By Lauren Brockman

Colorado’s housing affordability challenges have been felt in every corner of the state. The problem is particularly acute for extremely low-income renters, with almost three-quarters spending more than half of their income on housing. The increased cost of housing is in part driven by demand — a nearly 15 percent increase in population from 2010 to 2020, but new deliveries of housing did not keep pace with this growth. And despite already facing a housing shortage, between now and 2030, Colorado will need to build 7,178 new apartment homes each year to keep up with new demand.

Boulder serves as an excellent case study on the state of the Colorado housing market and the barriers to addressing the need for more housing. Boulder’s plight is a direct function of its growth limitation – that is the 1 percent annual growth moratorium. After decades of artificially capping the city’s ability to meet demand, Boulder now has the highest median home price on the Front Range, in excess of $780,000, along with astronomical rental prices. Extreme home price appreciation is great for the lucky few who were able to get in many years ago but is devastating for every future resident who wants to call the city home.

Neither Boulder, nor the entire state, are immune from the laws of supply and demand. This is why there is bipartisan support at the statehouse for stopping future “slow-growth” initiatives. If there is one thing Republicans and Democrats can agree upon, it’s that we need enough housing to ensure a prosperous, equitable future for all Coloradoans. This legislation is a great first step, but what else can we do — both here in Boulder and throughout the state — to better combat these housing affordability challenges?

First, we need to invest in the state’s most precious resource – our people. With the state flush with money from the federal COVID-19 rescue funds, we can create and preserve real affordable housing throughout the state. It takes significant investment to create housing that is below market-rate costs. In addition, we can and should provide direct assistance to families who face temporary financial hardships. If there is one lesson we learned during the pandemic on housing, it’s that providing direct financial assistance to people in need, we can help them get through tough times and get back on their feet.

Second, we need to make it easier to create more housing. Nationally, nearly one-third of all multifamily development costs are strictly from regulations. In Boulder, excessive building costs limit the supply of new housing that can be profitably built, exacerbating the area’s housing shortage and resulting in higher rents.  In fact, through peer discussions within the rental housing community the cost to build a single apartment unit in Boulder is $550,000 today versus the same unit in Arvada costs $368,000. If we can chip away at unnecessary regulations, we can create more housing, and more affordable housing, for the entire state.

And thirdly, we need to avoid artificial price caps on housing. Removal of price controls always reduce the cost of the product much like the deregulation of the airline industry in the 80s.  As way of an example, I recently purchased a roundtrip ticket to the same destination that cost me the same as it did in 1993.  Like caps on growth, rent control distorts the market, drives away investment and makes the very problem worse. When St. Paul, Minn. passed a rent control measure last November, developers immediately began halting new communities. A recent survey of large multifamily firms found that nearly six in 10 are actively reducing or avoiding investment in markets with rent control. This ends up reducing the overall supply of housing and drives up costs for everyone else. The high rents in the poster children for rent control, New York and San Francisco, demonstrate that rent control benefits very few, and not those in greatest need, at the expense of the larger community and society. That’s why the majority of states, including Colorado, have prudently enacted laws that prohibit local municipalities from imposing rent control.

As we emerge from the pandemic, the state has a tremendous opportunity to redefine its future. If we want a Colorado that is welcoming, equitable and affordable, we need more housing at a variety of price points. If Republicans and Democrats can agree on this, certainly Boulder can, too.

Lauren Brockman is Principal at Covergence Rental Housing, Real Estate Group in Denver. At Allied Realty, he handled acquisition and development of approximately 10,000 multifamily units, with a total aggregate value of approximately $925 million. That firm grew its management platform under his leadership from 5,000 units to a little over 27,000, and acquired/developed 5,620 units with an aggregate value of $665 million. His partner, Peter Porraro and his teams have invested in, entitled, developed and built more than 14,000 apartment homes with a capitalization over $3.5 Billion.

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 By Lauren Brockman

Colorado’s housing affordability challenges have been felt in every corner of the state. The problem is particularly acute for extremely low-income renters, with almost three-quarters spending more than half of their income on housing. The increased cost of housing is in part driven by demand — a nearly 15 percent increase in population from 2010 to 2020, but new deliveries of housing did not keep pace with this growth. And despite already facing a housing shortage, between now and 2030, Colorado will need to build 7,178 new apartment homes each year to keep up with new demand.

Boulder serves as an excellent case study on the state of the Colorado housing market and the barriers to addressing the need for more housing. Boulder’s plight is a direct function of its growth limitation – that is the 1 percent annual growth moratorium. After decades of artificially capping the city’s ability to meet demand, Boulder now has the highest median home price on the Front Range, in excess of $780,000, along with astronomical rental prices. Extreme home price appreciation is great for the lucky few who were able to get in many years ago but is devastating for every future resident who wants to call the city home.

Neither Boulder, nor the entire state, are immune from the laws of supply and demand. This is why there is bipartisan support at the statehouse for stopping future “slow-growth” initiatives. If there is one thing Republicans and Democrats can agree upon, it’s that we need enough housing to ensure a prosperous, equitable future for all Coloradoans. This legislation is a great first step, but what else can we do — both here in Boulder and throughout the state — to better combat these housing affordability challenges?

First, we need to invest in the state’s most precious resource – our people. With the state flush with money from the federal COVID-19 rescue funds, we can create and preserve real affordable housing throughout the state. It takes significant investment to create housing that is below market-rate costs. In addition, we can and should provide direct assistance to families who face temporary financial hardships. If there is one lesson we learned during the pandemic on housing, it’s that providing direct financial assistance to people in need, we can help them get through tough times and get back on their feet.

Second, we need to make it easier to create more housing. Nationally, nearly one-third of all multifamily development costs are strictly from regulations. In Boulder, excessive building costs limit the supply of new housing that can be profitably built, exacerbating the area’s housing shortage and resulting in higher rents.  In fact, through peer discussions within the rental housing community the cost to build a single apartment unit in Boulder is $550,000 today versus the same unit in Arvada costs $368,000. If we can chip away at unnecessary regulations, we can create more housing, and more affordable housing, for the entire state.

And thirdly, we need to avoid artificial price caps on housing. Removal of price controls always reduce the cost of the product much like the deregulation of the airline industry in the 80s.  As way of an example, I recently purchased a roundtrip ticket to the same destination that cost me the same as it did in 1993.  Like caps on growth, rent control distorts the market, drives away investment and makes the very problem worse. When St. Paul, Minn. passed a rent control measure last November, developers immediately began halting new communities. A recent survey of large multifamily firms found that nearly six in 10 are actively reducing or avoiding investment in markets with rent control. This ends up reducing the overall supply of housing and drives up costs for everyone else. The high rents in the poster children for rent control, New York and San Francisco, demonstrate that rent control benefits very few, and not those in greatest need, at the expense of the larger community and society. That’s why the majority of states, including Colorado, have prudently enacted laws that prohibit local municipalities from imposing rent control.

As we emerge from the pandemic, the state has a tremendous opportunity to redefine its future. If we want a Colorado that is welcoming, equitable and affordable, we need more housing at a variety of price points. If Republicans and Democrats can agree on this, certainly Boulder can, too.

Lauren Brockman is Principal at Covergence Rental Housing, Real Estate Group in Denver. At Allied Realty, he handled acquisition and development of approximately 10,000 multifamily units, with a total aggregate value of approximately $925 million. That firm grew its management platform under his leadership from 5,000 units to a little over 27,000, and acquired/developed 5,620 units with an aggregate value of $665 million. His partner, Peter Porraro and his teams have invested in, entitled, developed and built more than 14,000 apartment homes with a capitalization over $3.5 Billion.

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