The apartment industry and its residents contribute $39 billion annually to Denver’s economy, $60.9 billion to Colorado’s and more than $3.4 trillion – or $9.3 billion daily – to the national economy, according to a study commissioned by the National Apartment Association and National Multifamily Housing Council and researched by Hoyt Advisory Services.
Apartments drive local economies by adding employment opportunities and contributing significant revenue. In Denver alone, the apartment industry supports 186,353 jobs. Resident spending contributes $34.2 billion to the local economy, apartment operations add $1.6 billion, new construction contributes $2.5 billion, and renovation and repair of existing apartments add $720 million.
The industry also has a major impact on local, state and national tax economies. Tax payments associated with local apartment operations added $370 million and their residents contributed more than $4.4 billion in taxes to the Denver metro economy. These taxes support schools, improvements to local infrastructure and other critical services in Denver.
All of these contributions have a positive effect on Denver’s economy and, as demand for apartments continues to grow locally and nationally, the benefit to Denver’s economy also increases. The research shows that a significant portion of the existing apartment stock will need to be renovated in the coming years to help meet demand, boosting the renovation and repair sector locally. New construction also is important – there are currently 32,000 apartment units in the pipeline to be built locally. Denver is delivering 10,000-12,000 apartments units per year, and 10,000 were quickly occupied, showing the continued need for new units year over year.
Population growth is a major contributor to apartment demand. Eighty-five thousand millennials have moved to the Denver area over the past seven years and the research shows that, locally, younger people are choosing to rent apartments; the majority of Denver’s renters fall into the 18-35 age demographic. Denver is a desirable market – it’s a gorgeous place to live, with a favorable climate and a strong job market.
Recent trends have seen small to midsize companies move their operations to Denver because they’re having difficulty attracting new employees in other markets. Companies are moving where the people are and, consequently, attracting talent in areas like Denver, where many young people are settling down. As companies come to the area, they bring a need for more apartments nearby.
Locally, new apartment construction is strong in areas where companies are based, such as central Denver and the Denver Tech Center. Apartments in the vicinity of local businesses are attractive, as they reduce commute times and people want to live near where they work to avoid traffic and reduce travel expenses.
Continued population growth seems to be a certainty. Denver will continue to attract people who want to enjoy all that the city has to offer: beautiful scenery, picturesque mountains, plenty of outdoor activities like skiing and hiking, great job opportunities and more. Furthermore, as the current influx of millennials age, they’ll have children and contribute further to the city’s population growth.
Apartments will continue to be a major economic driver in the metro Denver area. Driven by historically strong demand and evolving demographic trends, the apartment industry is providing more housing and spurring stronger economic growth than any point in the last century. The apartment industry positively impacts Denver and the entire country by contributing financially and creating jobs benefiting families and communities. There’s no sign of this changing any time soon.