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|Housing Economic Impact Study|
Report Published January 2017The report, which analyzed data from 2015, studies the impact of new home construction in Colorado and what type of housing is still needed. Author Dr. Elliot Eisenberg, a nationally acclaimed economist specializing in local and national housing markets, provides a thought-provoking discussion on housing policies and economic implications for Colorado. Themes discussed in the report include:
1. Is Colorado’s current housing market healthy and sustainable – how does the Denver region and greater Colorado compare to other housing markets around the country, and what are the local trends that will impact Colorado over the next several years. With more and more people choosing to make Colorado their home, will this trend create more housing opportunity for everyone, or will the market become more challenging.
2. All types of housing have a tremendous immediate and long-term impact – thousands of jobs supported, millions in income generated, and reinvestment to create thriving local economies. Whether it is market-rate housing or an affordable product, data confirms that housing development and rehabilitation is good ROI.
In 2015, the year of analysis of this study:
· The overall economic impact of the home building analyzed in this report was $10.8 billion, 3.4% of the entire gross state product of Colorado.
· New home building and rehabilitation analyzed in this report created 151,304 full-time equivalent jobs, more than 5.9% of the entire Colorado labor force, and
· New home construction and rehabilitation analyzed in this report resulted in new revenues to state and local governments totaling $2.45 billion.
3. All types of housing are needed – communities must provide diversity in housing products to meet all their needs. Is there an imbalance and what are the key findings that reflect shortages in certain housing types, and what strategies can communities use to encourage a greater mix of housing options.
Colorado’s exceptional population boom creates a wide variety of housing demand across the state. According to this study, construction development in 2015 resulted in the creation of 15,439 market-rate single-family homes, 9,610 market-rate multifamily homes, 977 rent-subsidized homes, and the rehabilitation of 651 rent-subsidized homes. Nonetheless, with 100,000 new residents expected each year, the affordability gap will continue to widen without creative solutions to issues surrounding housing regulations, financing, and demand. The National Association of Home Builders determined that every $1,000 increase in the price of a Denver metro home prices out 1,791 local households and 2,540 households statewide. As millennials begin to move out from their parents’ homes and baby boomers continue to downsize, the housing community must leverage new and rehabilitated housing to accommodate the varying housing needs of residents with diverse incomes, ages, careers, family sizes, and lifestyles.
4. Why affordable housing is a critical component to healthy, stable communities – what are the market variables that are driving up the demand, and how affordable housing on its own is an economic stimulator.
The one year combined state and local economic impact of building 977 rent-subsidized multifamily homes in Colorado include:
· $158.5 million in local income
· $25.8 million in taxes and other revenues for all local governments, and
· 1,996 full-time equivalent jobs
The one year combined state and local economic impact of building 9,610 market-rate multifamily homes in Colorado include:
· $4 billion in local income
· $784.5 million in taxes and other revenues for all local governments, and
· 51,046 full-time equivalent jobs
A preview of a supplemental report was released alongside this report from the Colorado Futures Foundation and Shift Research Lab. Download the supplemental preview of Housing Affordability Facts.
For a visual depiction of the data found in the report, download the powerpoint presentation.
The report, which analyzed data from 2013, aims to provide a better understand the impacts of new home construction in Colorado and what type of housing is still needed. This year's report included a supplemental study focused on data from Adams County. This was published and released December of 2014.