Blue states raise housing costs again
Washington Examiner
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Thanks to Bidenflation, buying a house is more expensive than ever. But Democratically controlled states are trying to make the housing crisis even worse by passing strict energy restrictions that will drive up the cost of new construction.
Even worse, some states, such as Colorado, are applying these new energy efficiency standards to existing buildings, forcing building owners to spend millions of dollars upgrading housing units and offices. The only way building owners can recoup these investments is with higher prices.
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If you are a young family looking to afford a home, don’t move to Colorado.
Colorado’s latest regulatory push to make housing unaffordable began in June 2021 when Gov. Jared Polis (D-CO) signed House Bill 21-1286, which called on the Colorado Air Quality Control Commission to issue new energy performance standards for buildings. The legislation charged AQCC with issuing new standards that would help meet Colorado’s goal of reducing statewide carbon emissions by 50% by 2030.
This August, the AQCC issued Regulation 28, which requires all buildings larger than 50,000 square feet (both commercial and residential structures) to reduce energy consumption by 7% by 2026 and by 20% by 2030.
Real estate industry experts estimate Regulation 28 will apply to over 8,000 existing structures and will cost building owners $3.1 billion. The state’s own economic impact analysis admits these costs will be passed on to consumers and tenants. “Landlords might pass on some or all of the costs of implementing this rule to their tenants,” the state wrote, “which will lead to higher rents.”
Higher rents are already an acute problem for Denver, which, according to one study, has seen apartment rent inflation surpass wage growth by a larger margin than any other state in the country. Congratulations on winning the rising housing unaffordability sweepstakes, Denver!
Coloradans who like their gas stoves and furnaces can also kiss those goodbye. The only way building owners can possibly meet the new mandates is by switching from gas to electric. And don’t think for a second those new electric stoves and heat pumps will lead to lower energy bills. Studies show that eclectic heat pumps perform far worse at Colorado’s elevation and cold than they do at sea level warm temperatures.
Hospitals are also going to be huge losers from the new regulations, as they are among the most energy-intensive energy consumers in any state. Virtually every hospital statewide will have to undergo expensive, invasive, and time-consuming upgrades to meet the new standards. And yes, those higher costs will show up in Coloradans’ insurance premiums too.
Colorado used to be an affordable destination for families and businesses fleeing larger Democratically run states. But with each new costly regulation, Colorado is becoming just like the states so many residents tried to flee.