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Tatiana Bailey: Has Colorado Springs overbuilt apartments?

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Tatiana Bailey: Has Colorado Springs overbuilt apartments?


Many people have asked me about the plethora of new apartments in our region and if we’ve overbuilt. Most people have heard about the national and regional housing shortage, but they still wonder if we’ve overbuilt apartments and whether vacancy rates are going up.

The answer is nuanced. It is true that our region has a shortage of roughly 8,500 housing units, which includes both multifamily apartments and single-family homes. It is also true that we had an absolute boom in multifamily construction during the pandemic. A high number of permits were pulled, initiating an unprecedented number of new apartment projects.

Most projects take a minimum of two to three years to complete, so we are now facing an absorption problem with many of those apartment buildings finished, creating a glut of new product.

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The other major problem, which is the bigger challenge, is that much of the new product is for high-end renters. What we have is a shortage of affordable apartments. Local rents average about $1,500 a month, and the vacancy rate is at 7.2%.

Builders and investors in multifamily projects face higher material and labor costs compared to pre-pandemic levels, higher financing costs due to higher interest rates and increasingly expensive lots. If it’s expensive to build a unit, it will be expensive to rent a unit.

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The multifamily market is now adjusting with actual declines now in permits pulled and projects started. Multifamily starts in the U.S. are running nearly 50% below their year-ago pace. This is also true regionally for both single and multifamily permits.

But the conundrum is that less supply isn’t necessarily good, because we do have a structural shortage of housing. Lower supply also means more upward pressure on prices.

The U.S. median price of a new condo has increased from $450,000 in 2018 to $550,000 in 2023. But building mostly high-end housing isn’t the solution. The National Low Income Housing Coalition estimates the U.S. is short 7.3 million housing units for low-income renters. Many cities have mandates for builders to construct a certain percentage of affordable units, but that’s not enough, and waiting lists are long for prospective tenants.

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Montana is experiencing an influx of homebuyers from more expensive regions. To get ahead of the affordability issue, they’ve legalized several meaningful measures like allowing accessory dwelling units on any lot with a detached home. They’ve legalized dense housing and mixed-use buildings within all commercial zones.

Montana’s new laws also allow duplexes on any residential lot. New residential construction only allows one parking space per home. They’ve accelerated the permit review process.

These may seem like radical ideas, but I’d rather get ahead of the problem before middle-class workers and their families decide not to live here.

Other Gazette articles, TV segments and DDES monthly economic dashboards can be found at ddestrategies.org.



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Colorado

The presiding judge of Colorado Springs Municipal Court will retire

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The presiding judge of Colorado Springs Municipal Court will retire


HayDen William Kane II is retiring as the presiding judge and administrator of Colorado Springs Municipal Court, city officials announced Friday. His last day on the bench will be Aug. 3. Kane joined the court as an associate judge in 2001 and became the presiding judge in 2007. He has served as the court’s full-time […]



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Three-quarters of Coloradans are worried they can’t afford to live here, poll finds

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Three-quarters of Coloradans are worried they can’t afford to live here, poll finds


Three-quarters of Colorado residents said they were worried about whether they would be able to afford to continue living in the state, according to a poll conducted this spring.

Last year, about 70% of people responding to the Colorado Health Foundation’s annual Pulse poll said they weren’t sure living here would remain financially feasible. That rose to 76% this year.

“That majority concern was cutting across regions, across income levels, across racial and ethnic groups,” said Lucia Del Puppo, senior vice president at FM3 Research, which works with Democrats.

The poll found that the majority of those sampled said they had already cut back on entertainment spending and charitable giving, with smaller shares saying they’d skipped meals, delayed medical or dental care, or paid a utility bill late.

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Only about one in four people said they hadn’t changed their spending or dealt with a financial setback in the last year, with older people and Republicans reporting less budget strain.

“It’s significant and it affects the overall economy” when people reduce their discretionary spending, said Lori Weigel, principal of New Bridge Strategy, which works with Republicans.

The responses suggested a significant minority expected further financial strains in the coming year:

  • About two in five worried they or a family member would lose health insurance
  • Three in 10 worried about affording enough food
  • One-third thought they might lose their housing because they couldn’t afford their mortgage or rent

Notably, more than half of renters were worried about whether they could continue to afford their housing, Weigel said. One-third said they’d avoided asking their landlords to fix problems to avoid rent increases, and one-quarter said they’d taken on high-interest debt, such as payday loans or credit card balances, to deal with housing costs, she said.

Lower-income people and those who identified as Black, Hispanic or Native American reported greater financial struggles than other groups.

Even people who haven’t had to cut back are worried about affordability. When asked to rate the seriousness of a list of potential problems, 85% said both the general cost of living and the cost of housing were either “very serious” or “extremely serious.” Additionally, 82% said the cost of health care was a very serious or extremely serious problem.

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Younger people were particularly worried about housing costs, with 94% of millennials and 90% of Generation Z members describing the problem as very or extremely serious.

At the same time, when respondents got the chance to name the most important issue facing the state, the largest share — 28% — chose government and politics. The cost of living and inflation came close behind, with 25% deeming it the top issue.



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Winter Park to host free rooftop celebration honoring Colorado 150

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Winter Park to host free rooftop celebration honoring Colorado 150


Winter Park will celebrate Colorado’s 150th anniversary of statehood and the nation’s upcoming 250th anniversary with musical performances and a drone show.

Hosted by the Town of Winter Park, the celebration will take place Friday, July 17 on the rooftop parking structure adjacent to Cooper Creek Square. The venue will be transformed into an open-air gathering space featuring a performance stage, a drone show, a photo booth, food and beverage vendors and seating for attendees.

Live entertainment begins at 5 p.m. with the Jessica Jones Trio featuring Kory Montgomery and Tommy Shugart. Hazel Miller & the Collective, one of Colorado’s best-known live acts, will take the stage from 7:15 to 9 p.m.



The evening will conclude with a drone show from 9 to approximately 9:30 p.m., illuminating the sky in honor of Colorado’s sesquicentennial and America’s semiquincentennial.

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Guests are encouraged to explore the Cooper Creek Square Entertainment District before and during the event. Beverages purchased from participating businesses in the district may be brought to the rooftop, where additional beverage vendors and light snacks will also be available.



The free community celebration is supported by the Colorado Tourism Office and is part of the statewide America 250–Colorado 150 commemoration, which recognizes Colorado’s 150 years of statehood and the nation’s 250th anniversary in 2026. 





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