Governor Polis and Colorado State Demography Office Release Analysis on the Current State of Colorado’s Housing Shortfall

DENVER - Governor Polis, along with the State Demography Office (SDO), housed within the Colorado Department of Local Affairs (DOLA), have released a comprehensive analysis of the current state of Colorado's housing shortfall. In partnership with the legislature, Governor Polis has signed landmark laws to increase supply and make housing more affordable. Findings show that while Colorado has made gains to narrow the housing gap since its peak in 2019, SDO acknowledges the need for additional housing steps to address housing challenges that remain for communities across the state.

"We are fighting to lower housing costs and ensure that every Coloradan can realize the dream of becoming a homeowner but more work needs to be done. By expanding housing options, we can lower costs and provide more options for Coloradans to live where we want to live," said Governor Polis.

"Every Coloradan deserves a place to call home," said Maria De Cambra, DOLA's Executive Director. "While we've made progress since 2019, this report shows that we still have much work to do. At DOLA, we are committed to continue to work with our partners to provide a home for every Colorado budget."

"The State Demography Office's analysis compares existing housing shortage estimates and offers an estimate with a transparent methodology," said Kate Watkins, Colorado State Demographer. "By providing objective, reliable data, the analysis aims to support state and local governments, housing providers, and community organizations in understanding the evolution of Colorado's housing needs and how to better target resources so that they can be most effective."

Key Takeaways:

• The housing shortfall for 2023, the most recent year for which data are available, is estimated to be 106,000 units.
• The shortage peaked in 2019 at 140,000 units.
• To prevent the shortfall from growing, approximately 34,100 new homes would need to be built each year over the next decade based on the latest population projections.
• These would need to be owner-or renter-occupied homes, not second or vacation homes.

The report notes that while the housing shortfall has lessened, housing affordability issues have grown. The report notes that recent improvements are largely due to slower population growth and increased housing production. Between 2020 and 2023, Colorado built an average of 43,000 housing units each year, significantly higher than the pace of the previous decade. This surge helped reduce the shortfall by nearly 25 percent in just four years.

While the report analyzes data through 2023, since 2023 Colorado's housing market has faced evolving challenges, with elevated interest rates and rising housing construction costs. New construction activity has slowed considerably, and affordability gaps have widened with higher interest rates. Going forward, SDO will update its analysis annually as new data become available to track the evolution of the housing shortfall.

DOLA's Role in Addressing the Shortfall

Housing is essential to the well-being of every Coloradan. A stable home affects nearly every part of life, from health and education to employment and community engagement. When housing is unavailable or unaffordable, it can increase stress on families, limit access to jobs and schools, and reduce overall community vitality.

While SDO provides the research and analysis that guide housing strategies, DOLA's Divisions of Housing (DOH) and Local Government (DLG) actively work to further reduce the gap. Through infrastructure investments, Proposition 123 funding, targeted grant programs, and partnerships with local governments and developers, the Department supports solutions such as:

• Expanding modular and manufactured housing
• Testing AI technology to speed up the building plan review process
• Streamlining contracting processes and permit approval timelines
• Financing affordable housing and middle-income housing
• Expanding the availability of accessory dwelling units (ADUs)
• Administering state and federal housing vouchers and emergency rental assistance
• Funding infrastructure expansion to accommodate higher residential densities, especially around transit hubs
• Helping over 200 communities plan for future housing needs

SDO's latest analysis highlights meaningful progress in reducing Colorado's housing shortfall, but the need for additional homes remains urgent. DOLA's programs and partnerships continue to help communities address this gap while tailoring housing solutions to local needs. Continued collaboration among state and local governments, developers, and community organizations will be essential to ensuring that every Coloradan has access to safe, secure, and stable housing.

The full report is available on the State Demography Office website.

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