Colorado's Housing Paradox: Building New Homes While Losing Affordable Units
Denver, Wednesday, 25 March 2026.
Colorado loses one affordable housing unit for every two built. As officials prioritize new construction, a mere 0.2% of recent state housing funds have supported preserving existing vulnerable properties.
The Preservation Deficit in State Policy
Focusing on the current policy landscape as of March 2026, Colorado is losing one affordable housing unit for every two it constructs [1]. Democratic Governor Jared Polis and state housing officials have made a clear policy choice to prioritize the funding of new construction over the preservation of existing affordable rentals [1][GPT]. Governor Polis has defended this ongoing strategy, stating the administration is “focused on maximizing investments to deliver the most newly constructed homes Coloradans can afford and addressing our housing shortfall by building more homes now” [1]. However, this intent to build out of the crisis masks a looming cliff: Colorado is at risk of losing 24,000 affordable units over the next 15 years [1].
The Human and Economic Cost of Attrition
The real-world impact of this funding disparity is visible in deteriorating properties across the Denver metro area. For example, a 1961-built apartment building at 1371 Xenia Street in Denver went up for sale in 2024 with tenants facing winter months without heat [1]. The East Colfax Community Collective applied for Proposition 123 funding to purchase and repair the 23-unit property, but the state rejected the application [1]. Ultimately, the collective had to secure a $3.85 million, 30-year low-interest loan from Denver’s Department of Housing Stability to buy the property and maintain rents at $995 for a studio and $1,525 for a two-bedroom for tenants earning less than 50% of the area median income [1].
Market Headwinds and Stalled Developments
While the state aggressively pushes for new development, the macroeconomic environment is stalling the actual delivery of these homes. An estimated 22,600 housing units in Denver are currently trapped in the pipeline, possessing approved plans but lacking building permits [2]. Projects that were financially viable during the 2021-2022 boom no longer pencil out due to elevated construction costs and current interest rates [2]. Compounding the issue for developers, Denver rents have fallen 7.2% over the past year, with Class C apartments experiencing an 11.5% drop [2]. This rent compression and tight financing environment reflect a national trend where multifamily completions are down 21% from 2024 [2].
Balancing Production and Protection
Housing advocates argue that the state’s binary approach threatens workforce stability and exacerbates homelessness, which has risen in the Denver metro area for five consecutive years despite falling median rents [1]. Kinsey Hasstedt, director of state and local policy for Enterprise Community Partners, emphasizes that housing supply should not be an “either/or” proposition between production and preservation, warning that the overall effort is undermined without simultaneous investments in preservation [1]. Enterprise estimates that nearly 24,000 Colorado apartments built in the late 1990s and 2000s are on the verge of losing their tenant protections [1].