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Page 16 — Multifamily Properties Quarterly — August 2017
Legislative Update
O ver the past few years,
our state’s multifamily
rental housing industry
has observed significant
increased demand, especial-
ly in the Denver metro area. Colo-
rado has the lowest unemployment
in the country at 2.3 percent and
people are moving here as a result.
According to the Colorado State
Demographer, the population is
expected to increase at 1.7 percent
each year, which is roughly 396,000
people from 2018 through 2022.
Today, the American Dream is
evolving – no longer focused on
buying the single-family home with
the white picket fence. Increas-
ing numbers of seniors seeking to
downsize are placing walkability,
security and maintenance-free liv-
ing as priorities. College graduates,
often strapped with student loans,
avoid additional debt and look to
rent, which offers the flexibility to
move to another market in pursuit
of the dream job.
Because of these new dynamics,
demand for rental housing is high
and the new “renter nation” is in
full swing. Couple this with a low
inventory of sin-
gle-family homes
and it is clear – our
metro area com-
munities are in
dire need for more
housing.
Nearly 40,000
multifamily units
along with 37,000
single-family
homes have been
introduced to the
Denver area mar-
ket over the past
four years, and the
absorption rate
for these newly
added units is at
an all-time high. It
is estimated that
another 60,000 multifamily units
are needed before we reach equilib-
rium in the current market. Basic
supply and demand dictates that as
demand for housing continues to
increase, housing costs will contin-
ue to escalate barring an increase in
supply. Industry experts agree that
Denver’s strong economy continues
to drive the rental market, and they
emphasize the importance of add-
ing new supply.
• What is being proposed? The
recent growth, driven by a strong
economy and demand for hous-
ing, has led to frustration among
many. Traffic, high housing costs,
gentrification, density and changing
neighborhoods prompt constituents
to call on their elected official to “do
something.” Along with other well-
meaning but misguided legislative
proposals, we are now seeing the
introduction of several antigrowth
ballot initiatives. These reaction-
ary and ill-constructed proposals
severely limit the development of
additional much-needed housing
units.
One such growth limitation
proposal would restrict building
permits to 1 percent of the cur-
rent stock in each of the 10 coun-
ties (Broomfield, Denver, Adams,
Arapahoe, Boulder, Douglas, El
Paso, Jefferson, Larimer and Weld).
It would apply to all types of resi-
dential housing including single-
family, apartments, mobile homes,
condominiums and townhomes.
The potential Nov. 6, 2018, ballot
measure would place an immediate
moratorium on any new building
permits from the day of the election
to the end of the year. Additionally,
counties would be limited to issuing
permits for 1 percent of the existing
housing stock per year until 2022, at
the earliest, if overturned by the vot-
ers through county referendum.
Lakewood and other municipali-
ties are looking at similar measures.
• Is this the right approach?
Restricting housing production
would not only exacerbate ris-
ing housing costs, it also would
drastically diminish the ability to
produce much-needed affordable
housing. Keep in mind, the median
new home price in Denver exceeds
$537,000. Average rents are just over
$1,400 per month. If supply is arti-
ficially cut off, housing prices and
rents will rise. It will become more
difficult for low- and moderate-
income families to find housing.
Unable to afford housing, more indi-
viduals will likely face homeless-
ness. Employers keeping Colorado’s
economy strong will begin to leave
for more affordable markets where
they can find employees who can
afford to live near their work.
Within the five-year timeframe
contemplated by the proposed ini-
tiative, conservative calculations
estimate an economic impact of $26
billion, equating to nearly $5 bil-
lion in lost fees and tax revenue for
local governments. Another inevi-
table result includes the loss of over
50,000 permanent potential jobs for
our communities and the reduction
of 147,000 construction jobs and
from those, induced jobs tallying
over 117,000.
Although there is no silver-bullet
approach to address affordable
housing needs, newly crafted poli-
cies must be thoughtful, document-
ed and studied to accomplish a posi-
tive, meaningful impact for our com-
munity as a whole. A limit on new
housing is not the answer. Let’s keep
our community vibrant, economical-
ly sound, attainable and affordable.
Growing pains can be difficult, but a
studied approach is best.V
Nancy Burke
Vice president,
government
and community
affairs, Colorado
Apartment
Association,
Apartment
Association of
Metro Denver,
Greenwood Village
Keep in mind, the median new home price in
Denver exceeds $537,000. Average rents are just
over $1,400 per month. If supply is artificially cut off,
housing prices and rents will rise.