Do local growth restrictions impact housing affordability?

Talk to “old timers” (those who have lived in Denver for more than 20 years) and they’ll tell you there is too much change going on: too many people, too much traffic, too much construction and housing prices that are too high. Talk to those newly transplanted and they’ll tell you change (growth) is inevitable when the scenery is beautiful, the activities plentiful and a booming economy.

Some Lakewood residents decided to try to slow the growth by spearheading the Strategic Growth Initiative: a ballot measure that would limit new home permits issued by the city of Lakewood to a 1% annual increase and would require Lakewood City Council to hold a public hearing and vote to approve residential projects with more than 40 units. It was first proposed in 2017. After delays because of a court challenge, Lakewood City Council decided to let the public decide in a special election July 2.

What might the repercussions be if the initiative passes? Let’s look at Boulder’s history. As far back as 1959 Boulder has attempted to limit growth. First, water service was limited to a defined boundary. In 1967, Boulder self-impose a tax to acquire and manage a 45,000-acre greenbelt that now surrounds the city.

Boulderites continued to fight development. In 1971 height restrictions were passed for new development. Following the height limit, the Residential Growth Management System was enacted in 1977 to limit residential growth. After several revisions, the RGMS now limits the rate of residential growth to no more than 1% annually.

In 1995, the city of Golden imposed a 1% annual cap on residential construction, and in 2014, the cap was further reduced to 0.9%. The goal was to preserve Golden’s small-town character. The unintended result is a shortage of housing. Golden has a local labor force of just 11,606, but 25,146 total employees. This means that over half are commuting into Golden causing congestion and stress on infrastructure, plus rising housing costs. Boulder has seen similar pressure with 60,000 commuters entering and leaving the city each day.

What does limiting growth do to housing prices? For the first five months of 2019, the median sale price for a single-family home in metro Denver was $435,000. While that may sound high, Golden’s median is $639,000 and Boulder’s is $905,000! The same disparity can be seen in the rental market. Metro Denver’s average monthly apartment rent as of the first quarter was $1,464. Golden’s was $1,518 and Boulder’s was $1,688.

Today, Lakewood’s housing costs are comparable metro Denver’s. However, if the Strategic Growth Initiative passes, then expect Lakewood to join with Boulder and Golden in becoming unaffordable. There must be a better solution. Send me your ideas.