Colorado’s Housing Affordability Crisis in Numbers

Having the freedom to afford a home near where you work, go to school, and make your life is at the heart of every hardworking Coloradan’s economic security, opportunity, and well-being. This is the Colorado way of life, and many people living in the state are finding it increasingly out of reach. Colorado’s severe housing shortage is hurting families and communities in every corner of the state with the cost of housing far outpacing wage growth. This report shares data about the current state of housing in Colorado, what we can expect if nothing changes, and policy solutions that would help mitigate this housing crisis.

Scroll down for a variety of data points across Colorado on the housing crisis.

Second Highest Housing Costs in the West

Whether you’re a homeowner or renter in Colorado, you’re likely struggling with housing costs. 

The average Coloradan can no longer afford to buy a home. A typical home in Colorado costs nearly $520,000, making Colorado the Western state with the second highest housing costs, second only to California. The cost of a home has increased nearly 150 percent since 2010, when a typical home cost about $216,000. In 2011, the average Coloradan could buy a home for less than 4 times their yearly salary. Today, they would need to pay 6 times their salary for the same home. 

As a result of these inflated housing costs, for example, teachers can no longer afford to live near where they teach. In 2005, the average teacher in Colorado earned just under $45,000 and could buy a typical home for 5 times their salary. In 2023, that same teacher earns about $63,000, but it would cost them over 8 ¼ times their salary to buy a typical home. Indeed, only Coloradans working in the highest-paid professions are able to afford to buy a typical Colorado home. 

Renters are also struggling with high housing costs. After adjusting for inflation, rents have increased by 41 percent since 2011, while income has increased by only 24 percent. As a result, half of all renters in Colorado spend over 30 percent of their income on rent, meaning they are considered “cost-burdened” and have less money for other essentials, like food and transportation.

Housing supply no longer meets demand; people moving further from where they work

With population growth outpacing housing development, the supply of housing in Colorado no longer matches demand, and the lack of available housing drives up housing costs. The severe housing shortage in Colorado is hurting families and communities in every corner of the state and is the number one issue facing Colorado families. 

Coloradans are moving out of cities to relatively more affordable suburbs and, as a result, spend more time commuting. Longer commutes mean more cars on the road and more traffic. Between 2010 and 2022, three-quarters of all legislative districts in Colorado saw an increase in the share of people commuting over 30 minutes each way. In 2022, there were 238,000 more cars on the road than there were in 2010, representing a 15-percent increase in cars during this time. Longer commute times have been associated with declining quality of life and with stress among commuters, and having more cars on the road increases climate emissions. If nothing changes, the housing shortage will continue to drive up housing costs and increase commute times into the future.

How Did We Get Here, and What Will Happen if Nothing Changes?

For decades, people have moved to Colorado for its booming economy and quality of life, but development has not kept pace with in-migration. Due to the Great Recession, building slowed between 2007 and 2018. Recently, the COVID pandemic and shift to working from home have increased demand for housing even further. This combination of low supply and high demand has made housing increasingly unaffordable for most Coloradans. As a result, Coloradans believe that even if the housing crisis is not affecting them today, it will tomorrow or in the future. Families worry about their kids not being able to afford a home and being forced to move out of state, their aging parents being unable to downsize, and even their own ability to stay in their home or move for work. 

The housing shortage will continue to be a serious problem until our leaders take action. In the absence of new housing policy, purchasing a home will continue to be unaffordable for all but high-income earners. Cities will remain expensive, and commute times will remain long, with more cars on the road, more traffic, and more climate emissions.

In the absence of housing policy, the housing crisis will likely deepen. According to forecasts, in 2030 the price of a typical Colorado home will be over $760,000, representing a nearly 45-percent increase in cost from today. In 2030, by comparison, the price of a typical home in the United States will be around $380,000, or just under half the cost of a Colorado home. Colorado will be too expensive for regular people, and the Colorado way of life will remain out of reach for the vast majority of the population.

Policy Solutions

This problem may feel overwhelming, but there are practical, simple steps we can take now to make progress on a statewide level that can make a meaningful difference for Colorado families. Below we describe three policy proposals that together would bring the Colorado way of life back into reach for Coloradans: strategic growth, homes in all shapes and sizes at different price points, and transit oriented communities. Relevant bills are listed as bullet points underneath each description.

Strategic Growth

The housing crisis requires a state-wide plan for strategic growth. Even with many cities making progress, the patchwork of solutions isn’t making a dent in our statewide problem, and waiting on each jurisdiction to act to supply homes that residents of the state need is spinning Colorado’s housing shortage and affordability crisis further out of control. State leaders must create reasonable, effective, and data-driven statewide housing standards that give flexibility to cities to do their part to increase the supply of housing to meet demand, increase housing choices, and ensure that all Coloradans can afford to rent or buy a home.

• Strategic Growth and Planning: Seventy-two percent of Coloradans support a state law requiring municipal and county governments to develop housing plans that estimate how much housing is needed in their communities and to adopt policies that provide enough new housing to meet these needs. Effective legislation should require local governments to adopt and implement the housing needs assessments and action plans, require consistency and alignment in the data and measures included in those plans, tie grant funding to the adoption and implementation of housing needs assessments and action plans, and support environmentally and fiscally sustainable growth by integrating housing, infrastructure, transit, and water needs planning. This is our state’s opportunity to create a strategic growth and planning framework that not only addresses our current housing shortfall, but prepares us for the future growth Colorado expects. 

Homes in all shapes and sizes at different price points

We need to ensure that we are building the types of diverse and attainable homes that match the needs of Colorado families, renters, seniors, first-time homebuyers, and more. When people live in housing that is attainable and affordable, they have money for other critical needs like groceries, medicine, utility bills, and school supplies. Right now, over one-third of Coloradans are spending more than 30 percent income on their rent or mortgage, leaving too little left over for other basic necessities. Building enough homes of all shapes and sizes will keep home prices and rents lower, so that hardworking Coloradans don’t have to choose between paying rent and putting food on the table.

• Accessory Dwelling Units (ADUs) with Innovative Financing: ADUs can be an affordable housing option for aging relatives, older children, and others who cannot afford to buy or rent a home nearby. They can also be a source of rental income for homeowners, and an affordable option for renters. This bill would give homeowners more freedom to build ADUs on their property, as well as innovative financing to make their construction affordable. It is supported by 78 percent of Coloradans and will help make housing more affordable for working people, young families, and retirees.

• Eliminating Unnecessary Occupancy Limits: Living with roommates makes housing more affordable and can also encourage community. Coloradans should be free to choose a living situation that meets their needs, regardless of family or household structure. This bill would eliminate occupancy limits except for those that are necessary for health and safety. 

Transit-Oriented Communities

Transit-oriented communities encourage housing production and development near transit hubs to create walkable communities. They improve equity by lowering housing costs and reducing transportation costs, and they allow people to live near jobs, grocery stores, schools, and their other life activities. They also help the environment by cutting climate emissions, reducing water and energy consumption, and preventing exurban sprawl. 

A large majority of Coloradans (68 percent) support a state law requiring cities and counties to allow more housing to be built near business and shopping districts, bus stops, and train stations and providing financial assistance to cities and counties for these projects. 

• Transit-Oriented Communities: This bill would remove burdensome barriers to encourage building more affordable homes near transit, empower local governments to build more housing, reward financial assistance to cities and counties who allow for more housing, and help residents stay in their communities. It would establish Housing Opportunity Goals in qualifying municipalities to increase the number of homes that can be built near transit and city and town centers, with the aim of ensuring both more housing that is affordable and appropriate ridership for transit. Municipalities would be given flexibility to do their part to increase the supply of homes while meeting demand, increasing housing choices, reducing pollution and ensuring that all Coloradans can afford to rent or buy a home. 

• Removing Parking Minimums:  By requiring developers and property owners to build more parking spaces than they voluntarily would, parking minimums increase the cost of developing housing, office buildings, and shopping centers. They can also force households to pay for expensive parking that they do not need. This bill would remove parking minimums and, by doing so, lower development costs. Other potential benefits would include encouraging the use of public transit, increasing density, and reducing climate emissions.

Conclusion

Colorado’s housing crisis may seem daunting and the stakes are high, but the above bills represent concrete, practical, and reasonable strategies to ensure that the Colorado way of life remains accessible to all Coloradans.