Zoe Clemmons is turning 30 soon.
The Denverite graduated and landed a solid job at a public relations firm, but the idea her generation was sold about working hard to one day earn the white picket fence doesn’t seem to be unfolding as promised.
For the five years Clemmons has lived in Colorado, she’s relied on roommates to help pay the rent. Clemmons is grateful for her time sharing a 123-year-old house in Capitol Hill with two flatmates even if she has the memories of a mice infestation, no air conditioning and cracks in the ceiling to remind her of humble beginnings.
“It’s been wonderful living there but I’m at the point where I’ll be 30 this year and want my own place to live,” Clemmons said. “I don’t think I could ever afford a house in Denver. That’s a dream of mine. I would like to pursue that at some point but it doesn’t seem realistic. There is this subconscious pressure to have to move up in the world, though, and have your own spot.”
Clemmons took the leap, stepping out to find a Denver rental unit of her own. In doing so, she discovered she’d accepted what felt like a part-time job of competitive house-hunting alongside a horde of others desperate for a roof over their heads.
At a time when more and more people are living unpartnered — a 2019 Pew Research analysis found roughly four in 10 (38%) of adults between 25 and 54 were neither married or living with a partner, up sharply from 29% in 1990 — finding and affording a Denver apartment on one income is becoming “a harrowing journey,” Clemmons said.
With homes and condos at a median sales price of $580,000 in April, purchasing a place remains largely out of reach for many in Clemmon’s situation. And even renting an apartment solo has become more difficult to pull off.
“It does dramatically change the picture when you have another earner in the household,” said Jennifer Newcomer, research director with the Colorado Futures Center, which has studied housing affordability and economic well-being.
The Center estimates that housing costs statewide would need to drop 32% to get affordability back to where it was in 2015, which wasn’t a particularly affordable year, but more manageable than today. That kind of correction is highly unlikely, and if it did happen, it would devastate the real estate market.
A core problem is that incomes, while they have risen, have failed to keep pace with housing costs. The median income in metro Denver for a two-person household in 2021 was $103,507, according to the American Community Survey, which is conducted by the U.S. Census Bureau. For a one-person household, it was less than half that — $48,172.
In Boulder County, which is a separate metro area, the gap is even wider. A one-person household made a median income of $47,136, less than Denver, while a two-person household made more, $110,983.
The U.S. Department of Housing and Urban Development defines a household that spends more than 30% of its income on rent as cost “burdened” and above 50% as “severely burdened.” A single person earning a median income of $47,136 should try to find a rent of under $1,205 a month or less to avoid being cost-burdened.
How likely is that? Not very.
Based on the listings on its website, Zillow puts the median rent in metro Denver at $2,200 a month, but that includes single-family homes. Looking at just studios and one-bedroom units, the median rents were $1,561 a month and $1,769 a month.
The most comprehensive rental survey available, put out by the Apartment Association of Metro Denver, had metro Denver with an average apartment rent of $1,846 in the first quarter, with rents ranging from $1,973 a month in Douglas County and $1,940 in Boulder/Broomfield counties to $1,686 in Adams County. Denver’s average apartment rent was $1,903 a month.
But median rent, which represents the midpoint, with half of the rents above and half below, offers a better comparison when looking at median income. The median apartment rent for metro Denver was $1,763, a substantial increase from $1,448 in the first quarter of 2021, according to the AAMD.
That’s $560 higher than what a single person earning the median income should be paying to avoid being cost-burdened, although the premium will shrink for those choosing a studio or older property.
Newcomer said the state added 82,000 households consisting of a single person between 2010 and 2021, and nearly half of those, about 40,000, met the definition of being rent burdened. But rents have spiked since 2021 and the problem is national. For the first time in two decades of tracking the ratio of rents to income, the national rent burden reached 30%, according to Moody Analytics.
“Rising mortgage rates caused many households to be priced out from home buying and would-be buyers to remain renters. Apartment demand surged as a result and drove rates sky-high. As the disparity between rent growth and income growth widens, American’s wallets feel financial distress as wage growth trails rent growth,” Moody’s said in a report.
A difficult search
Clemmons started the apartment hunt mid-April.
The 29-year-old was constantly checking apartment listings online throughout the day and realized if she didn’t pounce on ones of interest immediately by setting up a tour, they were snatched up immediately. She started stacking up apartment tours, all the while anxious about the prices she was seeing.
Bringing in between $50,000 to $60,000 annually, Clemmons was looking to stay below a $1,300 budget range, but she wasn’t finding much for that price.
When touring, Clemmons’ anxiety over the search was heightened when multiple people — her competition — would show to tour the place, too. The visual reminder that she was vying for a spot made her feel desperate along with property management’s reminders that if she wanted something, she’d need to decide right away as there were folks in line behind her.
About a week into the hunt, Clemmons found a studio apartment near City Park she liked online. The building boasted a small gym and the unit had a balcony on which Clemmons envisioned herself growing vegetables. The rent was more than Clemmons wanted to pay at $1,395 a month, but she felt pressure to apply for the unit when others showed up for her tour.
Clemmons secured the unit and moves in this month.
“I’m very nervous about paying that amount of money but I’m just doing it because I don’t know what else to do,” Clemmons said. “It’s like you’re in a state of fight or flight and you have to go out there and compete against people just for a place to live.”
One reason both home prices and apartment rents have risen so much in the past decade is that the market has been undersupplied.
After the housing market crashed in the late ’00s, there was a glut of single-family homes and apartments on the market, but that surplus quickly evaporated after more people moved to the state than expected. A majority settled along the northern Front Range, although newcomers spread out more widely during the pandemic.
The state’s home construction industry, from lot developers to real estate lenders to general contractors, was so damaged by the downturn that it couldn’t keep up, creating upward pressure on prices as demand outstripped supply. And while developers are adding apartments at a record clip this decade, it still isn’t enough.
Steven Byers, a senior economist with the Common Sense Institute, estimates that metro Denver is short somewhere between 66,000 to 136,000 housing units given recent growth. To close that gap and meet future population gains, builders need to pull from 26,000 to 37,600 permits a year through 2028. They are on track to pull 21,120 permits this year.
And if that weren’t daunting enough, homeowners face an increase of between $2.8 billion to $4.4 billion in property taxes due in 2024, Byers said in his report. Four metro counties can expect to see taxes for the median-priced home rise by more than $1,000 a year, with Douglas County looking at a $1,759 gain.
“This means Coloradans on average, will need to work 26 more hours a year to cover the cost of these skyrocketing property taxes,” he said. And renters won’t be immune, as landlords pass higher costs on via higher rents.
One income with children is even harder
Danny Seery, 47, is a paraprofessional who works with special needs students in Adams County School District 12.
On the weekends, Seery cares for his 15-year-old son who has severe special needs, Seery said.
Between working as a paraprofessional and his second job working events at Ball Arena, Seery said he brings in about $2,500 a month.
As their current housing situation comes to an end, Seery’s anxiety is high as he searches for something he can afford that could accommodate him and his son. Renting out two bedrooms of a house would be ideal, Seery said, so the two could enjoy some space to themselves but a basement rental might be the only affordable option, he said. Seery is having a hard time finding anything in his price range of $1,000 per month.
“I’m trying to remain positive, but I have no idea where we’re going to be come June 1,” Seery said. “I’m looking at changing my career because I’m just sick of this. I can’t keep living like this.”
Seery struggles to make it in Adams County, among the most affordable county in the metro area when it comes to housing. It is becoming nearly impossible for service and other lower-wage workers to stay in more expensive places like Boulder County.
“It has always been a challenge to afford stable housing in Boulder County and in the city of Boulder in particular. What we are seeing is a level of need we have not seen before,” said Julie Van Domelen, executive director of the Emergency Family Assistance Association or EFAA, a nonprofit founded in 1918 to help struggling Boulder households with food and shelter.
She said many of those who turn to EFAA have yet to see their earnings recover from the hit taken during the pandemic. But even before the pandemic, the situation was difficult, with those seeking help from EFAA typically spending about 70% of their income on housing to stay in Boulder County.
“A job is no longer a protection against homelessness. For families with children, it is doubly hard,” she said.
One way she measures the stress on households is how many people show up for food assistance. EFAA saw about 350 households seeking help before the pandemic, and 400 during it. It is now helping closer to 600 families a week. When people are diverting 50% to 70% of their pay to meet the rent, trying to keep food on the table becomes difficult.
“We can’t substitute for the economic disequilibrium that is out there in the world. With inflation, we have 20,000 people that might need assistance. The solution has to lie outside the safety net, it has to be more structural,” she said.
Rents keep going up
When Chad Crow first moved to Westminster in 2019, he found a 580-square-foot apartment for $1,050. The same unit now is going for $1,500, Crow said.
“It’s just mind-boggling,” Crow said.
Now, the 27-year-old lives in a Littleton apartment. When he first moved in a few years ago, he was paying $1,330. At the last lease renewal, Crow said his landlord wanted to increase rent to $1,810. Crow talked them down to $1,550, which he said has been untenable.
“That’s too much for me as a single person,” Crow said.
Crow is moving in with roommates in August.
“It’s getting too expensive to look on my own, and we’re still looking at $1,200 to $1,300 per person to find a place,” Crow said.
Crow works 50 hours a week as a manager, barista and bean roaster at a local coffee shop.
Sometimes he worries about working so much to afford a place that he hardly has time to enjoy.
“You have to constantly be working to afford anything out here,” Crow said. “Even the older units seem to be charging as much as the newer ones now. Everyone is saying they’re renovating units to charge more, but the renovations aren’t even nice. I feel like I’m getting ripped off.”
Going into an older apartment is definitely one way to save money. Apartments built after 2020 carry an average rent of $2,414, while those built in the ’10s average $2,283 a month, according to the AAMD. Rents slide with each decade until the ’70s, where the average is $1,488 a month.
Go older than that, and apartments start costing more, $1,569 a month on average. Those older units tend to be in more established and walkable neighborhoods.
But going older requires trade-offs, like draftier windows, less soundproofing, and worn-out appliances, not to mention hazards such as lead pipes and asbestos contamination, which recently forced the evacuation of the La Fonda Apartments in Denver. And older buildings are more at risk of being bought out by investors and renovated. When that happens, rents can rise sharply.
Newcomer said there are economic and societal costs when people are constantly feeling stress about meeting the rent, when they have to uproot repeatedly to find something affordable, when they can’t set aside money for retirement or on healthcare or to spend on things that make life enjoyable.
“It trickles down into all aspects of life,” she said.
Is relief on the way?
Developers have 43,700 apartments currently under construction in metro Denver, or about 15,000 a year for the next three years, said Cary Bruteig, founder of Apartment Appraisers & Consultants, which puts together the quarterly AAMD report.
To put that in perspective, the metro Denver market just crossed 400,000 apartments, so the total inventory could grow by a tenth in just three years, which is unprecedented. Looking further out, another 76,000 apartments are in the planning stage.
If those come to fruition, the 20s could go down as the most prolific decade in Denver history by a wide margin for new apartment supply, and the current construction wave will happen at the same time that migration to the region is slowing.
“We have never seen anything like that going back to 1993. This is pretty incredible to see this many apartments under construction,” he said.
Developers are now supplying more units than what tenants are filling or “absorbing,” which should create more competition to win tenants. The apartment vacancy rate in the first quarter of 5.6%, close to a balanced market, and rents were rising 5% year-over-year.
If the vacancy rate can get above 6%, which may not be that far off, the balance of power will shift towards tenants, Bruteig said.
But don’t expect that to show up in lower rents right away. Rather, landlords are more likely to offer concessions, like a month or two of free rent, to attract new tenants. Concessions remain minimal in the current market, about $18 a month, which is $1 more than it was in the fourth quarter.
