Lawmakers who have blocked a fix for the state’s lack of condo construction — a list that begins with Democratic House Speaker Dickey Lee Hullinghorst — should read a recent article by The Denver Post’s Aldo Svaldi and see if they can still remain complacent.
The article chronicles the alarming fact that housing construction has now lagged behind demand for years, and quotes an expert warning that the shortage could become chronic, with all that entails — such as punishing rents and home prices that routinely outstrip income gains.
“This is a perfect cocktail for a really bad housing outcome,” Washington-based housing economist Elliot Eisenberg said.
Now obviously the construction shortfall — “about 55,000 homes and apartments short” of what Colorado has needed since 2012 based on population growth — is due to a number of factors and not just that builders have been unwilling to build condos because of litigation fears. But political leaders’ should be looking to reduce as many obstacles to construction as possible in order to encourage new projects rather than bottle up potential solutions with endless objections. And yet the construction defects issue has been on the legislature’s plate for several years without effective resolution and in defiance of united support for action by the region’s mayors.
Eisenberg believes the best this region can hope to do is “to build enough houses so the situation doesn’t get worse” — a rather depressing outlook if accurate. And yet even holding the line could be difficult if Colorado remains among the top states in attracting new residents.
Indeed, the magnitude of the shortfall in overall housing should be a wake-up call not only for construction defects opponents but for anyone who imagines that metro Denver can solve its housing problems without a major boost in private investment. And not just in the city center and along transit lines, but in areas of suburban expansion as well, where the land supply remains less restricted. Sprawl may be dirty word to some urban planners but the overall housing supply is key if we’re not going to price young adults out of any hope of buying a home or even affording rent without sharing an apartment with people they hardly know, as is common in high-priced California cities.
Government subsidies and incentives can play a role, too, but primarily at the margins. It was a shame, for example, that the legislature failed to pass House Bill 1466, which would have transferred $40 million from the state’s unclaimed property trust fund to the state’s division of housing and to the Colorado Housing and Finance Authority to help leverage construction of affordable rental housing, among other things. But in a state in which “an estimated 164,000 households pay in excess of half of their monthly income on rent,” according to the Colorado Center on Law and Policy, $40 million is a woefully small down payment on the problem.
