The Denver Housing Crisis: An In-Depth Look
As one of the fastest-growing cities in the US, Denver’s impressive growth has brought not just economic prosperity but also some challenges. Among the most pressing issues is the rapid escalation of housing prices making it increasingly difficult for a significant portion of our workforce to access affordable housing options. Recognizing the magnitude of the problem, DenverColorado.org is committed to understanding the nature of Denver’s housing crisis and exploring possible solutions.
## Denver’s Housing Dynamics
As one of the top destinations in the country for in-migration, Denver’s population grew by over 68,000 people between 2010 and 2014, 62 percent of which was from in-migration according to the state demographer’s office. The impressive influx of new residents combined with Denver’s growing millennial population significantly increases demand for entry-level housing.
As demand has increased, rent prices and property values in Denver have soared. In 2014 alone, Denver’s rent spiked by 9.2% – the highest nationwide. The median home price now stands at $398,000, marking a 10.7% increase from previous years.
Creeping up to a median of $1,274 in the first quarter of 2016, the ever-increasing rental rates consign younger age groups to staying in the rental market. This restricts their ability to save for future home investments, leading to a tug in the market dynamics as demand for housing continues unabated.
## The Ongoing Affordable Housing Crisis
The continuous population growth combined with a staggering hike in prices has led to a severe shortage of affordable housing in Denver. This is particularly a critical issue for those making less than $20,000/year.
According to Housing Colorado, there is a deficit of over 100,000 homes priced at an affordable level for this demographic. Given the current rate of affordable rental housing construction of 823 homes per year, it would take over a century to eliminate this gap.
Further exacerbating the issue is the dwindling availability of affordable rental and for-sale housing resources. Federal funding sources for affordable housing, including HOME and Community Development Block Grant (CDBG) programs have been cut by 59 percent and 49 percent, respectively, since 2000.
High litigation risks and unfavourable construction defects laws have also hampered the development of medium to low-priced condominiums, which typically serve as an accessible buying option for first-time homebuyers.
## The Way Forward
To address this pressing issue, various sectors are taking proactive measures aimed at expanding affordable housing options. However, making a significant impact requires concerted efforts and coordination among all sectors of our economy.
Addressing the housing crisis in Denver is a continuous and challenging journey. However, it’s a journey that DenverColorado.org is proud to be a part of, as we strive to foster a vibrant, diverse community where everyone can afford a place to call home. Let’s work together to ensure a prosperous, inclusive future for Denver.