Housing affordability down in Fort Collins (Denver, Boulder: 2014, rental market, credit)

[jwiley]

Over the years I have noticed the way prices seem to keep increasing, the Coloradoan is starting a series of articles about the high costs of living in Fort Collins and the way that lower income families are struggling to get through it.

In 2013, the average home price in Fort Collins was $276,340, a nearly $20,000 increase beyond 2012 prices.

“The area median income has gone down for the last two years and the average rents have continued to step up every year, aggravating an existing trend,” said Sue Beck-Ferkiss, social sustainability specialist with the city of Fort Collins.

http://www.coloradoan.com/apps/pbcs....nclick_check=1

I thought it might be a good topic to discuss what can be done, as the job growth in Fort collins is terrible, and with the restrictions on growing the town is very limited due to restrictions put in place almost 20 years ago the housing costs are more than likely going to get worse. Personally I would not mind if they were to start giving some incentives to companies to move their operations to Fort Collins to help pay long term for the growth that we are seeing, otherwise we are going to end up like Boulder, where very few can actually afford to actually own their own homes.

[MountainK]

Interesting topic. Fort Collins is high on my list of retirement destinations, but (depending on the data source) housing in FoCo is more expensive than in some of the Denver metro areas. But I think the broader issue is how/if the city addresses this or if FoCo ends up being like Boulder, as you mention. I have no idea how to address this problem on a macro level as it seems that prices have been increased based on supply/demand. Maybe demand will decline as prices continue to increase or maybe affordable housing will become available (I am skeptical.)

[nevada1427]

Great topic. Would love to hear others opinions.

[xeric]

Well there are all kinds of theories. The pro-business side (for lack of a better term) maintains that there are too many restrictions on development. Even though we don't have an annual limit on new housing (like Boulder), the thought is that restrictions are like a continuum in that the more you have, the higher it will drive the cost of living.

Some claim that the 3 unrelated law has something to do with it. This law has been in existence for decades but recently the enforcement of it was beefed up. The argument is that if landlords can only rent to three un-related tenants, even if their houses have four or more bedrooms then that artificially tightens the rental market supply.

Then there's the whole housing bubble syndrome. Housing prices become artificially inflated when there is easy credit and the unnaturally rapid turnover of homes. Of course that's supposedly been corrected now, but old habits die hard.

[Sunderpig2]

The factors seem simple to me. Anytime you have a desirable location, you'll have higher costs. Then add to that the increase in population, and shortage of homes, and you get the classic "supply and demand" effect (builders know that they can get away with higher costs). Also, the town is a bit land-locked with Wellington and Laporte to the north, the Foothills to the west, and the FC/Loveland "buffer zone" to the south. So there are only pockets of land that come up at times for development. There are lots of people too that don't want an overdeveloped and congested look/feel, and don't like knee-jerk rushes into building and development just to appease the desires of generally newer residents. No fancy economic theories needed...

[Mike from back east]

I suspect that all of us are committed capitalists, the benefits are just too good to give up.

But with the bright shiny coin of capitalism comes the obverse darker side, the laws of supply and demand, the laws of the jungle where the fittest survive all of which means that higher-quality places extract higher prices to acquire. Thus Fort Collins, Boulder, Aspen, Telluride, Jackson Hole, Manhattan, Holmby Hills, etc are all demanding mistresses when it comes to affording their charms.