LOVELAND — A panel of four real estate experts believe the lack of affordable housing in the region is nearing a critical point and could negatively affect economic development in cities like Fort Collins, Loveland, Greeley and Boulder.
The solution, they said, won’t come from one source. It needs to come from a variety of sources including local governments, nonprofits, the Legislature and the private sector.
About 400 attendees of the 18th annual Northern Colorado Real Estate Conference presented Wednesday in Loveland, heard panelists discuss topics of affordable housing and downtown development and the need for public-private partnerships.
David Schwartz, an economist and vice president in the Denver office of Economic & Planning Systems Inc., a land economics consulting firm, said incomes have not been keeping pace with the increased cost of housing.
Schwartz defines affordable housing as having to pay no more than 30 percent of income, whether it’s buying or renting. “It’s a critical issue when employers have trouble finding workers for their jobs.”
Workers, especially those in retail and service industries are being forced to find housing outside the cities in which they work.
Nick Hansen, managing partner and broker at The Group Inc. in Fort Collins, said Millennials, those in their 20s and early 30s, are exacerbating the problem in urban areas.
“Millennials are willing to pay 50 percent of their income on housing so they can live in urban settings. That drives up rents and pushes out others who can’t afford that,” Hansen said.
David Everitt, CEO of Everitt Enterprises Inc. in Fort Collins, said part of solving the shortage of affordable housing is to increase the wealth of buyers. “Private businesses need to become involved,” he said.
Schwartz said the cost of land and building materials has continued to increase, making it difficult for developers to deliver affordable housing.
“You can only make a home so affordable, before it dissolves on itself,” Everitt said. “You can no longer build a house for $175,000. “Part of the solution is creating wealth of buyers,” Everitt said, which is tied to luring companies with higher paying jobs.
Bruce James, a shareholder with Denver law firm Brownstein Hyatt Farber Schreck, added, “We need housing that employees can afford. It’s hard to draw companies into Colorado compared with other regions. They need to know there is affordable housing available for their employees.”
James said his office is keeping a close eye on pending legislation regarding liability issues over construction defects. As it stands, builders can be accountable for building defects for up to eight years. “A lot can go wrong in eight years,” that isn’t related to how it was constructed,” James said. He added that if that time period were reduced, insurance costs paid by developers could be reduced, and reduce the cost of homes.
The panel suggested that municipalities re-evaluate their codes pertaining to affordable housing. James said while some cities require a portion of a housing development to provide a percentage of affordable housing, it would be good to allow developers to build the affordable housing segment of the project elsewhere in a city.
The conference included a keynote address from Denver mayor Michael Hancock who said Denver and Northern Colorado has experienced unprecedented growth and that many of new developments in Denver have been aided by creative public-private partnerships.
He said to be successful in economic development, “We must compete globally as a region, not as individual cities.
A panel discussing downtown developments in Northern Colorado said because the high cost of land and the desire to be downtown, new projects will need to be financed through public-private partnerships.
Troy McWhinney, chief investment officer and co-founder of Loveland-based McWhinney, was named Real Estate Entrepreneur of the Year by the Everitt Real Estate Center at the College of Business at Colorado State University.
The award, recognizing the real estate development company’s positive impact on the Northern Colorado region over the past two decades.
The event was presented by Colorado State’s College of Business, its Everitt Real Estate Center along with the Northern Colorado Commercial Association of Realtors at the Embassy Suites in Loveland.