How will Colorado handle growth?
Are the resources and infrastructure available?
One of my friends just forwarded to me an article by Alan Gionet of CBS-4 that indicated our state population is now approximately 5,000,000 (That was a surprise!) and expected to grow to 7,700,000 over the next 25 years. (An even bigger surprise!) The “rate” of growth is projected to be slower than in the 1990’s. That slower rate notwithstanding, 2,700,000 people is a huge addition. Also in the last few days I have read that the number of building permits for residential construction is down by at least 50% from 2008 to 2009 and down by 80% from 2007 to 2009. We regularly read that water supply in the state is limited. So, the population is growing both from births and from relocations and at the same time we are not creating new housing units and do not appear to be making progress regarding sources of water. Colorado clearly has some major planning to do and must do that planning sooner, not later.
Why more growth here?
Quality of life is one of the attractions to Colorado. The recent “Gallup-Healtways Well Being Index” shows Boulder as the number 1 city nationally in their well-being survey and Colorado a the number 7 state (down from #4 in 2008). People will continue to come here and those already here are not leaving. This post will not be lengthy enough, nor is my knowledge broad enough, to answer the question of how to reconcile the projected growth with the available resources. I will hopefully bring some clarity to the questions.
Enough housing?
On the housing side, the system will eventually meet the demand. It will probably be behind for awhile, at least until the banks are comfortable with speculative lending, and that will cause upward pressure on home prices and rents. The system is not particularly efficient so during this next twenty-five years there will also be a time or two of oversupply. The growth will also cause homes that are currently closer to places of employment to go up in value at a higher rate than the new and more outlying homes. (This phenomenon is nothing new, but will become even more pronounced.)
What about water?
Water availability is altogether another situation. Many areas are using deep wells as a source and these levels are dropping. The only disagreement seems to be how fast the aquifers are being depleted. Water law in Colorado is complex and the state has agreements that require a certain amount of the runoff water to move downstream. To make things even more “interesting”, most the moisture falls in the form of snow on the western slope and most of the people live on the eastern slope. I did some research in preparation of writing this post and actually came away feeling better as it relates to water. My conclusion will not make everyone happy.
From the most recent figures that I could find, Colorado agriculture represents about 90% of the water used in the state. Yes, 90%. At the same time, agriculture employs 2% of the work force and provides just $2 billion of Colorado’s $236 billion Gross Domestic Product. Developers and municipalities are already purchasing agricultural water rights. That is likely to continue and suggests that there will be water to sustain significant population growth without a major effect on the GDP. Right now, many farmers are finding that the economics of selling their water rights are better than those from farming.
We’re “good”!
S0, I think Colorado has and will have the resouces for growth. Water may get a little more expensive and the price of housing will continue to increase.
And if you are moving here or already here and thinking of purchasing a home, you should have the most experienced and energetic Exclusive Buyer’s Agent on your side. That be me!
Russ Murray 303-721-1100, ext. 1 russ@buyerbroker-denver.com