Most Coloradans are aware that we are facing an affordability crisis in numerous sectors of our economy, and one of the most notable and consequential is in the area of housing. There is not one city, town or community in Colorado that is immune to this challenge, and as mayors, we see the impacts firsthand. We are the closest to the issue, as we are neighbors and friends with our residents and constituents, and we share their concerns about housing affordability. As the elected leaders of two local governments in the Denver metro area — Broomfield and Thornton — it is important for us to paint a realistic picture of how our state’s housing crisis negatively affects the people and businesses in our communities.

The ‘missing middle’

Colorado, like many other areas around the United States, is experiencing a phenomenon called “missing middle housing,” which refers to a lack of medium-density housing. “Middle housing” — a range of housing types that are between stand-alone homes and large apartment buildings — is intended to meet the demand for walkable neighborhoods; respond to changing demographics, and provide housing at different price points and adaptability for different household sizes and needs.

Colorado’s case of the “missing middle” didn’t just magically appear. The predicament has been evolving for years, and the deficit in our affordable housing stock is most acute in the availability of condominiums.

The origins of this shortage stem from consequences of the Construction Defect Action Reform Act that the Colorado Legislature adopted in 2001. It was intended, in part, as a buffer against frivolous lawsuits but was later amended to allow litigation over minor defects and code violations instead of actual damages.

What’s now commonly referred to as construction liability or “defects” litigation has resulted in builders’ liability insurance spiking and the development of condos grinding to a near halt in Colorado.

In fact, a recent study by the Common Sense Institute found that Colorado’s condominium development across 11 Front Range counties between 2018 and 2022 was 76% lower than between 2002 and 2008.

The scarcity of “middle housing” development, particularly condos, is blatantly evident in both of our communities. As of December, Broomfield has 1,976 completed condominium units, and there are an additional 108 under construction. But the city has no other potential developments in the queue for the next few years. And based on current zoning

and information provided by developers in the area, Broomfield is forecasting less than 100 units of condominium development in the northern area of the city between 2026 to 2028 and only an additional 200 projected around 2029. Thornton has not seen a request from a developer for condo construction in nearly seven years.

There is no denying that this is a complex issue, and construction liability litigation is a key piece of the affordable housing puzzle. But there are also many other factors contributing to the lack of condo construction — lower “hard costs” for rental apartment construction, permitting issues, affordable housing requirements, and a shortage of land zoned for transit-oriented development, or higher-density housing in and near transit corridors.

Why condos?

Our cities face the same concerns as every community in Colorado — we need more housing and we need it at affordable prices. Our reality is that we have an overall lack of housing in every demographic.

Thornton is the fastest growing city in the fastest growing county in the state, recently topping 150,000 residents and the sixth-largest city in Colorado (expecting to become fifth-largest in the next few years).

It is one of the last affordable locations in the metro area, and the reduced stock of housing has created a gap in affordability. Those who have called Thornton home for decades are losing their ability to maintain their homes, and many new residents are not able to afford to buy a home as easily as they have in the past.

In Broomfield, the income-aligned housing gap is projected to grow by 20%, increasing to approximately 1,700 units, ranging from very low-income households to an 80% Area Median Income (AMI) household. Nearly half of renters in Broomfield are cost burdened with preliminary evidence showing that the rent burden is now shifting to households earning more, particularly those earning $35,000 to $75,000 annually.

Condos are critically important because they help close the affordability gap; add a needed element to the diverse mix of housing options we can offer our residents; are arguably the most affordable owner-occupied housing option, and most importantly, they are a key path to first-time homeownership.

We each have goals and priorities related to housing in our communities, including the allocation of housing, community development investments and land use areas, etc. But increasing the supply, quality, and accessibility of affordable housing units to expand and sustain homeownership is a priority that we share.

Whether they are first-time buyers, single professionals and seniors or retirees looking to downsize, condos offer our residents an affordable housing alternative. They tend to be less expensive, giving first-time homeowners a chance to build equity, and they offer more mature buyers the opportunity to age in place and live near their younger family members without having to maintain a house too large and expensive for their needs.

Real-life examples

As elected leaders, it is critical that we build trust within our communities and address our residents’ concerns in the best way we can. We receive the calls, have discussions at the grocery store, and we are constantly witnessing how Colorado’s overly burdensome construction litigation environment is playing out in real time to negatively impact our housing affordability.

Take Christine Fletcher, for example. Christine is a mortgage banker with BOK Financial and has been affected by construction liability lawsuits in her profession as a lender, but she also experienced firsthand how quickly these situations can get out of control as a previous condominium owner.

Because she was investing a lot of money in the condo she bought and with her knowledge as a lender, Christine chose to get on the homeowner’s association (HOA) board and eventually became the president of the owner-controlled HOA board. Christine and other owners noticed a substantial construction issue: whenever they had heavy rain, the windows and balcony doors leaked. They involved their management company and the manufacturer of the windows and doors, testing was done, and they discovered that the architect’s plans were specific to a certain kind of window that was different from what was installed.

At this same time, a building defect meeting had been arranged by the management company. The homeowners sensed that conversations with attorneys had occurred, and they were pushed to gather an extensive list of repairs — some very insignificant and nonbuilder defect issues — and open a lawsuit against the builder.

Before it came up for a vote by the HOA board, Christine had a frank conversation with the other condo owners about potential repercussions that a lawsuit could present — that it might take years to negotiate through litigation, and it could negatively affect refinancing and marketability of the condos if the owners decided to sell.

Ultimately, Christine and the other owners did not bring forth a lawsuit and all contracting parties involved worked together with the owners to resolve the problem.

Holly Coffee had a different experience, and one that is too common these days. Holly is a longtime resident of Colorado and parent to a teacher. Her daughter is a young professional, teaching the next generation of children, hoping to give back to the community she works in. Unfortunately, due to the high cost of housing and the lack of affordable options, it makes more sense for her to live at home since she can’t afford to buy a place.

A condo is a great housing option for someone like Holly’s daughter because, as an owner, she can build equity as she pays off her mortgage and the value of the property increases. And she’s setting herself up for success to own a single-family home if she so chooses. But that choice is virtually nonexistent for this generation of professionals just beginning their careers. Like Holly’s daughter, many of them are stuck (literally and figuratively) in their parents’ basement, with little hope that their situation will improve.

Kathie Barstnar has a similar story, not involving just one child but two. Like Holly, Kathie’s grown daughter lives with her because she can’t afford to buy a place of her own, despite having a steady job.

And then there’s the story of Kathie’s son and daughterin-law. Her son graduated with a bachelor’s degree from Colorado State University and daughter-in-law with a master’s degree from the University of Denver. Both of these highly educated individuals have high-paying and prominent jobs with prestigious companies in the fields of software programming and insurance, and they do not yet have kids. That sounds pretty good, right? So, what’s the catch? The catch is that although they both work for Colorado companies, they do so remotely from Las Vegas. The couple searched for a condo or townhome in Colorado for years but eventually decided to move to Vegas where it is much more affordable to be a homeowner.

Real-life examples — like those of Christine, Holly and Kathie — abound, and ultimately the residents and of our communities are the victims of an overly litigious culture. First-time homebuyers are priced out of the market, and existing homeowners are inadvertently faced with the negative consequences of costly and time-sensitive construction liability lawsuits.

In the case of Christine Fletcher and her fellow condo owners, they and others like them deserve greater transparency in construction litigation related to their property, and they need more options for defect repairs outside a burdensome and time-consuming litigation environment.

Consider the plight of Holly Coffee’s daughter and those in a similar situation: how are Colorado residents supposed to thrive if we only provide single-family homes? What about the single-income earners? Single parents? Young professionals or first responders? We need to provide options for them to give back to the communities they work and invest in.

And in the case of Kathie Barstnar’s son and daughter-in-law, it’s imperative to health of our state’s economy to attract and keep our highly educated and talented young professionals in Colorado.

Now what?

The bottom line is that Colorado needs new legislation that will protect the rights of homeowners, while also encouraging more condominium construction in Colorado, kick-starting the development of this desperately needed type of middle housing. We need to lessen insurance costs by reducing the magnitude and frequency of claims, provide other means to resolve disputes faster for homeowners, and obligate those whose work is the subject of the claims to be part of the process. Ultimately, this will help bring down the costs and enable builders to build more attainably priced condos and create more opportunities to build wealth for our residents through homeownership.

It is our intention to work with and engage legislators to address construction litigation reform, and we urge our fellow partners and local government leaders to join us in the discussion.

Local governments must have a seat at the table, and it is our job to advocate on behalf of our residents’ concerns and interests. The ball is now in the Legislature’s court — especially as the 2024 legislative session begins — because it is their policy decisions that determine the affordability of one of our most basic needs.