartment Association of Metro Denver . “ The key now is acting on these ideas , taking steps to deregulate Colorado ’ s multifamily housing industry and crafting incentives for developers to deliver new housing .”
Jenny Jorgensen www . aamdhq . org MARCH 2022 TRENDS | 21