Colorado’s housing market has been under pressure for more than a decade. Even with record building in the late 2010s, the state remains significantly underbuilt. While the peak shortfall has narrowed since 2019, the gap is still material — and for investors, it underscores why targeted development in Build-to-Rent and mixed-use corridors continues to offer strong potential.
The Numbers Behind the Shortage
According to the Colorado State Demography Office, the state faced a housing shortfall of roughly 140,000 homes in 2019. By 2023, that figure had eased to about 106,000 units, but the improvement has not closed the gap. To keep pace with demand, the state estimates Colorado will need to add 34,100 homes annually for the next decade. These requirements are driven not just by population growth, but also by household formation patterns and in-migration into the state’s high-growth areas.
~106,000 Homes
Colorado is short (2023) Source: CO Department of Local Affairs
~140,000 Homes
Peak shortage in 2019. Progress made, but the gap remains significant.
~34,100 HOMES
Needed annually for the next decade to keep up with demand. Source: Colorado Newsline
Why Estimates Vary
Depending on methodology, third-party researchers place the state’s housing gap anywhere from ~105,000 to 180,000 units. Up for Growth, the American Enterprise Institute (AEI), and local agencies each calculate differently, but the consensus is clear: Colorado is materially underbuilt.
When the low-end estimate is six figures, the shortage cannot be dismissed as temporary. For developers and investors, it signals that opportunities will remain durable, even as new supply enters the market.
What This Means for Build-to-Rent and Mixed-Use
The ongoing shortage creates a structural tailwind for rentals. Elevated mortgage rates compared to 2020 lows continue to keep many would-be buyers on the sidelines. Families seeking more space are increasingly drawn to Build-to-Rent (BTR) communities, which offer the benefits of single-family living without the upfront costs of ownership.
Mixed-use projects, meanwhile, play a complementary role. By combining residential with retail and community assets, they anchor growth corridors and provide resilience across cycles. Both formats align directly with where demand is heading in Colorado.
Why This Matters for Investors
For investors, the housing gap translates into opportunity. A persistent supply-demand imbalance supports steady occupancy, rent growth, and long-term appreciation. Developers with deep entitlement expertise and a track record across market cycles are positioned to deliver projects that both meet community needs and generate competitive returns.
Conclusion
Colorado’s housing shortage is not a short-term problem. Even as the peak deficit has eased, the state must deliver well over 30,000 units annually just to hold the line. For investors, this creates a multi-year runway where BTR and mixed-use developments stand out as solutions aligned with demographic and economic trends.
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