I did not expect to be in the same place more than six months after moving across Colorado, back to my home town. I thought I’d be able to find a job that would allow me to either buy or rent a place in about half that time.
But this strange, out of control Denver economy fooled me.
I read with great interest every story about area home prices, apartment rental rates and how many jobs are being created in the metro area. Until recently, I thought the jobs stories were missing an important point: the vast majority of the jobs don’t pay enough to allow most people to afford to buy a home or rent a decent apartment. And the area’s way, way out of line housing costs mean I and most other people need to be paid somewhere around $70,000 a year to keep our housing costs in line with other costs of living.
Last year, the Colorado Department of Labor and Employment reported the annual wage figures for the state were $21,779 for entry-level workers, $49,851 was the mean salary and experienced workers were paid $63,888.
How many industries pay enough to allow people to buy a home or rent an apartment without going broke? Yes, the energy industry was in that category, but now they’re cutting back due to the low cost of oil. The usual boom-and-bust cycle that will continue to drag people up and let them fall. I lived in an area nearly totally dependent on the natural gas industry, so I know what that’s like.
Top Ten Occupations by Number of Job Ads
Feb. 1-28, 2015
Registered Nurses 5,502
Software Developers, Applications 2,365
Retail Salespersons 2,355
Customer Service Representatives 2,322
Network and Computer Systems Administrators 2,118
First-Line Supervisors of Retail Sales Workers 1,880
First-Line Supervisors of Office and Administrative Support Workers 1,863
Computer User Support Specialists 1,835
Computer Systems Analysts 1,640
Marketing Managers 1,518
Source: Help Wanted On-Line, March 26, 2015; Colorado Department of Labor & Employment
But the thing that bugs me the most is I don’t think anyone is doing anything about it. The state legislature apparently thinks it can spur construction of more condominium projects, which is fine. But more condos would likely only help those lucky enough to have one of those high paying jobs.
The thing that bugs me is that I’m not aware of any talk about doing something about the staggering rate of rental increases and home prices, nor the lack of wages to afford to pay those costs.
Some politicians have at least paid lip service to the situation, according to the Denver Business Journal, Gov. John Hickenlooper among them. However, a state agency that might be able to help, the Colorado Division of Housing, received $7.6 million from the U.S. Department of Housing and Urban Development to provide rental assistance to up to 411 people. Four hundred and 11. Not exactly enough to make even a ripple in the pond, IMHO.
Let me point out a few more facts.
The Journal recently reported there are 80 jobs available per 1,000 residents and an unemployment rate of 4.5 percent in Colorado. The Journal also reported that the industries and companies that placed the most help wanted ads in February were health care, Dish Network, those in the computer and IT field and at the University of Colorado. Aside from maybe the Dish Network, most of those jobs pay OK, but I’m not sure any of them pay enough that most people could enjoy reasonable housing costs.
Again in the Journal, rental prices in Denver and surrounding areas were at a median level for a two-bedroom apartment of $2,025. Denver was recently ranked among the 10 least affordable rental markets in the nation.
Meanwhile, Colorado’s home sales prices grew by 9.1 percent in January from a year earlier, the highest rate of appreciation of any state in the country, but metro Denver’s growth rate was even higher, at 10 percent, the Journal reported.
The national average for home-price gains was 5.7 percent over that same one-year period, according to the latest home price index from CoreLogic.
The Journal quoted Anand Nallathambi, president and CEO of CoreLogic, as stating that “until we see sustained increases in income levels and employment … supplies may remain tight.”
Using numbers from the Denver Metro Association of Realtors, the Journal reported the average price of a home in metro Denver increased to $390,067 in February, up from $326,958 in February 2014. That’s a 19 percent increase in one year and has got to be about the best return on investment you can get anywhere. In one year.
Doesn’t that strike anyone else as out of whack?
For job seekers like me, this situation reeks. Thankfully, I have family to put a roof over my head. I could get one of those low-paying service-type jobs, but why? Where will that lead me? I’ll still be here and I don’t want to listen to people complain about their satellite TV service or any of the thousands of complaints heard in other industries.
I should be paid what I’m worth and I should be able to afford a home without going broke. Isn’t that the good ol’ American dream?
Sadly, it doesn’t seem to apply today in metro Denver.