Why is real estate so expensive in Boulder? (Denver, Westminster: apartment, rentals)

[Stevemon]

I can't figure out the economics of why real estate in Boulder is so much higher than other places in the US. Is it the university? Is it a bedroom community for Denver? Seems pretty far out to be a commuter town. I'm a CPA looking to relocate to Boudler and I'm surprised at the lack of accounting & finance jobs in Boulder, and when I do find one, the pay rate is barely enough to cover housing. Any insight into what is supporting real estate in Boulder will be greatly appreciated.

[Mach50]

Highly desirable + limited land to build on. Boulder has a mountainous terrain and also have an open space initiative.

[Neditate]

Mach50 hit it right on the head. Simple: supply and demand. Boulder is very protective of open space and there has not been significant housing development in the city. Since the housing supply in Boulder isn't growing and the demand is very high prices have always gone up over the years.
Boulder is not a bedroom community for Denver, Boulder stands on its own. The traffic flow shows that more vehicles drive into Boulder for work than out of Boulder.

[Idlewile]

^ Completely accurate. Throw in as well what many consider perfect weather with seasons, incredible recreational activities, charming downtown, extremely scenic setting, very good schools and a dynamic university and it's no wonder.

[sunsprit]

More to the point, Boulder set out years ago to aggressively limit the amount of development in the area by restricting the number of residential building permits, using public monies to buy up open space land to keep it out of development, and implementing zoning policies which limited the functional use of a lot of existing properties as well as making it prohibitively expensive to build new ones.

They aggressively sought to drive out businesses which didn't fit their paradigm of what they wanted to have around, so the remaining businesses saw their overhead, taxes, insurance, and costs of operation go way up. What started as a student led movement of preserving exclusivity ultimately landed on the pages of the Daily Camera and from there, onto members of the City Council and like minded hires within the city management, Z&P dep't, and so forth.

I was there to see the beginnings of this trend ... a desirable college town at the foot of nice Colorado mountains with ready access to all the outdoor activity that is on offer in the area ... from the time that Boulder was affordable to when the regulations came into play and drove the prices sky-high even then. By way of comparison, I bought a three story brick house on the Hill for $30K where I was renting a room (shared bath down the hall) for $45/month when the owner graduated CU and was drafted. He'd bought the place for a couple thou less and made it cash flow with the room rentals; he lived in the fully finished out basement apartment ... 2 bedrooms, 1 bath, sizable kitchen and open space. Cool in the summer, warm and cozy in the winter with the boiler plant and laundry down there. I cashed out very quickly for a modest profit ... who knew then that it would be a mid 6-figure property in a few years and closer now to $1mil? The next year, I paid $75 for the same room, and the year afterwards, it doubled in price. Very quickly, it became less expensive for me to live in Denver and commute to Boulder than the other way around, and so I moved to Denver and found a comfortable 2 bd/1ba basement apartment for $47.50/month, including all utilities. Even with the cost of the Toll Road, it was still more economical to do so in the era of sub 30-cent gasoline.

In later years, I bought acreage just over the county line with a gorgeous horse property for a fraction of the price it would have brought in Boulder. Other than the county line and the whole change in zoning and use, you wouldn't know the difference between being in Boulder or Larimer county. But the marketplace does. If you want to live in Boulder, you get to pay the price.

Bottom line: by limiting supply and having a significant demand, Boulder's price structure is an artificial construct.

[Katarina Witt]

Agree with most of the above, but highest housing prices in the US? I don't think so!

[Stevemon]

Thanks for the detailed explanation that's understandable. So the next question is, how can the locals afford such high rents/mortgages with just average paying jobs? 40-year notes or leveraged to the max?

[Mach50]

Originally Posted by Stevemon

Thanks for the detailed explanation that's understandable. So the next question is, how can the locals afford such high rents/mortgages with just average paying jobs? 40-year notes or leveraged to the max?

The same way they do in any expensive area...roommates, no-to-low debt or going into debt. Many "locals" live outside of Boulder in nearby Louisville or Broomfield if they have families.

[Idlewile]

Because there really is limited, (expensive) housing in Boulder, many live in neighboring towns, that's what we did once we had a family. Louisville, Superior, Lafayette, Broomfield, Westminster, etc. etc.

Those that we know that live IN Boulder and have families - and many do - make quite a bit of money, and yes, working IN Boulder. A few of those people happen to have family money too. The rest inherited a house that cost nothing 25+ years ago.

[qfrost]

Another reason why - cause it's the closest you can get to heaven without being *IN* the mountains.