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Gov. Polis says housing costs are at a crisis level in CO, more construction could bring back affordability

Governor promotes policies he says will lead to more "starter home" construction
Governor Jared Polis.jpg
Posted at 12:01 PM, Feb 07, 2024
and last updated 2024-02-07 16:49:04-05

DENVER — Governor Jared Polis sat down with Denver7 morning anchor Nicole Brady to talk about his legislative agenda to bring housing costs down. The following is a portion of the interview:

Nicole Brady: Governor Polis, thanks so much for talking about this issue. Housing was the first thing you talked about in your state of the state address this year, so it’s something you think about a lot?

Governor Jared Polis: I’m not the only Coloradan who thinks about housing costs a lot, Nicole, I think that's really one of the main frustrations people have. Colorado is a great place to live. But it's simply too costly. Some experience it as 'my rent is too high,' some experience it as 26 year olds living in their parents’ basement and can never afford to buy a home on their own. Others are forced to live 40 minutes from work. We’ve got to find ways to reduce construction costs, get things approved quicker, and especially, allow more homes to be built closer to where those jobs are and along transit corridors.

NB: Your office sent me a poll from Centennial State Prosperity (a political action group) that found 95% of Colorado are scared the cost of renting or buying a home is a problem. This tells me this is not just people who are on the edge of eviction, this could be people who already have a house, they just can't afford to move into the house they want.

Governor Polis: Yes, even a senior who wants to downsize. When you look at the mortgage interest rates, you can’t afford even to downsize right now. So it's really challenging. It's hard to get 95% of Coloradans to agree on anything. So the fact that people identify this as an issue is really a call for our leaders, Republicans and Democrats, to say 'let's address this head on.'

NB: Instead of last year's omnibus land use bill, is the idea to introduce bills that might have a chance of passing on their own? Even if cities come back and say 'we don't like the ADU measure,' is the goal to make sure that Democrats can say we got something done?

Governor Polis: Well ,first of all, I think most of these bills are bipartisan. The ADU bill, as an example, it’s Republicans and Democrats coming forward with this. And yes, there's no one silver bullet to housing. There are many things we need to do from reducing construction, liability costs and insurance to allowing homes to be built closer to jobs. And if you want to be able to build an accessory dwelling, you should be able to. If we can change that playing field, this will really pay big dividends in terms of more affordable housing near job centers over the next four years.

NB: I know some of the goals this year are to incentivize developers to be building closer to transit and more environmentally conscious structures. We often hear builders like to build where they can make money. How do you incentivize builders to build what's needed?

Governor Polis: So we have a tax credit package that will basically provide additional incentives to reduce the cost of housing near transit and job centers. And of course, people can buy homes wherever they want. But the thing is, when people are buying farther and farther out, it's more cars on the road and more traffic. And that's a cost for all of us. Many people do it out of necessity. They don't want to have a 40-minute commute, but they can't afford to live 10 minutes from work. More Coloradans want that opportunity to live affordably, close to their job. Allowing more multifamily units to be built is a key part of that. Also, tax credits that help reduce the costs and making sure that we can have the transit to support it. If you're going to have more places for people to live, you want to make sure it's not at the expense of our quality of life for those of us who live here with more traffic, so it has to be done in a way where it's near work and on transit corridors.

NB: How are you appealing to (cities) this time around? How do you tell another city 'you should you should be allowing people to build ADU’s in their backyards, in Lone Tree and Westminster in a variety of different cities?'

Governor Polis: The same poll you cited also said 70% of Coloradans believe their local government isn't doing enough to support housing. We want local creativity, but we also don't want to see a lack of action. This has reached a crisis level in our state. In the Denver metro area, the average home price is $600,000. In Boulder, it’s a million dollars. If we don't take action, look at states like California, 10 or 15 years from now, the average home price in the metro area could easily be over a million dollars.

NB: We got to this problem in a little over three years, since we saw those that surge in home prices since the pandemic, compounded by the rise in interest rates, which we don't think are ever going to go back to where they were.

Governor Polis: They've come down a little, thankfully. And that's not in our control in Colorado, of course. And to be clear, housing was getting expensive three or four years ago, but it's just gotten that much worse. Economics is a function of supply and demand. Good news is demand is high, people want to live here. But supply has been artificially constrained. We've simply not allowed the most affordable kinds of homes, starter homes, multifamily accessory dwelling units. That’s why it's hard to find a home for $200,000 or $300,000 in the Denver metro area. And for many, that's the step to homeownership in their 20s and their 30s. They can’t afford a $600,000 home right out of the gate. You have to build equity. And if you're paying rent that whole time, you'll never be able to save up enough to afford a $600,000 or $700,000 home.

NB: I know you can't predict the future, but what would success be? How many years does it take to get us back to what we might consider affordable, near 2019 levels?

Governor Polis: I hope that if we get the right policies in place it'll lead to more of those starter type homes to be built. We need those kinds of opportunities in areas people want to live, including multifamily, including condos. If they're a young couple, maybe 10 years later if they have kids, then they have the equity where they can build or buy a single-family home. But fundamentally, we need to remove some of these artificial restrictions on supply that have forced prices up artificially, because we simply haven't allowed the homes to be built to keep up.

Governor Polis on Colorado housing crisis

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