Business/Technology Reporter
Quick links: Apartment oversupply | What’s behind the $1,758 | If Rockies were #1 | Mile High Asian Food Week | Lots more!
The deals got even better for Denver apartment hunters this year, according to the latest rent and vacancy report from the Apartment Association of Metro Denver.
With multiple apartment complexes still offering one to three months of free rent on new leases, concessions hit a record of $180 in savings per month in the first quarter. That’s equivalent to skipping rent for four to five weeks a year and effectively paying about $1,580 a month. Average rents also dropped 3.4% from a year ago to $1,758, and were barely up $4 since December.
And then there was this:
“Our current average of $1,758, this is the same exact dollar-for-dollar rent that we had in” first quarter 2022, said Scott Rathbun, with Apartment Insights and author of the quarterly report. “So basically, rents today are at the same level they were … four years ago.”
Rents have been falling in the Denver metro for two years. But the four-year low was a highlight at a recent news conference. The plunge is credited to the rental market trying to absorb tens of thousands of new apartments that have been built in the past five years. That’s pushed prices for some studios and one-bedrooms below 60%, 70% and 80% of area median incomes that some affordable-housing ordinances require. The average rent for a one-bedroom was $1,551, before concessions, according to AAMD data.
“I don’t want it to get lost on any of you with the detail of this report that rents today are lower than they were four years ago,” said Drew Hamrick, AAMD’s senior vice president of government affairs. “I think the reason why it’s so important is that it certainly settles the question of how do you bring housing affordability to the market. You do that by bringing more units online.”
But that $1,758 price four years ago was under different economic circumstances. Back then, the nation was still recovering from COVID disruptions. Federal pandemic unemployment benefits had ended a few months earlier and the national eviction moratorium had been lifted.
Many landlords had kept rents flat — hovering around $1,500 in 2019 and 2020. They were eager to catch up. Rents jumped by double-digit rates for a solid year starting in mid 2021. The biggest jump was in the first quarter 2022, up 16.5% in a year. Inflation was also soaring.
That is the quarter Rathbun is talking about.
Too many new apartments? No, says the industry
Today’s $1,758 price comes after more than 70,000 new apartments were built in five years, flooding the rental market with modern amenities and brand new spaces. That increased the number of apartment rentals by 18% to 452,591 apartments today.
Normally, the Denver market absorbs 10,000 new rentals a year. But in 2024, nearly 20,000 new apartments came online. Another 15,330 came online last year. Landlords began offering incentives and discounts to attract new tenants. That pushed Denver’s concessions to be the highest in the nation, according to Zillow.
“The cumulative number of units was too much for the market to absorb in a short amount of time,” Shane Ozment, vice chairman at CBRE’s Colorado office, said in an email.
While Denver isn’t unique, he said, it is among a small group of metro areas that saw rents decline, including Austin, Texas and Phoenix. At the end of last year, Denver ranked third in the nation for the largest decline in effective rents, falling 7.3%. That, however, was outdone by Colorado Springs, which topped the list, posting a 7.8% dip in rents and ahead of second-place Austin. Colorado Springs also added a lot of new apartments in recent years.
And there are another 46,000 apartment units proposed or under construction in metro Denver. But about 20,000 of the proposed units are in limbo because they “just haven’t been economically feasible to move forward and break ground for four years,” Rathbun said.
Having projects in the pipeline is crucial to a region’s growth because without more housing on the way, rents go up. Household costs increase and the region gets a reputation as an expensive place to live, which Denver had suffered from. To encourage future projects, AAMD advocates for fewer government regulations to attract investors who fund more housing and keep the supply going.
“A lot of folks start to think the government ought to be involved with micromanaging what product comes to market because you only get decreases in affordable housing prices if you build more of what they call affordable housing,” Hamrick said. “That’s just not the case.”
Rathbun said the city of Denver wants those apartments and has begun to see the light. Next month, Denver City Council is expected to vote to allow developers another three years to get started on their multifamily housing projects.
“The city is trying to move the needle on this,” Rathbun said. “And they understand that it’s important that we deliver housing and continue to deliver housing, especially in the city of Denver where we have downtown and the tech center and a lot more dense locations where we can deliver dense housing and a larger number of units.”
What’s behind the $1,758 rent number?
AAMD data uses the “asking rents,” or the advertised price, which could be different from what the renter ends up paying. It also doesn’t consider the cost to renew after the initial term ends.
What renters actually pay is a tricky figure to track down, and AAMD says they don’t have access to that proprietary information.
At CBRE, they combine asking rents and renewals to get what they call a blended rent. And that, according to CBRE, is expected to turn positive in Denver this year because “asking rent is dramatically lower than leased rents from 2025,” Ozment said.
That said, CBRE’s tracking of first-quarter rents in Denver saw a continued decline to $1,729, which was down 0.6% from the fourth quarter and down 6.4% from a year ago.
Cornerstone Apartment Services, which manages about 8,000 units mostly in downtown Denver, also shared its figures. Average rents are down 4.2% from a year ago to $1,384, said Jim Lorenzen, the company’s president.
What’s more telling though, he said, is how much a new tenant is paying compared with the person who just moved out. That’s down 6.6% to $1,268. Comparably, AAMD’s average asking rent for Denver County was down 2.9% in the past year.
“The average rent dropped $195 in January from what the prior renter was renting. Now it’s down $140,” Lorenzen said. “It’s continuing to fall, but the amount of the decline is getting less.”
That could be an indicator of stability to come in the market, at least for property owners and managers. Last year, on every available unit, Cornerstone offered a free month plus another $500 if prospective tenants toured a space and signed a lease within 48 hours. Now, that $500 bonus is only for select units while the free month requires a signed lease within 48 hours of touring a unit.
“It’s a small pullback but it’s a pullback,” he said. “We’re selectively applying that concession to buildings that have vacancy issues. It’s not being done across the board anymore. We’re not raising rents but we’re pulling back on concessions.”
Cornerstone also makes an effort to retain existing tenants and has offered concessions for continued lease terms. Renters can always ask about discounts because it costs money to turnover an apartment or sit on a vacancy for weeks or months.
While today’s lower rents and concessions have helped, affordable housing advocates say prices are still higher than a few years ago. And it’s still a struggle for low-income households. According to AAMD data, asking rents are up 18% from the end of 2020, when they hovered around $1,500 a month.
“Any decrease suggested by private data sources is still not enough to offset the speed at which rents have climbed in the last five years,” said Carmen Medrano, executive director of United For A New Economy and co-chair of Colorado Homes for All, which advocates for all people to be able to afford a home.
She said those on fixed incomes or earning minimum wage also have other expenses so making a $1,758 rent payment each month is a challenge. And concessions don’t typically last beyond the first year.
“For many of the renters we talk to, the rent hike at the end of a lease is the most stressful part of renting. Many have been forced to move year after year to avoid huge rent hikes, leaving them unable to build stability and community in their neighborhoods,” Medrano said in an email. “Stability is one of the most important issues that we hear about from renters in Colorado. While one month off of rent might be great, having to move every year isn’t.”
➔ ICYMI: In Telluride, new regulations designed to help renters are instead driving many out of town >> Read story
Sun economy stories you may have missed
➔ Sheridan School District, teachers union reach tentative agreement as Gov. Jared Polis intervenes. Teachers, who have been on strike for three weeks, could return to the classroom as soon as Monday. They will continue picketing until a final deal is inked. >> Read story
➔ More than 1,900 ski instructors join wages lawsuit against Vail Resorts. The lawsuit filed by three Beaver Creek employees in 2020 argues Vail Resorts failed to follow federal labor laws and the trio is seeking more time to enlist nearly 25,000 eligible workers in their claim. >> Read story
➔ Company tied to Buc-ee’s buys land along Interstate 25, raising questions about next steps. The sale comes shortly after developers withdrew their application to build a Buc-ee’s travel center in Palmer Lake amid public opposition >> Read story
➔ PNC to cut up to 777 FirstBank employees post-merger. Some have already been offered new jobs. Those who aren’t hired by PNC are expected to leave starting June 30. Customer-facing staff are being retained. >> Read story
➔ Colorado nonprofit director schemed to skim $99K from a top donor by falsifying DU tuition invoices, records show. The former regional executive director of a nonprofit that sticks up for foster children in court falsified tuition invoices and pocketed the money, AG’s office says >> Read story
➔ Loss of electric vehicle subsidies sends Colorado car sales off a cliff. New EV sales are down 64% and plug-in hybrid sales are down 73% from last year, dragging down overall vehicle sales in Colorado by nearly 20% >> Read story
➔ More people started a business in Colorado last quarter than usual. They’re not all from here. The 12.3% increase in new business filings is near an all-time record. The only time it was higher was when filing fees dropped to $1. >> Read story
Were you forwarded this newsletter? Get your own right here !
Other working bits
➔ If the Rockies were good, what would Colorado’s economy be like? That’s the premise for a new report from Common Sense Institute, a fiscally conservative think tank in Greenwood Village. While CSI economists tend to weigh in on job numbers, inflation and fiscal policies, they’ve also had fun analyzing entertainment heavyweights like Taylor Swift when the singer was in town for a few concerts.
CSI imagines last year’s last-place team as this year’s top performer. If the Rockies managed a first-place finish, that would attract up to 1.1 million more ticket-paying fans, including out-of-staters who’d spend loads of money on food, merch and hotels. Plus, the playoffs! CSI said direct spending could swell to $480 million. And if you include the companies and employees that support ancillary activities for those in-town guests, the increase in economic activity could be up to $1.3 billion. Play ball! >> Read report
➔ Mile High Asian Food Week starts Sunday. The grassroots effort to highlight Asian food and the AANHPI chefs and owners behind the region’s culinary scene starts Year Four on Sunday. The weeklong event is similar to any city’s restaurant week, with special dishes or discounts available. This year, there are more than 70 food and beverage companies participating, a nearly 50% increase from Year One.
That’s slightly down from last year’s count of 80 vendors because some have closed while others did not sign up. But several newcomers have joined in. “That number reflects exactly the kind of growth we want, which is intentional and meaningful,” spokesperson Chea Franz said in an email. “Mile High Asian Food Week has expanded significantly over the years, and throughout that journey we’ve regularly asked ourselves why we host this food week. The answer always comes back to the same thing: using this platform to elevate AANHPI chefs and their communities.” >> Menus and details
➔ Should the city of Boulder adjust its tip credit? Minimum wage in Boulder increased to $16.82 on Jan. 1, to elevate the lowest paid workers in the community. But the city’s second minimum wage for food and beverage workers who earn tips comes in at $13.80, or $3.02 less per hour. That’s the same tip offset found nearly everywhere else in Colorado. But should the city increase the tipped credit, which would alleviate some of the labor expenses of restaurant owners? The city is asking locals. >> Fill out the questionnaire
➔ SBA Colorado picks Centennial business owner as Person of the Year. Martin Faith, owner of Scottish Stained Glass in Centennial, was named SBA’s Small Business Person of the Year and will be featured during the agency’s National Small Business Week starting May 3. Faith started his business in 1995 and is known for stained glass restoration and design.
Several other local companies will also be recognized at the SBA event, including Desert Sun Coffee Roasters in Durango, Chris’ Garage Doors in Aurora, Mi Casa Resource Center in Denver and Manufacturer’s Edge in Lakewood. >> Details
➔ FCC seeks comments on the Lifeline program. Discounted phone service to ensure that low-income Americans will stay connected to loved ones was the prime reason why the Lifeline program started in 1984. That has since expanded to cover broadband service. But is the billion-dollar program helping the folks it’s intended for? Or is it being abused? The Federal Communications Commission is looking for comments and feedback by May 4 on proposed changes to on who is eligible (ie: U.S. citizens with a qualified status). >> Send a comment
Got some economic news or business bits Coloradans should know? Share it: cosun.co/heyww
Thanks for sticking with me for this week’s report. Next week is SunFest, our in-person event where Sun readers can meet experts, local lawmakers, one another and … me! Tickets will be available at the door if you missed the online sale.
Stop by my session on AI in our lives will feature two Colorado tech developers and Ryan, the AI wellness robot. If you show up, please find me and say hello!
As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
Miss a column? Catch up:
What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.
Support this free newsletter and become a Colorado Sun member: coloradosun.com/join
The Colorado Sun is part of The Trust Project. Read our policies.
Corrections & Clarifications
Notice something wrong? The Colorado Sun has an ethical responsibility to fix all factual errors. Request a correction by emailing corrections@coloradosun.com.