Denver Condo Buyers Look to Exurbs for Housing Options

A lack of new condos in Denver is forcing first-time buyers to “drive to qualify” in the exurbs.

Younger buyers are struggling to overcome the exorbitant maintenance costs and association fees linked to decades-old condos in greater Denver, The Denver Post reported.

The high barrier to entry is forcing them to look outside the city to new developments in Bennett, Strasburg, Watkins and Aurora to qualify for loans.

Oakwood Homes, in Aurora east of Denver, whose customer base is almost entirely first-time buyers, is among those capitalizing on the disparity and serving this growing clientele.

“People will use ‘drive to qualify’ as a slur, but I think from a holistic approach, we need to bring affordability and value across the metro area. People will drive further. We need to find a way for them to move out of an apartment,” Ryan Smith, president and COO at Oakwood, in the master planned community of Green Valley Ranch, told the Post.

Colorado has lagged in building new condos, in part, because developers haven’t been able to resolve building issues through construction defects claims. Legislative remedies haven’t done enough in bringing down construction insurance premiums for new developments, leading them to question why they would even build in the first place.

That’s a problem in a region where more than half of the homes purchased last year were 30 years or older. These aging properties are often rife with structural issues, energy inefficiencies and higher maintenance costs.

The state government now hopes to intervene and increase new condo supply. On Monday, Gov. Jared Polis signed House Bill 25-1272, creating a multifamily construction incentive program that reduces some legal liability for builders as long as they adhere to stricter construction and warranty standards and allow third-party inspections.

“This new law will lead to thousands of new condos being built across our state,” Polis said in a statement. “By breaking down the barriers that prevented new condos from being built, we are unlocking new, more accessible housing for Coloradans to buy as a starter home.”

— Chris Malone Méndez