Aerial drone view of Construction cranes in Denver Downtown rising up and building the new modern Denver Colorado skyscrapers and office buildings

Solving Colorado’s Housing and Climate Crisis

With Transit-Oriented Housing, Colorado Could Tackle Two Problems at Once

Colorado’s housing crisis is a climate crisis, too. Over the past several months, policymakers in the Centennial State have debated a variety of options to address these issues simultaneously and produce thousands of affordable and efficient homes in major metros. While the legislative conversation continues, our findings are clear: scarce affordable housing incentivizes suburban sprawl, maintains dependence on cars, and puts unnecessary strain on the climate at a time when Colorado, the nation, and the world have rallied behind the cause of slashing emissions. Now, Colorado has the opportunity to advance meaningful, climate-sustaining housing reforms, particularly in areas near transit. This could increase housing while decreasing greenhouse gas emissions.

Coloradans Need and Deserve Affordable, Sustainable Housing

In some ways, Colorado is a victim of its own success: with its stunning nature, youthful cities, and many commercial opportunities, the state has seen a marked influx of new residents over the past several decades (including many working at RMI). These new Coloradans need places to live, but year after year, the supply of housing has fallen well short of demand. Experts say Colorado needs to produce roughly 325,000 units to stabilize housing prices — a big lift, considering fewer than 40,000 units are built in an average year. However, it is not impossible.

This housing shortage has stoked fierce competition for existing homes, especially near urban job centers. Many Coloradans have been forced to take on excessive housing costs, such that most Colorado renters are now “rent burdened,” spending over 30 percent of their income on rent. High housing costs compete with basic needs like food and medication, compounding various other problems. Such pressures are most acute for existing residents who, when confronted with mounting costs, may sacrifice greatly to remain in place. Housing reform would not only boost construction, but also help these residents from being displaced.

Moreover, displaced residents might have little choice but to move to the suburbs, where cheaper housing comes at the cost of isolation. In such low-density sprawl, residents might be prohibitively distant from economic opportunities, amenities, and one another, demanding extensive (expensive) public infrastructure and entrenching a culture of automobile dependence. Aside from emitting excess greenhouse gasses, worsening climate change and health problems such as asthma, more cars bring more traffic in a cycle known as “induced demand.”

Transportation is now the highest-emitting sector in the country, and critically, these emissions won’t be eliminated by electric vehicles alone. Even if the country electrified 70 percent of all cars by 2030, RMI has found that we would need a further 20 percent reduction in per-capita vehicle miles traveled to meet national climate goals. In other words, truly sustainable policies aim to reduce driving of all kinds, not just the driving of gas-powered cars. Housing reform is a critical means of doing so.

Options Exist to Promote Affordable, Transit-Oriented Housing

Many of the policies that are now, or were at one point, under consideration in Colorado have been tested elsewhere. Take the expansion of “missing middle housing” — multiplexes, cottage courts, and courtyard buildings which, as their name implies, are positioned between smaller apartments and large, single-family homes in terms of form, scale, and price. Middle housing is especially absent in growing cities like Denver, where 77 percent of residential land is exclusively zoned for single-family homes — the most inherently expensive kind of housing, which, on average, uses 64 percent more energy per occupant than attached and multifamily options. Nationwide, over two-thirds of new homes are single-family, and their construction often consumes valuable greenfield or forested land.

Oregon, Maine, California, and Washington have taken their own successful paths to increase production of missing middle housing, demonstrating that these housing types needn’t come at the expense of community character. Some governments, such as Minneapolis, have gone so far as to ban mandatory single-family zoning (which, crucially, is different than banning single-family homes), legalizing construction of duplexes and triplexes on all residential lots. The Colorado General Assembly has thus far resisted such sweeping changes, but states like neighboring Utah offer alternative, incentive-based reforms that may be more attractive.

While their specific approaches have varied, all of these places have embraced one important goal: transit-oriented development (TOD), the established practice of prioritizing dwelling units near transit. These developments allow for more density and usually have fewer parking requirements than other buildings. Ideally, they also contain commercial uses to provide residents ready access to food, jobs, and routine services. TOD is a novel way to build unobtrusive new housing, as well as human-scale, car-free communities offering a range of environmental, economic, and social benefits.­

These benefits are quantifiable: RMI has found that by upzoning and infilling lots along transit corridors, the Denver metro could decrease per-capita vehicle miles traveled 13 percent by 2040 — all without adding a single bus or train to the transit network. During the same period, these changes could reduce per-capita greenhouse gas emissions 8 percent and conserve 82 percent of developable land versus a business-as-usual scenario. Doing so would retain the land’s ability to sequester carbon and could save 10 percent in per-capita water consumption — an urgent concern in the drought-stricken Mountain West.

Will Colorado Again Take the Lead?

Colorado is no stranger to bold climate reforms. In 2021, the state passed its Greenhouse Gas Planning Standard (GHG Rule), a first-in-the-nation policy requiring the state’s Department of Transportation and regional Metropolitan Planning Organizations to estimate the emissions of proposed highway projects and reject projects that fail to decrease emissions over time. In only a few years, the GHG rule redirected billions in would-be highway funding toward sustainable goals like bus rapid transit, and has become a model for similar reforms in peer states like Minnesota.

The GHG Rule proposes to stem the flow of suburban sprawl through transportation planning, but other policies are necessary to reverse the tide and build new housing in urban centers. Recent analysis by ECONorthwest and MapCraft Labs shows a combination of pro-housing policies could increase the number of transit-adjacent development opportunities by 54 percent in Colorado’s largest metros. All this TOD would have little impact on existing single-family neighborhoods and provide Coloradans housing tailored to car-free lifestyles — not to mention incentivizing transit ridership and generally making more efficient use of limited urban land.

Among many potential solutions — including support for missing middle housing and legalizing accessory dwelling units — TOD is a compelling way to produce many units as quickly, unobtrusively, and strategically located as possible. Efforts to encourage these developments over detached, single-family homes would complement Colorado’s GHG Rule and challenge outdated systems at the root of our built environment — systems that have benefitted cars over people, and that today restrict our ability to live healthy, sustainable lives in close proximity to friends and family.

While challenging the status quo is rarely easy, governments everywhere — from the local level to the International Panel on Climate Change — have pledged to use their powers over housing and land use for good. With Colorado grappling with both unsustainable emissions and an unsustainable housing market, TOD is the obvious place to start with both.