Survey: Affordable Apartments Scarce for Colorado Mortgage Applicants, Buyers
With home prices in Denver at an all-time high, the following should come as no surprise:
- Affordable apartments are hard to find in that metro area, according to a survey released Tuesday by the Colorado Division of Housing.
This is the first study of its kind conducted by the state - and the numbers aren’t encouraging for low- to middle-income families hoping to take out a Colorado mortgag
e. Across the seven-county metro area, the vacancy rate for affordable units is 3.8 percent, below the 5 percent mark that researchers say is the point where the market is considered tight.
“We have a real crunch with these affordable units,” said Kathi Williams, director of the Colorado Division of Housing.
Gordon Von Stroh, a professor and researcher at the University of Denver, conducted the inaugural Colorado affordable housing study. He regularly tracks apartment and rental vacancies throughout the state. In his last quarterly report, Von Stroh recorded a metro-area apartment vacancy rate of 6.7 percent.
Affordable units - defined by the study as units that have deed restrictions of rental rates due to federal, state or local subsidies - are likely to become more scarce in the near future, Von Stroh said.
“The market is super tight, and it will continue to tighten as the economy improves,” Von Stroh said.
Usually an improving economy is good news, but Williams said investors, especially from California, are driving up prices and rents. Government organizations, such as local housing authorities, are having a harder time buying older properties because of the increased capital chasing apartment units, particularly in the Denver housing market.
Increasing construction rates, on the other hand, make it difficult to build new affordable housing developments.
Some counties are hurting more for affordable housing than others, according to the study. Affordable housing units in Arapahoe County are particularly scarce at 1.3 percent, while Douglas County, generally considered one of the most affluent areas, posts a 6.8 percent vacancy rate for affordable apartment units.
Statewide, the average vacancy rate for affordable apartments is 4.7 percent. In order for home loan demand to increase, that will have to rise.