It is a fallacy to believe that just because something did or did not happen in the past, that means the same can be said for the future. Just because you have never spilled coffee on yourself while driving in the past does not provide a viable argument that it will not happen in the future. Take Denver. for example. Just because the city managed to keep its housing numbers on pace with its population growth over the last decade, there is no guarantee that in the coming decade it will manage to do the same thing.
Denver’s past performance has been pretty impressive: Between 2000 and 2010 the housing stock of the city and its adult population grew nearly equally, according to Zillow. In the first decade of the new millennium, Denver added 38,522 adults to the city while also building 34,362 housing units. In 2000, Denver had an average of 1.72 adults for every housing unit in the city. In 2010, after the city experienced significant population growth, the number of adults per unit actually managed to fall to 1.65.
But as Denver continues to be one of the fastest growing cities in the nation, will it manage to keep up? The answer to that question is a little more complicated than a simple yes or no. Over the next 10 years, there are plans to build 6,000 new units, which doesn’t seem like it will be nearly enough, as the adults per housing unit would grow to about 2.18. While it is a steep increase, it is still on pace with the average for America’s largest and fastest-growing cities.
However, because of a severe shortage in supply, affordability, as is the case in most desirable cities, could become a problem. In 2000, residents living in Denver could expect to pay about 31 percent of their income on rent each month. In 2014, that number grew to 38 percent. However, thanks to slowing growth for home values and rents and a very strong economy, Denver’s housing market seems to be on a path of self-correction.