Colorado's New Legislation Tackles Housing Affordability Crisis

Colorado's New Legislation Tackles Housing Affordability Crisis


In recent years, Colorado has emerged as a stark example of the U.S. housing crisis. Once known for its relatively affordable living, the state's home prices have surged nearly sixfold over the past three decades, surpassing even traditionally expensive states like Florida and California. This issue, initially confined to coastal cities, has now become prevalent in the heartland of America.

Factors Driving Colorado's Housing Crisis

The escalation in Colorado's real estate prices is multifaceted. Key factors include:

  • Rising Demand: Millennials are entering the housing market in large numbers.
  • Aging Population: Seniors are staying in their homes longer.
  • Investor Activity: Increased purchase of second homes and short-term rentals.
  • Construction Lag: Housing construction hasn't kept pace with demand.
  • Supply Chain and Labor Issues: Disruptions and shortages have hindered new developments.

These factors have led to declining population growth, increased homelessness, and hiring challenges for employers across the state.

Legislative Solutions for Housing Affordability

In response to these challenges, the Colorado General Assembly has passed several significant laws aimed at expanding housing affordability. Governor Jared Polis has signed bills that mandate local governments to plan and zone for more apartments and condominiums near transit stations. Additionally, legislation now allows for accessory dwelling units (ADUs) in large cities and towns, eliminates minimum parking requirements for apartments, and preempts local rules that prohibit living with roommates. These measures are designed to enable developers to build more diverse and affordable housing options.

Evaluating the Impact of New Housing Laws

These legislative changes position Colorado as a potential national leader in housing affordability. From an evaluative standpoint, several aspects of the new laws are particularly noteworthy:

  • Transit-Oriented Development: The requirement for high-density housing near transit stations is expected to significantly increase the housing supply. The Denver region alone, with its 77 light-rail stations, will need to plan for approximately 60,000 new housing units, helping to address the state's 101,000-unit housing shortage.
  • Mid-Rise Housing Profitability: Research from the University of California Berkeley’s Terner Center for Housing Innovation indicates that mid-rise projects are the most profitable type of new multi-family housing construction. These projects can be built with less expensive materials and do not require the specialized safety components of high-rise buildings, making them an attractive option for developers.
  • Environmental Benefits: By focusing on transit-oriented development, the new laws are expected to ease Colorado’s air-quality issues and reduce its carbon footprint. Residents of these new housing units will have better access to public transit, leading to fewer car commutes and lower greenhouse gas emissions.

Addressing Local Control Concerns

A common argument against state intervention in land-use regulation is that it undermines local control. Colorado’s new transit-oriented development law respects local governance by allowing cities to decide where within their transit areas to permit multi-family housing. This approach honors Colorado's tradition of home rule while ensuring that necessary housing developments cannot be entirely blocked.


Colorado’s new housing legislation is a proactive step toward addressing the state's housing affordability crisis. By increasing housing density near transit stations and reducing regulatory barriers for developers, these laws aim to create a more diverse and affordable housing market. As these measures take effect, Colorado may serve as a model for other states grappling with similar housing challenges.

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