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What Is Behind The Affordable Housing Shortage In Colorado
I hear it every day from my buyers. “Why aren’t there any homes in the $100,000 range?!” I tell them that homes in that range are usually condos or townhomes and they just aren’t building those anymore because out legislation effectively chased would-be condo developers out of our state. Taking that more affordable option away from today’s buyers is a big reason we have a housing crisis especially for first time buyers and those looking for something more reasonable than the average $300,000 it takes to buy a home now.
Known as the Construction-defect law it puts more liability on builders than in any other state and opens them up to lawsuits and criminal prosecution. The law in theory was meant to protect home buyers but instead chased condo builders out. For example, prior to the legislation 9 years ago, 25% of new homes built were condos, now it’s just over 3%. And of those, 50% are priced over $350,000. In Downtown Denver 870 condos or townhomes were built verses just 59 last year according to the Downtown Denver Partnership.
As a real estate professional I see the effect this is having on young buyers and those looking for an affordable home. The fact that this issue has not been addressed more urgently in the face of an affordable housing crisis speaks to the fact lobbyist representing the apartment builders have kept reform from happening statewide. Their end goal is to keep renters forever and affordable condos and townhomes out of Colorado.
No surprise proponents of reform blame Colorado’s construction defect law for the condo shortage saying the law makes it easy for homeowners to sue. In turn they argue insurance companies have jacked up rates for condo builders and they can’t justify the risk. And those seeking affordable housing to buy are suffering the most.
A lack of condo units for sale has caused extended concern as housing prices and rents have soared to record levels. If the legislation does not act now to reform the law to protect BOTH consumers and builders as it is done in other states, the dream of home ownership is out of reach for a large percentage of the population in Colorado. Call your local representative and urge them to pass reform to the Construction-Defect Law now.
As a Colorado native, real estate broker since 2006, and real estate investor for over 15 years I have the expertise and knowledge to help guide you and your family through the most important transact....
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