The Problem: Unaffordable Rents in Colorado
Why is rental housing in Colorado unaffordable?
Growing numbers of Coloradans are being priced out of their homes. Driven by both stagnating incomes and skyrocketing rent increases, many are being forced to make inhumane decisions like cutting down on food or medicine just to keep a roof over their heads, or being forced out of their homes. The current situation is untenable.
In Colorado, landlords increased rents by nearly a third between 2017 and 2023, and some areas saw even higher increases (Castle Rock- 53%, Colorado Springs- 47%, Loveland- 42%, Fort Collins- 37%)
These increases are driven in large part by landlords motivated by profit-seeking. Without government oversight and regulation, most landlords will always seek to maximize the profitability of their property, with a human cost.
The decline of small landlords and the rise of corporate landlords furthers this problem. Corporate landlords are better able to leverage their power to drive up rents and are less willing to consider factors other than profits.
Other drivers include low housing stock, strict zoning and land-use policies.
In 2024, over three-quarters (76%) of the 164,000 Colorado renters with extremely low incomes (incomes at or below the poverty guideline or less than 30% AMI) spent more than half of their income on rent, and there is a shortage of 119,782 rental homes that are affordable and available for rent. Even middle income residents are feeling the pain; over 20% (22.1%) are cost-burdened by housing costs (spending more than a third of their income).
In 2024, 67,000 Colorado renters were behind on rent and at risk of eviction.
A 2023 survey by New Era Colorado found that at least 40% of renters aged 15-34 pay over a third of their income in rent each month. In 17 of Colorado's 64 counties, at least half of renters of the same age pay over a third of their income to rent, and in counties with more young people of color these gaps are even bigger.
The impacts of unaffordable rent are severe. The same survey found that almost half of young people sacrificed health care, over a third skipped buying groceries, and over a quarter are unable to pursue higher education in order to make rent. Almost 40% are looking to leave the state in search of cheaper housing.
In Colorado, a minimum wage worker must work 85 hours a week to afford a 1-bedroom rental at Fair Market Rate, which was $1,601 in 2024, according to their NLIHC's 2024 Out of Reach report.
Why isn't building more housing enough to solve the housing crisis?
Colorado families are struggling – and many are being evicted – TODAY. Most can't wait for 15-20 years until we have enough new housing built that working people can actually afford. Building new affordable units is a key part of the overall solution, preparing our state for the longer term and creating more opportunity – but it's just one tool. These efforts must be bolstered with strong protections for renters, including rent stabilization policies that ensure the cost of rental housing, whether designated as affordable or not, remains reasonable.
A fall 2024 update from the Apartment Association of Metro Denver shows unprecedented growth: the highest 12-month delivery of new apartments ever seen, with over 21,000 units built during that timeframe. Yet, rents have barely moved. In the Denver area – and in Colorado overall – people are struggling to keep up with rising housing costs because the majority of new housing is focused on the luxury market.
Lower income households are not reaping the benefits of new development. The significant lack of options for households earning $75,000 or less has left approximately 650,000 households statewide facing significant levels of housing cost burden. According to the Colorado Futures Center, this has cost the Colorado economy approximately $5.6 billion in foregone spending (about $8,600 per household.)
Research from Harvard's Joint Center for Housing Studies shows that since 2011, Colorado has lost more than 250,000 rental units that were available for $1,000 per month or less. Over the same time period, Colorado added more than 300,000 housing units available for $1,400 per month or more. However, data from the Department of Labor and Employment shows that 67% of jobs in the state don't pay enough for a person to rent a unit at $1,400 without being cost burdened. Harvard's analysis indicates that Colorado has the fourth-smallest share of low-cost rental units in the country.
Why doesn't "affordable housing" stay affordable?
Even "affordable housing" projects whose builders received public money are able to convert them to market rate units after a certain number of years, as determined at the beginning of the contract, which usually expires after only 20-30 years. Between the lag in affordable housing built and rents being increased rapidly– our communities are forced to make untenable choices that prevent them from thriving.
How have state officials helped renters?
Colorado Homes For All and our member organizations worked with state officials to pass eviction protections that prevent discriminatory, retaliatory, and arbitrary evictions, but more must be done to prevent renters from corporate landlords' unsurmountable rent increases. We need state officials to remove road blocks that prevent local governments from providing much needed relief now.
The Solution: Rent Stabilization
What's the difference between rent stabilization and rent control?
- Rent stabilization protects tenants from unreasonable rent increases while still allowing landlords to increase rent yearly at a fair rate. This fair rate provides landlords a fair return on investment while providing renters stability.
- Rent control freezes rent as long as tenants stay in place.
How does rent stabilization help renters?
Research shows rent stabilization improves renter stability and prevents displacement of families.
Caps on rent increases allow renters to stay in their communities and avoid the displacement impacts of gentrification. The spillover benefits of this are significant; tenants safe from unpredictably high rent increases are able to give their children a stable school life (instead of having to move their children to another school due to a move), build community, and rely on proximity to a job.
Over 180 jurisdictions across the US have rent stabilization ordinances in place:
- In New Jersey, cities with rent stabilization had 10% lower growth in median rents than cities without rent regulations.
- In Washington, DC, rent stabilization has successfully limited increases without impacting housing stock maintenance; the share of rental units in poor physical condition actually declined after rent stabilization was implemented.
- In Oakland, California, rent stabilization has successfully allowed lower socioeconomic status residents to remain in their communities.
- In San Francisco, renters who were covered by rent stabilization were 19% more likely to remain in their home communities than those who didn't.
- In NYC, tenants in rent-regulated units were three times as likely to have lived in their homes for 20 years or more (23% v 7 %). In Manhattan, they were 10 times as likely to have that length of tenure (35% v 3%).
Several studies have found that rent stabilization does not decrease construction of new homes.
A key benefit of rent stabilization is its ability to mitigate power imbalances between tenants and corporate landlords.
While construction of new affordable housing stock is important, it can take years to meet current demand and the resulting homes can often be quickly converted to non-affordable housing; this is especially true given the power of the real estate and landlord lobby and the current political climate, which is likely to cause affordable housing regulations to change. People need rental relief now, and rent stabilization provides it.
While research on the impacts of rent stabilization on other aspects of the housing market is unclear, there is agreement in the empirical literature that these policies accomplish their primary goal of maintaining affordable rental rates.
There is little empirical evidence suggesting that rent stabilization negatively impacts new construction.
Is rent stabilization long-term structural change?
Yes, rent stabilization policies allow local officials to balance the needs of their constituents, both renters and landlords, instead of relying solely on market forces – which rely primarily on profits. Rent stabilization is a long-term change that provides renters the chance to plan for reasonable rent increases while preventing displacement.
Why can't local officials pass rent stabilization policies?
In 1981, the state legislature passed a broadly worded bill – now a law– that took away the rights of cities and counties to pass any local ordinances that could be considered rent control on private housing, including local ordinances that would stabilize rents. Local officials are currently prohibited from addressing their constituents' need for affordable rents, preventing them from maintaining and building the thriving communities they want.
Did the 'Telluride' decision ban rent control?
No, in 2000 the Colorado Supreme Court issued a ruling, in the case commonly referred to as "Telluride," that a city cannot require developers to set aside a portion of new units that must be rented at below market rate. In its decision, the court cited the broadly-worded rent control law still in place from 1981.
In 2021 a narrowly worded bill amended the original rent control law, clarifying that cities/counties are actually permitted to require developers to set aside new units for affordable housing under their authority to regulate land use.
Is there a way to give local governments the power to create rent stabilization policies?
Yes, by overturning the state ban on rent stabilization. By putting the power back into the hands of local elected officials and residents, they can adopt the housing policies they need to ensure safe, sustainable and affordable communities.
Are local officials supportive of overturning the ban on rent stabilization?
In 2023, 42 elected city and county officials joined us in supporting local control of rents. They recognized the need to pass rent stabilization ordinances that address their constituents' needs for affordable rents. While we were unsuccessful in removing the ban in 2023, we have local and state elected officials collaborating with us to win in the near future.
How can you help overturn the ban on rent stabilization?
As Coloradans – Black, brown and white, younger and older, veteran and immigrant and people living with disabilities – we must come together to ensure that families have warm, stable homes and landlords are held accountable for charging reasonable rent. Help us ensure we all have a place to call home and put the power back in the hands of local elected officials and residents.
Where can I find out more about rent stabilization policies?
Looking for more details about where rent stabilization works? Check out the Our Homes, Our Future: How Rent Control Can Build Stable, Healthy Communities report.
Curious about local rent stabilization policies? Check out the Stable Rents, Rooted Communities: A Practical Guide For Building A Local Rent Stabilization Policy report.
