Business

Eight Reasons Why Rent Prices in Denver are So High

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REASON #4: OIL AND GAS BOOM HAS CREATED ADDITIONAL JOBS


The local Denver economy has also been strengthened by an oil and gas boom. The production growth, as well as the increase in the prices of these commodities, has created additional jobs in Colorado, leading to more migration into the state and Denver....


REASON #5: SPIKES IN MIGRATION


Due to the robust job creation, Colorado has seen a huge surge in new, younger, residents. This influx of younger professionals is more likely to be renters than homeowners, which further increases demand for apartments....



REASON #6: INCREASING HOME PRICES


Rental prices are not the only thing rising in the Mile-High City. The cost of buying a home is also increasing at a faster clip than the national average. Surging home prices make it even more challenging for Denver locals to buy a home, so they remain renters for longer. This in turn feeds the demand for rental units....


REASON #7: LACK OF HOUSING OPTIONS


Typically, rents increase in environments where vacancy rates are extremely low. In Denver, the vacancy rate is currently 4.8% (as of Q1 2014). Anything under 5% is considered an "extremely low" vacancy rate. Rates this low are typically seen in extremely supply-constrained markets like Manhattan or San Francisco....



REASON #8: THE DOT BONG ERA


No analysis of the economic boom that Denver has witnessed in recent years would be complete without an investigation of the impact of the recent passing of Amendment 64: the legalization of recreational marijuana usage in Colorado. While tourism has experienced a bump due to the new regulations, we have not yet been able to capture the full impact as it relates to rental prices....
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Michael Roberts has written for Westword since October 1990, serving stints as music editor and media columnist. He currently covers everything from breaking news and politics to sports and stories that defy categorization.
Contact: Michael Roberts