Colorado recently released a new analysis from the State Demography Office (SDO), together with Governor Polis and the Department of Local Affairs (DOLA), that paints a clear, though complicated, picture of the state’s housing situation. The report confirms some progress—but also highlights how much more remains to be done. The full report can be found here: Colorado.gov
Here are the main findings, what they mean, and what strategies may help move forward.
What the Report Found
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Housing shortage remains large, but is improving
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In 2023, Colorado faced an estimated shortfall of 106,000 housing units.
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That’s down from a peak shortfall of about 140,000 units in 2019.
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To avoid falling further behind, construction must keep pace
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To prevent the shortage from growing, the state needs about 34,100 new homes per year for the next decade.
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These homes must be occupied by owners or renters—not vacation homes or second homes.
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What has helped—and what’s hurting
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Between 2020 and 2023, Colorado built roughly 43,000 housing units each year, a noticeable increase over previous years. That surge has driven the shortfall down by ~25% in just four years.
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Yet despite improved supply, affordability remains a concern, especially with elevated interest rates and high construction costs.
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New construction activity has begun slowing, which risks undoing some of the gains.
Why It Matters
Housing isn’t just a matter of roofs over heads—it’s foundational to many aspects of people’s lives. When housing is scarce or too expensive it tends to ripple outward:
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Access to jobs and education: If people can’t live near where they work or where good schools are, opportunities shrink.
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Stability and well-being: Homes are tied to health, community engagement, and financial security.
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Community planning: Local governments’ ability to plan for infrastructure, transportation, services get harder when housing growth lags demand.
For Colorado, specifically, this means inaction or delays only amplify the affordability crisis, increase commuting burdens, and stress resources in rapidly growing areas.
What Colorado Is Doing, and What More Might Help
The report doesn’t just diagnose—it also points to the steps already being taken, and suggests avenues for additional progress:
Current Strategies
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State laws aimed at increasing housing supply, especially those that simplify regulations, speed up permitting, support affordable and middle-income housing.
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Investments in infrastructure and grants to help accommodate more dense housing—especially around transit hubs.
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Support for accessory dwelling units (ADUs), modular/manufactured housing, and streamlining review/permit processes.
Areas Needing More Attention
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Keeping up with rising interest rates and construction costs—these are squeezing both builders and buyers.
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Ensuring growth isn’t just in big metro areas—rural and smaller communities have different constraints and needs.
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Making sure housing isn’t just built—but built in ways people can afford, and in places they want to live (proximity to jobs, transit, amenities).
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Ongoing transparency and updated data to guide decisions. The report notes SDO will provide annual updates.
What to Watch Going Forward
Some key indicators to monitor:
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Housing starts/completions vs. projections (are we getting those ~34,000 units/year needed?).
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Cost trends for construction, materials, labor, as well as interest rates.
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Affordability metrics: for renters and buyers (e.g. percent of income spent, debt burdens).
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Geographic distribution of housing growth—both in supply and affordability—to ensure balanced growth across regions.
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Policy implementation: how quickly permits are approved, how fast infrastructure projects happen, how local planning adapts.
Final Thoughts
Colorado is making measurable progress on its decades-long housing shortfall. The drop from ~140,000 units missing in 2019 to ~106,000 in 2023 is significant. But progress alone won’t solve the challenge—especially when affordability pressures are growing, construction is expensive, and supply risks slowing.
Meeting the annual production target, ensuring new homes are affordable, and aligning where housing is built with where people live and work will be crucial. As Colorado continues to refine its strategies, the interplay among state support, local action, and community input will likely determine how close the state can come to closing the housing gap.