Over the last few years, Denver has become one of the least affordable metro areas in the country. While home prices in particular have grabbed headlines for their meteoric rise, rents have also gone up, up, up. Guidelines for how much income you’re supposed to spend on rent or a mortgage don’t really mean anything if there’s simply nothing available in that range. Whether they rent or own, more and more people are house-poor by necessity rather than choice. These dual charts for home values and rent prices from CNN Money offer a great visual aid to understand how stark and how recent this change has been.
Potential Resources for Denver Households
The Denver Office of Economic Development provides funding and assistance for a variety of affordable housing programs. Several of these programs operate behind the scenes in partnership between the public sector and private developers/lenders.
- In contrast, a new two-year pilot program, LIVE Denver makes it even easier to qualify for and access financial assistance to lower your rent. LIVE stands for the Lower Income Voucher Equity program. The quick and easy explanation for this program is that it’s meant to address the oversupply of luxury apartments that have dominated real estate development over the last 5-8 years especially. To qualify, individuals need to make between $23,500 and $47,000 a year and a family of four must be between $33,500 to $67,000.
- As part of the LIVE Denver program, participants are able to set a portion of their rent aside to use as a down payment on a house. Finding ways to reduce the cost barriers to homeownership is another important component to making housing more affordable overall. First-time home buyer programs are available to many. There is also momentum toward reducing the ancillary costs of buying or selling a home in Denver with lower real estate commission fees.
- Embrace a minimalist lifestyle and look to maximize every square foot of your home. Tiny houses and micro apartments may still be a relatively small segment of the rental and housing markets, but the popular trend toward McMansions, never as strong in Denver as other areas of the country, seems to have stalled and may even be reversing itself. Check out this feature article from the Denver Post about how other people have made a tiny Denver apartment unit work for them.
- More than a few tentative living arrangements for boomerang kids have morphed into full-blown multi-generational households. New analysis from the Pew Research Center shows a record 64 million Americans living in multi-generational households and approaching levels not seen since the 1950s as a percentage of total households. Adult children who have graduated from college with considerable student debt and comparatively modest income earnings can’t solve their financial troubles in a single year. Their aging parents, meanwhile, are eyeing ways to get to their retirement earlier, while still protecting a nest egg for their children.
Learning from Other Cities and Staying Ahead of the Curves
The silver lining is that city and county officials have been tracking the situation in Denver as well as what is happening in other cities that have been dealing with unaffordable housing costs for several years. When people struggle to afford their housing costs, they have less to spend on other things, they have to travel farther for work increasing traffic congestion, and they’re more likely to move to a city with a lower cost of living. Due to higher labor wages and higher rent for their commercial leases, business costs and consumer prices may also jump as a result. There are no perfect solutions, but it’s also a problem that can’t be ignored without risking serious imbalance to the local economy.