Smart Housing Policy Is a Climate Strategy for Colorado

How we build our neighborhoods impacts nearly every element of our lives: the length of our commute and how easily we can get to a grocery store; how our kids go to school, and if we feel safe letting them ride a bike with friends; how much we pay for housing and how much energy and water we consume. Housing policy, as it turns out, is inextricably linked to climate, public health, and economic stability outcomes.

By most measures, housing policy for the last half century has perpetuated bad outcomes. By greatly restricting the type and amount of housing that can be developed, as well as prohibiting commercial amenities in residential areas, we’ve ended up with limited housing options that are too expensive and too far away from jobs, stores, and necessities. For instance, in Denver, Colorado’s largest and most dense city, on nearly 80 percent of the land, it is prohibited to build a duplex, open a corner store, or add a studio apartment above your garage.

Limits on housing production have led to skyrocketing costs. According to the Colorado Association of Realtors’ Affordability Index, housing is half as affordable as it was seven years ago. A home worth $300,000 in 2015 is now worth $550,000, and wages haven’t remotely kept up. In fact, Governor Polis has cited that, over the last half century, housing prices have increased at four times the rate of income. Construction and labor costs play a role in this disparity, but it is also critically driven by the fact that there are simply not enough homes. Analysis released in 2022 by the Up for Growth network found that Colorado is currently short 127,000 units of housing.

One result of high prices and limited housing stock is that people are being forced to live farther away from jobs and needs, with a growing portion of workers commuting 90 minutes each way. It's no surprise then that transportation is the largest source of greenhouse gas emissions in the state and a major contributor to dangerous air pollution. 

The environmental impacts don’t stop there. Since there are significant restrictions on creating more units of housing in already developed areas (replacing a large, older single-family home with multiple units, for instance), development has been pushed to open areas. Between 2002 and 2017, the state lost more than 1,200 square miles of open space to sprawl. We aren’t just consuming natural areas for houses, though—most developed land in Denver is paved over for the roads, parking lots, and driveways that are required to support sprawling housing developments.

A more efficient, more equitable way to grow

Analysis has found that to account for decades of building less housing than needed and for projected population growth, Colorado needs to build 54,000 housing units a year by 2026. Given the detrimental environmental impacts of sprawling into our prairies, foothills, and mountains, we cannot meet that demand with single-family homes alone. The homes we build today may be with us for more than 100 years. We need to enable more types of housing to suit more types of people and families, to enable people to walk, bike, or take transit to meet their needs, reduce pressure on open space, and consume less energy and water per person.

Examples of more efficient and cost-effective housing include allowing people to build a second unit in their backyard (an accessory dwelling unit or ADU) that they could rent out or have a family member move into. We can facilitate the development of or conversion to duplexes, triplexes, and other “multiplexes” that fit more homes into the same land area. Density in the form of condos or apartments can be encouraged near transit so more people can easily, and sustainably, get around. Amenities and services can also be allowed in residential areas so people can access a grocery store, convenience store, or restaurant without needing to drive or drive very far. 

These aren’t new concepts; in fact, much of Colorado was built this way until it was outlawed in the middle of the 20th century. If you picture some of the most beloved places in our communities—main streets in mountain towns, corner stores in older neighborhoods, and downtown plazas—that is our history of efficient development. Returning to the fundamentals of what makes a healthy, vibrant community can serve us for the next century. 

New housing policy to act on climate

In an analysis conducted by local, regional, and state governments in Colorado, land use comes out as one of the most influential ways to accommodate growth, reduce congestion, reduce air pollution, and meet climate goals. In the Denver Regional Council of Governments’ updated 2050 Metro Vision Regional Transportation Plan,released in 2022, it states that, even without any other infrastructure development, infill development and growth focused in regional centers is one of the strongest pathways to make progress toward 2050 emissions reduction targets. Similarly, in the Colorado Department of Transportation’s plans to meet required emissions reductions from transportation, some of the biggest reductions come from increasing residential and job density and expanding development near transit. In short, Colorado leaders have indicated that we can’t meet our climate goals without changing how we build our neighborhoods.

Political momentum has never been stronger. Governor Polis dedicated a significant portion of his 2023 State of the State address in January to housing policy reform, linking housing supply to unattainable prices, traffic, air pollution, and sprawl. He stated bluntly, “Housing policy is climate policy. Housing policy is economic policy. Housing policy is transportation policy. Housing Policy is water policy. Housing policy is public health and equity policy.” This legislative session, the governor and legislators are hoping to pass sweeping land use reforms at the state level, ensuring that all communities in Colorado help advance best practices to expand efficient housing options.

In February, Boulder City Council adopted a policy statement in support of state involvement in land use, including the construction of accessory dwelling units and multiplexes, increased development near transit, and reforms to parking. Glenwood Springs is undergoing a planning effort to “expand the toolbox” for housing, including consideration of housing diversity and density bonuses. Fort Collins City Council has approved a new land use code for the first time since 1997, with provisions for increased housing capacity, more affordability, and more diverse housing choices; that code is now going to voters. Local land use issues are also on the ballot in Denver’s municipal election this April, with a ballot measure to decide whether or not a defunct golf course can be redeveloped into a mixed-use neighborhood with affordable housing and a large public park.

NRDC has been part of a broad coalition of advocates, environmental organizations, and affordable housing experts working to advance much-needed land use reform in Colorado. Together, we have developed a set of principles to guide the state’s work. These principles include: 

• Increasing housing choice and affordability
• Preventing gentrification and displacement
• Promoting housing stability and homeownership
• Reducing dependence on cars
• Limiting sprawl and promoting climate-friendly land use

Colorado is facing two crises: housing availability and climate change. Fires and extreme weather are threatening the Colorado way of life while many people struggle to find housing that meets their needs. Thankfully, smart policies can help address both, building a more sustainable future for everyone.