Even as people are struggling like never before to afford their basic housing needs, home values across the Front Range have shown little sign of coming back to Earth due to one simple fact: There are too many households and not enough housing units to go around. There have been housing shortages and inflated home values before, but typically, these pressures are alleviated by new housing construction.
As much as homebuilders are trying to respond to this market demand, this reporting from Colorado Public Radio points out that it’s becoming practically impossible to build new affordable housing given the cost of today’s labor, material, and land prices. Everywhere around the city, you can see new construction and housing starts, but these are disproportionately custom home builds and luxury apartments.
A largely remodeled housing stock, paired with responsible land use policies, means there are only so many new lots available. Even in the most expansive definition of the greater Denver metro area, there are only so many places to build. Material costs have only gone up as well. Ready-mix concrete, OSB, and softwood prices in particular have shot up over the last year. Homebuilders aren’t just catering to upscale housing to make more money; they’re doing it because that’s the only way to consistently turn any profit at all. As goes Denver, so goes the nation. The price of labor, building materials, and land are the top challenges in 2018 for new housing construction, according to Eye on Housing from the National Association of Home Builders.
One thing we can do? Stop being so reactionary about new housing developments in our neighborhoods. By ensuring that affordable middle-class housing is available in your neighborhood creates something of a farm-league of prospective buyers for your own home some time down the road. It’s also a vital part of the health of the local economy. With smart design and incremental development, we can add new housing in sustainable ways throughout the state’s population centers.