If it seems like we were just talking about how local residential rental rates have been increasing at an alarming rate, it’s because we were.
Merely a month after an Associated Press report showed that Denver’s rental prices are rising faster than anyplace in the United States—including the notoriously hellish markets in the Bay Area—new statistics show that our numbers are now historically challenging. This week, a Colorado-based housing economist released an analysis that shows the average Metro Denver rental costs increased more than 12 percent, year over year, in each of the past two quarters.
This marks the first year-over-year, double-digit increases in local rents in more than 20 years, and it brings the average cost of an apartment rental here to more than $1,200 per month. This area has typically experienced annual rent hikes of closer to 4 percent since the early 1980s.
The reasons for this unfortunate development are numerous, but they begin with an unfortunate lack of development in the condominium market. Our divided state legislature just concluded its 2015 session by failing to pass a construction defects reform bill that some say would motivate condo developers that have been waiting on the sidelines to dive back into a market whose inventory is also at or near record lows. What’s less clear is whether the lawsuits condo developers supposedly fear are an actual threat or a made-up one. (More in-depth analysis on this topic is coming soon in this space.)
Regardless of the reasons for these price concerns, they aren’t sustainable over the long haul. If we can’t find some middle ground on affordable housing—not just for lower-income folks, but for everyone—all this growth our city and state leaders are counting on and trumpeting is in danger of becoming a massive civic and economic headache.