Colorado Population Growth Far Outpacing Available Housing

Colorado continues to be a popular destination for people relocating from other parts of the country. A strong economy, a vibrant city atmosphere, unmatched natural beauty, and a growing tech industry are just a few of the reasons why Colorado is one of the fastest growing states in the nation. With the large swell of new residents comes the need to provide housing options. Unfortunately, the state is falling short of those needs.

According to U.S. Census Bureau data, as outlined by the Denver Post, Colorado’s population rose by nearly 102,000 people in 2015, but the state added only 25,143 new homes, condos and apartments. With Colorado’s average household size at 2.5 people, the state should have added 40,500 housing units last year. This means that last year alone the state is 15,000 homes short, which is in addition to the previous years’ deficits, which have been mounting since 2012. Although new units have risen 1.1 percent per year over the past two years, population growth is nearly 2 percent per year. Since 2012, the state is about 55,000 homes short of what is needed.

Denver is already showing the symptoms of what happens when demand far outpaces supply… Apartment rental rate increases that are far greater than income growth; nation-leading gains in home prices; record low number of available residences for sale, thus triggering bidding wars; and gentrification in once-affordable neighborhoods.

According to the census data released last week, Denver joined the list of the 20 most populous cities in the U.S., while Colorado Springs moved up to become the 40th most populous city, and Greeley surpassed the 100,000 mark for the first time. Denver had the fastest growth rate among big cities in the U.S., with a 2.8 percent population growth during the 12-month period ending July 15 last year. Broomfield claimed the 9th fastest growing city overall with its 5.2 percent gain to more than 65,000 residents.

Assuming the Front Range remains a popular relocation destination, there is a risk that housing shortages could become chronic, with ever-increasing housing costs outpacing average market incomes. This is yet another confirmation of the need for quality, affordable housing options in the Mile High city and throughout the state.