Colorado Community Media reporter Stephanie Mason interviewed Robert Golden, president and CEO of the South Metro Denver Chamber of Commerce, about the impact of rising home prices on the area.
How has the rising cost of single-family homes affected the south metro Denver economy?
This is a statewide issue, but specifically in our south metro area, the situation we are in now is historically low inventories of not just single-family homes, but of townhomes and multi-unit dwellings. Yet, there is a tremendous demand because so many people are coming to Colorado and, particularly, Denver and the Front Range. It is a low-supply and high-demand market.
What we are finding is that with businesses relocating and expanding in the south metro area, it is difficult for them to relocate their companies if they cannot find places for employees to live. They are finding out that it is very difficult to approach their employees and tell them that the housing market is very expensive and it is hard to find a house. That is a significant economic impact.
I have a millennial son who makes a good income and wants to buy a home, but he cannot find a condominium or a townhome, so he is getting discouraged.
How important is a healthy housing market to the economy?
When a small family buys a house, they are putting roots down. They decide that, say, Centennial, is where they are going to raise their family, make friends and spend their money.
When you rent - and I am not criticizing people who rent - it is not permanent and not putting down roots. Home ownership creates community.
Because the south metro area is growing so much from a business perspective and people are relocating, opening or expanding their businesses here, people need a place to live within reasonable distance.
How can construction-defects legislation improve the housing situation in the south metro area and beyond?
We firmly believe that it is one of our legislative priorities that construction litigation reform will stimulate the housing market from a construction standpoint, particularly more inventory being built in the condominium and townhouse, multi-unit market. We believe that there needs to be changes in the litigation environment.
We don't advocate that homeowners shouldn't have rights. If you have legitimate claims against a builder, the law should protect you. What we are advocating for are modifications to the legal rights and the litigation that can be brought against homeowners and developers.
Do wages need to rise in the metro area in order to keep up with housing and rental costs?
Under the current circumstances, yeah.
What will the long-term impact be of high housing costs in the south metro area? Will the current trend continue or will prices level out?
I've always believed that as the housing market goes, the economy goes and vice versa. We are starting to see stabilization in the housing market. Prices are creeping up a little bit, but the prices have stabilized to an extent. There is still a long way to go. I do not foresee a housing crisis or a housing crash coming any time soon.