Where have all the condos gone? It's all about the law, stupid
Colorado’s renowned quality of life long has offered its residents almost limitless possibilities. Now, for many of us, one very important thing is missing — the American dream of owning a home.
You’ve seen the disturbing headlines: A growing number of Coloradans are being priced out of homeownership. They are being forced instead to pay skyrocketing rent as the hope of ever buying a home slips away.
While the cost of all housing has been rising, it is particularly acute when it comes to newly built homes. Hopeful homebuyers have been hit with sticker shock as they search in vain for the affordable condos and townhomes that once comprised a significant share of new housing stock. Now, construction of condos and townhomes — often a first home for those starting out as well as the best option for seniors looking to downsize — has slowed to a trickle.
What’s going on? Although some of the causes of Colorado’s affordable-housing crunch are complex and defy quick solutions, there is one key factor we can do something about, and we can do it almost immediately.
Our General Assembly needs to fix an obscure defect in state law that exposes homeowners and homebuilders alike to a high risk of expensive, time-consuming litigation over construction errors. The law hinders timely repairs, confronting consumers with a loss of value in their home as efforts to correct errors are held up in court.
The good news is legislation now pending in the Colorado Senate would make the needed fix. Senate Bill 177, which has broad-based, bipartisan support, would among other provisions require the simple, sensible step of mediation before disputes could escalate to litigation. That way, repairs would be made rather than lawsuits filed.
The current, broken statute not only stymies current homeowners who simply need quick, practical remedies rather than court battles, but it also has created a climate that puts the chill on new construction of affordable, multi-family housing. The fear of litigation and the soaring insurance premiums that go with it are scaring off investment in the affordable-housing market.
Poor access to affordable housing in Colorado doesn’t just affect those who already live here; increasingly, employers looking to open for business in our state or expand operations here are taking notice. And they are being turned off.
That’s right; for the nation’s job creators, the soaring cost of housing workers is pivotal in deciding whether to locate operations here — and it poses a very real threat to our overall economic well-being.
Consider these troubling facts:
- Metro Denver is the most expensive major housing market in the country that isn’t located on one of the two coasts.
- Metro Denver’s median home prices used to be on a par with comparable competitor markets, like Phoenix. Today, at $329,000, Denver’s median-home price is $114,000 higher than Phoenix’s.
- Not long ago, 23 percent of Colorado’s new-construction housing consisted of affordable condominiums and townhomes. Today, it’s 4 percent, and only half of that is in the price range affordable to middle-class Coloradans.
That grim reality is shutting out young families seeking to buy their first home and elderly Coloradans looking to remain in the city where they raised their families but who want a smaller, more manageable home. It is slamming the door on working Coloradans — the firefighter, the teacher, the police officer and many others who are being priced out of the communities they serve.
Moreover, Colorado risks turning away the country’s “millennial” generation — that new wave of creativity and vitality for tomorrow’s economy — by preventing them from attaining a valued life-work balance. A fundamental link in that balance is affordable housing.
One thing that does not change from one generation to the next is the role of homeownership in achieving prosperity. For most of us the path to personal wealth begins with the purchase of our first home.
For too many Coloradans, that dream is becoming unattainable. Our lawmakers need to act now to restore the dream — and the future of Colorado’s economy.