Introduction

Housing is one of the basic needs that every person strives to get and comes second after food.  It is prudent to note that a robust and diverse community with healthy economy must be able to provide safe and accessible housing for the residents despite the different income levels. It is for this reason that the concept of affordable housing becomes an important aspect in the modern hard economic times. It is the responsibility of an active community to ensure that they have policies that preserve and expand the amount of affordable housing in their regions. Nevertheless, this is not the case as most low income and middle-income earners are finding it rough getting affordable housing (Ascentia.us). Most of these people are forced to travel for long distances in search of shelter or spend a substantial amount of their earnings to cater for the ever escalating housing prices. This report will have an in-depth analysis of the housing problem in Denver and why it is essential to offer a solution to this crisis.

Discussion

As mentioned earlier, the problem of affordable housing is real and needs to be addressed immediately. It is worth to note that lack of affordable housing will consequently lead to a stagnant economy since people will not be able to meet their economic productivity threshold. The problem has been very persistent in Denver and several other major cities. For instance, the average house price in Denver has risen to $265,000. In fact, more than 37% of the city’s population is overburdened by the housing costs as they spend over 30% of their income to cater for the housing costs. With such high-level spending, then it becomes difficult to support the state’s economy or make savings for future use (Fresc.org). This implies that wealth creation becomes a major problem where housing problem is evident. Also, it is worth noting that a family that has access to affordable housing will also be able to afford proper diet, medical care as well as safe and reliable childcare. It will also lead to low mortality and overall improved economy.

It is also prudent to note that most of the low income and middle-income earners also lack affordable housing near transit. This makes it difficult for them to travel to and from their workstations. Most of these households spend most of their income on transport costs as well as the hyped housing costs.  In fact, it is argued that this population spends over 45% of their net income on housing and transport cost thus reducing the amount of money left for saving and other expenditures. It is also worth noting that lack of affordable housing near transit makes it hard for individuals to get good jobs, childcare, healthcare, and schools. Affordable housing will be instrumental to transit-oriented development and hence assist middle-income earners in accessing god jobs, schools, and medical care and also lead to reduced transportation costs.  However, this is not the case in most cities such as Denver and it is a problem that needs real time solution (Northdenvertribune.com).

It is prudent noting that if the housing problem is not addressed with immediate effect, most low-income earners and middle-income earners may not be able to contribute to economic development. From the previous studies, for a person to afford a median priced house in Denver, his earnings per hour should be an average of $35. This is far much higher than the average earnings of $8.23 per hour minimum wage stipulated by the state (Colorado Public Radio). From this point of view, it is evident that the houses crisis is a major one and as a community, it is paramount that we look for a permanent solution to this problem. The acceptable global standards require that one should not spend over 30% of their earnings on rent.  Anything above this will ultimately require one to sacrifice other important aspects of life. The statistics indicate that for one to afford a house in Denver, one has to have earnings of over $70,000 annually which most people cannot afford. In fact, the median household income in Denver is around $45,438 which is far much below the housing prices in the region (Fresc.org). It is worth to note that the per capita income is $24,101 and over 19% of the population in the region is below the poverty line (Ascentia.us). This implies that most of these people cannot afford proper housing and hence may end up living in smaller and smaller houses or live in shanties. Additionally, these poor households may end up living in less desirable households or make sacrifices spending on other things essential for economic development if the current market prices persist.

The housing problem is not only in Denver but most major cities in America. According to past studies, in almost fifteen thousand cities, most of the low and middle-income earners had to spend over 30% of their net income on rents. Besides, only where there is a minimum of two earners in a household can afford a typical home in 135 cities out of the fifteen thousand used in the study. This is a clear indication that most people cannot afford proper housing and as a result, most people may end up looking for alternatives. One of these alternatives would be a smart switch to manufactured housing which is much more accessible and affordable (Front Porch Stapleton). They are averaged at $0.66 per square foot and translate to less than 26% of an income of a federal worker working for $7.25/hour for 40 hours a week (Colorado Public Radio). This is much more affordable as compared to other housing opportunities in these major cities. Although these manufactured homes are beautifully built nowadays, it is imperative noting that they do not offer the best housing for the community.

The housing crisis is also eminent even in the best-performing economies such as the northern Front Range. It is considered among the best-performing economies in the country.  Nevertheless, the housing problem is also eminent in this region as the supply of homes and apartments affordable to low-income earners continue to shrink. The current market rates are squeezing the low-income earners out of the city and are tempted to work in other cities where there is cheap and affordable housing that will use less than the 30% of their income (Denverpost.com). Though the majority of people may view the housing problem as a personal struggle for low-income earners, the problem has further adverse consequences to the economy.

For instance, if the problem fails to be addressed immediately there are high chances that the country’s economy may not fulfill its potential.  It is also possible that persistence of the housing crisis could slow future job gains and erode the tax revenues that are paramount to the local as well as state government. It, therefore, becomes a collective responsibility for all the stakeholders to find a solution to the affordability problem. Cities with hiked rents and housing prices may fail to attract the right pool of employees (Ascentia.us). For instance, the city of Colorado is ranked among the top five states when it comes to job creation and attracting of new residents. Nevertheless, the construction of affordable housing does not match the increasing demand.  The increasing house rents over the last few years do not match the income of these employees which have stagnated over the same period. In fact, it is worth noting that the house rents are increasing at an average rate of 9.2 percent annually while the wages have remained constant thus making the affordability problem a thorny issue.

The escalating housing prices have consequently led to many people venturing in real estate and house construction business. The super normal profits in this sector have attracted many investors who want to take advantage of the ever increasing housing demand. Nevertheless, these developers and real estate companies have only deteriorated the housing problem (Colorado Public Radio).  This is because most of the apartments built by these developers are targeting the higher end markets. The high-income earners are scrambling for these apartments leaving the lower market with no housing.  To make the matter worse, these developers also buy the older complexes and rehabilitate them to fetch higher rents. In the long run, the low-income earners are left with no option but to shift to other localities with cheaper and affordable housing such as Brighton (London.ca).  There are cases whereby the employees are spending 70% of their income on housing, and this could adversely affect the economy and in the case of an intended expense, then the family can be rendered homeless.

The rents and home prices are on an upward trend which has consequently squeezed middle and low-income earners. It is prudent to note that this increase in housing costs would not have such adverse effects if the rise had been accompanied by a similar increase in income. However, this is not the case as many new jobs are created in this recovery pay on the lower end of the wage scale. As a result, the affordability problem has become a major problem especially for single mothers who are sole income earners in their households (Front Porch Stapleton).  Previous studies indicate that more than 50% of the country’s employees have minimal wage growth if any while others are in a flat wage structure.  This has consequently led to most of these households being unable to cater for other needs such as basic health care and having a diet on the table (Colorado Public Radio).  With the households stretched to that extent, the federal and local governments are increasingly finding themselves called into action to provide assistance to food and utilities that these families find it difficult to sustain.

The affordability problem can be attributed to the government’s failure to put in place measures to deal with this problem. It is prudent noting that the parties fail to grasp the connection between housing availability and affordability and economic development. The government is striving to create new jobs with little or no concern on where these workers will be living. It lacks logic when the federal and local governments create jobs earning $8 per hour without providing affordable housing for these workers. It is prudent that the government gets involved in the building of subsidized housing in major cities to ensure that low-income earners have an affordable and safe place to live. It is, however, worrying to note that the rate at which the government is building these houses is very slow, and it may take centuries to deal fully with the affordability problem (Denverpost.com).  For instance, only 823 subsidize units that were built last year, and this is a very small number compared to the ever increasing demand for good and affordable housing.

Denver city has one of the best-performing economies in the world. However, the economic performance is likely to be adversely affected y the housing problem that has been persistent in the last few years. This is because the city may fail to accommodate new residents who are essential for economic development. Most of the employers are finding it difficult to get the desired employees since such recruits could not afford suitable housing from this region. It is, therefore, prudent for all the cities to realize that affordable housing is critical to economic prosperity and be proactive in ensuring that citizens have access to affordable housing. Although we appreciate the efforts by Denver mayor to provide more subsidized houses, the $15 million a year budget set aside may not fully address this problem (Denver.cbslocal.com). It is also prudent to seek help from other sources to ensure that this issue is solved immediately and lead to economic prosperity.  Good collaboration amongst different stakeholders will speed up the housing process which has been a significant issue for years. It is prudent to have a good strategy that will promote affordable housing in the main cities and other metro suburbs.

Conclusion

As aforementioned, Denver is blessed with one of the strongest economies in the nation and quality of life in the city is second to none. Nevertheless, the skyrocketing rental and home prices are a nuisance to the economy of the city. This increasing prices and rents are squeezing low and middle-income earners out of the city, and this will consequently lead to slow economic growth and development (Front Porch Stapleton).  It is prudent for all the stakeholders to be proactive in ensuring that the problem of homelessness and affordability becomes a thing of the past.  It is prudent to note that affordable housing is key to economic stability and mobility out of poverty. It is also worth to note that affordability plays a significant role in maintaining a strong workforce and recruiting of new businesses that ultimately lead to economic development (Denver.cbslocal.com). Also investing in affordable housing will also be a good source of revenue for developers and investors since it will have a ready market. It is on this premise that I find it essential for donors and other financiers to consider offering grants to reduce the housing crisis that is rampant in the modern economy.

Works cited

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Colorado Public Radio,. “Denver Budget Would Bump Up Spending For Transit, Sheriff’s Department”. N.p., 2016. Web. 23 Feb. 2016.

Colorado Public Radio,. “Denver Mayor: Affordable Housing Shortage Threatens City’s Identity”. N.p., 2016. Web. 23 Feb. 2016.

Denver.cbslocal.com,. “Things Get Heated After Potential Low-Income Renters Line Up Overnight, Turned Away”. N.p., 2016. Web. 23 Feb. 2016.

Denverpost.com,. “Housing Costs Outstrip Incomes, Putting Colorado Economy At Risk”. N.p., 2016. Web. 23 Feb. 2016.

Fresc.org,. “Affordable Housing | FRESC”. N.p., 2016. Web. 23 Feb. 2016.

Front Porch Stapleton,. “Affordable Housing: A Hot Topic In Stapleton, In Denver And In The Nation – Front Porch Stapleton”. N.p., 2015. Web. 23 Feb. 2016.

London.ca,. “Developing New Affordable Housing”. N.p., 2016. Web. 23 Feb. 2016.

Northdenvertribune.com,. “Exploding Rents Hit NW Denver Workers : North Denver Tribune”. N.p., 2016. Web. 23 Feb. 2016.

Staff, Web. “Big Crowd To Get Apartments Emphasizes Denver’s Affordable Housing Crisis”. FOX31 Denver. N.p., 2016. Web. 23 Feb. 2016.

 
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