This week, the 2015 Denver elections occurred. This blog discusses how the results might impact homeownership and renting in the Mile-High City and why that matters.
The results are in…for the most part. While some run-off elections for hotly contested City Council seats are going to be had in June, Denver voters made one thing clear: they are concerned about recent development trends in their city. Fueled by public opinion, almost all City Council candidates had something to say on development, or overdevelopment in the eyes of some. Mayor Michael Hancock, who easily won re-election with about 80% of the vote, acknowledged that Denver’s recent success has not affected the city’s population evenly.
It’s true: Denver is doing exceptionally well. It is attracting a huge number of educated young professionals from around the country and the world. It is attracting businesses from elsewhere and local businesses are thriving. While this all sounds great, there are some downsides to the ongoing influx of cash and investment boom. First, with so many well-paid people moving to the city at a rate that outpaces construction of new residential units, the cost of rents and homeownership are skyrocketing. Some of the young professionals relocating to Denver may have the $2,000 to pay in rent each month at the newly constructed apartment buildings plotted around central Denver. But what about everyone else? Lower income people are in effect being forced out of Downtown. Homeownership is not necessarily a viable alternative either as the construction of new homes in Denver is far below the level of demand and any that are being built tend to be unaffordable to most. A major reason condominiums are not being built is due to a current construction defects law which has the effect of discouraging condo development. This drives up the cost of existing units while there is not much of an affordable housing alternative. So what are our elected officials going to do about all of this?
Many City Council elects won their seats on a “sensible development” platform. We interpret that to mean that they will seek community input in their districts prior to giving the ok for development activities. This would surely make Denver residents feel like they have greater control over development that some currently view as out of control. While this is great on its own merits, it does not work to solve the ever-increasing problem of housing affordability. In the HOA management industry, we are quick (and probably very correct) to think that dramatically amending the construction defects law will encourage the construction of new homes to own and the cost of housing for homeownership may go down (or at least prevent further spiking). Based on legislative activity, such amendment may not occur for a while. Mayor Hancock is considering action that will lead to an increased number of affordable housing units, which the city has an inadequate supply of. We hope that he and his new City Council will take action soon.
Although there seems to be a challenging road ahead for affordable homeownership and renting in Denver, we have faith that our elected officials will work quickly towards a solution when they enter into office or begin new terms. Denver voted and the message was heard loud and clear. What are your thoughts on all of this? Let us know with a post to our Facebook page.