By John R. Lucero
September 11, 2026
Colorado’s housing conversation too often begins with a false choice: affordable housing or market-rate housing.
We need both. But we also need everything in between.
A healthy housing market is a continuum—deeply affordable housing for households with the greatest need; workforce and attainable rental housing; attainable homeownership; and market-rate housing serving households with greater purchasing power.
When one part of that continuum disappears, pressure moves somewhere else.
Today, many Colorado households occupy an increasingly difficult middle. They earn too much to qualify for many subsidized housing programs, yet the cost of newly constructed rental housing or homeownership can remain beyond their reach. They are teachers, nurses, municipal employees, tradespeople, young professionals, small-business owners and families trying to establish themselves in the communities where they work.
That is not merely an affordable-housing problem. It is a housing-market problem.
Attainability is broader than subsidy
Public subsidy is indispensable for producing housing at the deepest affordability levels. It should not, however, become our only vocabulary for discussing housing affordability.
The final price of a home or apartment reflects an accumulation of costs: land, construction, financing, infrastructure, water and sewer, parking, entitlement time, regulatory requirements, insurance, taxes and the return necessary to attract private capital.
If we want more attainable housing, every one of those inputs deserves scrutiny.
Sometimes public investment is the answer. Sometimes additional density can spread land and infrastructure costs across more homes. Sometimes a smaller unit or different housing type creates an attainable price point. Sometimes parking requirements or approval timelines add costs without adding equivalent value. Sometimes an adaptive-reuse strategy can preserve a building while creating housing more efficiently.
There is no single solution because there is no single cause.
Rental matters. Ownership matters too.
Colorado also needs to resist treating rental housing as the endpoint of the housing discussion.
A quality rental home can provide stability, flexibility and access to opportunity. For many households it is exactly the right housing choice.
But households that want to own should have realistic opportunities to do so.
Homeownership has historically been one of the principal ways American families accumulate equity and build household wealth. Entry-level ownership also creates movement within the housing market: a household purchases a first home, builds equity, moves later to another home and makes that original unit available to the next buyer.
When the entry-level rung becomes inaccessible, that progression is interrupted.
This is why attainable ownership belongs alongside affordable and workforce rental housing in Colorado’s housing strategy.
The “missing middle” has two meanings
Housing professionals often use “missing middle housing” to describe building types between detached houses and larger apartment buildings—duplexes, fourplexes, townhomes, small condominium buildings and other modest-scale attached housing.
Those housing types are important.
But Colorado is also confronting a missing middle of the market: households caught between income-restricted housing and the cost of conventional new housing.
The two concepts intersect.
Townhomes, condominiums, smaller homes, thoughtfully designed density and modest multifamily buildings can create housing choices that are difficult to produce when communities effectively offer only two options: a detached house or a large apartment project.
Land-use policy therefore matters to attainability.
So do construction-defect liability and insurance. Colorado has spent years attempting to restore condominium development, yet the economics of entry-level for-sale attached housing remain challenging. That deserves a serious discussion because condominiums historically provided an important first step into ownership.
We will return to that subject in a future Insight.
Rebuilding the continuum
If the problem is created by an accumulation of costs and constraints, the solution cannot be another single program.
Colorado needs to attack the cost of producing housing from multiple directions.
Allow more housing choices. Communities need land-use regulations that accommodate townhomes, condominiums, duplexes, small multifamily buildings and appropriately scaled density. The objective should not be density for density’s sake. It should be allowing the market to produce a broader range of homes at a broader range of prices.
Reduce the cost of time. Time is money in development. Lengthy or unpredictable approval processes increase carrying costs, financing risk and uncertainty—all of which eventually have to be absorbed by the project. Projects consistent with adopted plans and zoning should have a clear and predictable path through the approval process while preserving appropriate public review.
Examine parking and infrastructure requirements. Streets, utilities, water, wastewater and other infrastructure have real costs and must be adequately provided. But requirements should reflect actual project conditions and demand. The same is true of parking. Every unnecessary space, improvement or requirement has a cost, and ultimately someone pays it.
Restore the economics of attainable ownership. If Colorado wants condominiums and other entry-level ownership opportunities to return at meaningful scale, the development, lending and insurance communities must be able to price the risk reasonably. Construction-defect liability and the cost and availability of insurance remain central to that equation. Legislative changes have addressed portions of the problem, but the market itself tells us the work is not finished.
Use public resources where they change the outcome. Public land, infrastructure participation, housing funds, tax increment, tax credits and other financing tools can be powerful. They should be deployed strategically where they close a demonstrated feasibility gap or produce a measurable public benefit—not simply because a particular program is available.
Make private capital part of the solution. Most of the housing Colorado needs will not—and cannot—be built with public subsidy. Developers, lenders and investors need to be able to produce attainable housing while earning a reasonable return for the capital and risk involved. That is not contrary to affordability. It is essential to producing housing at the scale Colorado requires.
There is a simple principle underneath all of these approaches:
Every unnecessary dollar we remove from the cost of producing housing is a dollar we do not have to find later in subsidy or ask a renter or homebuyer to absorb.
Housing is economic infrastructure
Housing affordability is sometimes discussed as though it were principally a social-policy issue. It is also an economic-development issue.
Employers need workers who can live within reasonable distance of their jobs. Communities need teachers, firefighters, nurses, service workers and public employees. Businesses considering expansion pay attention to housing costs because their employees do.
And communities need economic diversity.
A region in which only very high-income households can purchase homes while lower-income households depend on a limited supply of subsidized units is not a healthy housing market. The middle matters.
Lucero Perspective
Colorado cannot subsidize its way out of every housing challenge, nor can the private market overcome every structural barrier on its own.
The path forward requires both: public policy that removes unnecessary barriers and strategically invests public resources, and a private market capable of responding with a broader range of housing choices.
We should continue building deeply affordable housing. We should continue building market-rate housing.
But between those two ends, we need to rebuild the missing middle—both rental and ownership—so that Coloradans can find not simply a place to live, but a realistic path forward.
