By Margaret Jackson / NewsBreak Denver
(Denver, Colo.) Easing regulations could help boost the construction of more affordable rental housing in the region, according to presenters at an annual economic forecasting conference for the Denver multifamily housing industry.
Restrictions on height and lot size contribute to rising housing costs in densely populated areas, said Bryan Kaplan, a professor of economics at George Mason University in Fairfax County, Va. With reduced regulation, Kaplan said the cost of housing in metro Denver would fall dramatically, resulting in a corresponding improvement in the standard of living.
“These categories of regulation are artificially reducing housing supply,” Kaplan told attendees of ECON 2022, the annual economic multifamily forecasting conference hosted by the Apartment Association of Metro Denver. “All the data points to a single conclusion: By deregulating housing, we can reduce the cost of both multifamily and single-family homes. This would also help address other societal ills like inequality, which are the byproduct of an over-regulated housing industry.”
The median price of a single-family home in Denver is $618,000 — nearly $400,000 higher than the national average and accelerating at a rate of 73% higher than the national average, according to Apartment Appraisers & Consultants’ quarterly analysis.
While median rent prices in Denver have increased by 91% since 2009, the median price of a single-family home has increased by more than 180%, making multifamily housing the most cost-effective living option.
But developers aren’t delivering units fast enough to meet demand, said Cary Bruteig, principal and founder of Apartment Appraisers & Consultants. Just 9,300 new rental units were delivered in 2021, the lowest total in three years. Still, there were a record number of new development approvals, with 92 projects and 21,400 units permitted in 2021 — a Denver record.
Between 2010 and 2020, 126,000 fewer new housing units were completed than in the previous decade.
Colorado demographer Elizabeth Garner reported that Colorado’s population continues to grow, 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.”