The Affordable Housing Conundrum
Affordable Rents and High Construction Costs do not mix well.
Prior to the corona virus pandemic, housing supply was not keeping up with demand growth. As more households sought fewer rental units, prices climbed. The pandemic will likely exacerbate the country’s affordable housing crisis by slowing supply growth AND reducing household incomes.
A shortage of affordable housing is not unique to the Gunnison Valley. The Colorado Department of Local Affairs estimates 280,000 Colorado households dedicate at least half of their income to their housing, roughly 13.3% of the state. That’s a monthly budget chunk that puts people at financial risk and can destabilize communities, according to Housing Colorado.
For Colorado’s mountain communities, building more affordable rental housing is more challenging than for urban areas. According to Elena Wilken, the Executive Director of Housing Colorado, a nonprofit policy organization, “The cost of construction is just as high as it is in Denver if not higher. The labor is more expensive; your materials have to be shipped. Nothing changes in that equation except the rents are lower.”
Throughout the pandemic, populations will continue to grow, increasing the need for more housing. Building enough units to keep housing affordable will require careful attention to costs. High construction costs are ultimately passed on to renters, making housing less affordable. Understanding the specific costs of housing construction will be the first step towards finding ways to reduce costs.
Density is the elephant in the room. Proponents of affordable housing hail it as a solution, while for opponents, density is synonymous with eyesore. As we seek to reopen our country in the wake of the pandemic, creative solutions are heralded as necessary. Finding ways to be creative with density will likewise be necessary for building enough housing at affordable costs.
This post was originally published on 6/16/20 on The Corner at Brush Creek website.