BOULDER, Colorado, July 05, 2024 - The city of Boulder is undergoing significant changes in property ownership patterns, as revealed in a groundbreaking new study authored by Jill Adler Grano, a renowned real estate agent and housing researcher at the University of Colorado Boulder. Titled “Changing Patterns of Ownership in the City of Boulder, Colorado,” the report uncovers the rise of institutional investors in the multifamily rental housing market and a substantial increase in second homeownership, both of which are reshaping the city's urban landscape and posing significant challenges to its socio-economic fabric.

In the post-Great Recession era, and particularly during the COVID-19 pandemic, housing markets across the nation experienced dramatic shifts. Boulder's situation is emblematic of these broader trends.

The study highlights how large institutional investors, entities that own more than 1,000 properties, have increasingly acquired multifamily apartment buildings in Boulder. Companies like Blackstone and Harrison Street Real Estate Capital have made significant inroads, prioritizing profit maximization often at the expense of tenants. These corporate landlords leverage economies of scale to implement higher rents, introduce new fees, and reduce maintenance efforts. Furthermore, tenant advocates report that these investors are more likely to evict tenants to replace them with higher-paying occupants, exacerbating housing instability for many residents.

“The entrance of large institutional investors into Boulder’s housing market is reshaping our community in ways that undermine our social and economic stability,” said Grano. “These entities extract value from the community rather than retaining it, posing a serious threat to housing affordability and availability.”

In addition to the rise of institutional investors, the study identifies a surge in second home purchases, driven significantly by the pandemic. As affluent individuals sought new living spaces during the lockdowns, the demand for second homes grew rapidly, outpacing the demand for primary residences. This increased competition has driven up property prices, with the median single-family home price in Boulder soaring from $940,000 in 2020 to $1,400,000 in 2023. Many of these second homes remain unoccupied for much of the year, contributing to a growing number of vacant homes in the city.

“Boulder is becoming a playground for the ultra-wealthy, with second homes driving up housing costs and reducing availability for local residents,” noted Grano. “This trend is reminiscent of Aspen, where second homes constitute nearly 43% of the housing stock, creating numerous social and economic challenges.”

Preliminary data suggests that Boulder may have between 1,000 to 4,000 vacant homes, many of which are likely second homes. This significant number of vacant properties constrains the housing supply, exacerbates the housing shortage, and impacts community dynamics. The study calls for the implementation of a residential vacancy tax to address this issue, aiming to free up housing supply and generate revenue to mitigate the negative impacts of vacant homes.

The specific impacts of the influx of institutional investors and the rise in second homeownership on Boulder are profound. The concentration of property ownership by institutional investors leads to:

Increased rents and housing costs.
Higher eviction rates and housing instability.
Reduced property maintenance and quality of living conditions.
Value extraction from the community, benefiting shareholders rather than local residents.

The prevalence of second homes contributes to:

Inflated property prices, making homeownership out of reach for many locals.
A decrease in available housing stock for full-time residents.
Economic strain on local businesses and services due to fluctuating seasonal populations.
Lower school enrollment, affecting funding and resources for public education.
Reduced sales and use tax revenue, impacting municipal budgets and public services.

To counter these trends, the study recommends several policy measures, including implementing or strengthening rent control laws, instituting a residential vacancy tax, and prioritizing the construction of market-rate housing units affordable to the local workforce. Additionally, increasing flexibility within low-density residential zones to accommodate more housing units without sacrificing neighborhood character is crucial.

“Our city leaders must take decisive action to curb the influence of external investors and prioritize the needs of our residents,” urged Grano. “By adopting a combination of policy measures, we can promote a more equitable and sustainable housing market in Boulder.”

The study underscores the urgent need for state and local leaders to address these changing patterns of ownership. By implementing the recommended policy measures, Boulder can safeguard its future as a thriving, resilient, and equitable urban landscape, ensuring a sustainable and prosperous future for all its inhabitants.

For more information and to access the full report, please visit University of Colorado Boulder’s website.

About Jill Adler Grano

Jill Adler Grano is an award-winning Boulder real estate agent and housing researcher at the University of Colorado Boulder. With nearly two decades of experience in housing and real estate, Jill is dedicated to providing exceptional service and advocating for affordable housing solutions. Her research focuses on housing affordability challenges and opportunities, and she is actively involved in various community initiatives and organizations.