BY FREDA MIKLIN
Peter LiFari is the Common Sense Institute’s 2022 Housing Fellow and the CEO of Maiker Housing Partners. He was CSI’s 2021 Terry J. Stevinson Fellow and co-author, with Evelyn Lim, of the Housing Blueprint, which we reported on in this newspaper on July 7, 2021. That report concentrated on the critical shortage of housing compared to our state’s needs, concluding that creativity and innovation are needed to address it.
On March 7, CSI hosted a panel discussion focused on the issues, including housing, that will impact the April 4 election for Denver’s mayor and city council. Ed Sealover, vice president of strategic initiatives for the Colorado Chamber of Commerce after 14 years as a senior reporter for the Denver Business Journal, moderated.
When Sealover asked LiFari what cities can do to increase availability and affordability to get more people into housing, LiFari responded, “We have a problem…There are no starter homes to be found. The types of products that are being introduced to the market are at maximum cost. We’ve constrained our developers’ ability to innovate because we’ve legislated them into inertia….We (need) to create a regulatory framework that allows the introduction of housing product to our market that meets the needs of all Coloradans….”
LiFari believes a change in our approach to housing is needed, that it is well past time to, “Break down the ideological divides that lead our cities to function in ways that are inharmonious to how the greatest organizations function.” To do so, “We need to look through all our policies and procedures and ask ourselves, are they driving value or are they detracting value?…Is there value in our value chain?”
He continued, “If you look internally, you can find so much opportunity for efficiency and proficiency.” He suggested that mayors, “Fast track your stagnated development projects…Homebuilders are creating the American dream. Let’s not constrain them. Let’s look at our land use, planning, zoning, and building codes. Let’s look at how we can maximize small lot development and create…product that Americans would actually embrace.”
LiFari pointed out that “We all are uncomfortable with change within our communities…we want to ensure they are safe.” The big issue, he said, is that we aren’t building starter homes, even though, “Anyone you talk to wants to create more starter homes.” He recommends that mayors lead in getting starter homes built in their communities. “Bring in our homebuilders, bring in our general contractors, have a competition of ideas. In 1980, 40% of all homes built were starter homes. Today, that number is less than 8%,” he suggested.
Sealover pointed to legislation expected to come from the state that will promote the policy, “If you’re on a transit-oriented line, you can build more. If you have a home and you want to build an accessory dwelling, you can.” He asked LiFari, “Is that going to get us to where you think we need to go?”
LiFari looked back to the 2021 Housing Blueprint he co-authored, in which, he said, “We asked the general contractors that are doing the work what is impeding their ability to deliver a product at a cost that people can afford.” They said, “It’s because of our disaggregated, project specific, hyper-local market,” although LiFari was quick to point out, “Some local governments are doing everything they can.”
LiFari brought up our country’s historical success in introducing the world to efficiencies in manufacturing. Conversely, he said that we have highly inefficient housing markets because individual cities’ different building codes’ “drive economies of scale into negative territory,” and, “Unless we get regional solutions and create consistency, transparency, and predictability for our businesses to be able to enter into markets, we are not going to be able to drive productivity gains (in homebuilding).”
He also raised the advances made through American know-how in building cars, once done by hand and now fully automated, explaining, “The way we bring product to market in the housing industry is the problem that statewide land use policies need to address. It is super controversial, it is uncomfortable, it feels like it’s over reach. But what we are seeing in other industries, we are not seeing in the homebuilding industry and we have to ask ourselves why. The research points to the fractured regulatory environment which creates significant barriers to entry and ultimately impacts the ability for Coloradans to access (housing) product that they can acquire.”
Chris Brown, CSI vice president of policy and research, added that the lack of housing and high prices are a contributing factor to homelessness, a huge issue in Colorado, especially Denver.
When Sealover asked LiFari about the long-accepted standard that housing should cost no more than 30% of pre-tax income, LiFari responded, “It’s a noble endeavor, but a false narrative.” He said that the real question was, “Why are we so adverse to (homebuilders)? People talk about “landlord greed” and “developer greed.”
The truth is, he said, “Americans just don’t understand what it’s going to take to be able to create the future communities of Colorado… We treat housing differently than any other societal concern. We have a winner takes all political construct. Why are we relitigating what we’ve already decided by law and in practice? You hear the precautionary, ‘Oh my goodness, traffic! Let’s study traffic.’ No traffic study looks forward, only backward. I say, let’s harness American exceptionalism that we seem to have forgotten. Let’s start creating starter homes,” by identifying what changes in law and policy will accomplish that goal.
LiFari believes, “We build terrible buildings, not because we have terrible builders, but because we have unworkable codes.” He encouraged looking into new possibilities. “When push comes to shove, we default to parking, we default to single family zoning…We could have gentle density…The problem is, we are 20 to 30 years behind, we are playing catch-up and Coloradans don’t trust the messenger. Housing is the ultimate social contract. You have to buy what your local officials are selling.”
He suggested, “We don’t have a housing target for Colorado. We need to set a target and hold ourselves accountable. Are our land use, planning and zoning constructs driving the successful attainment of the goal or are they detracting? We are adrift at sea and our engine has broken down.”
Focusing on the impact of housing on our quality of life, LiFari said, “I would like to see our great American businesses help us move to where we need to go. It will impact crime. Children go to gangs because they are fleeing trauma, pain, and abuse, which is highly associated with a lack of housing stability.”
Addressing the homeless population, LiFari suggested a practical way to start is, “We should connect with our unhoused community members who are ready, willing, and eager to move into housing. There is a sizable percentage of them.”
LiFari’s sentiments were echoed in a March 11 release by Jonathan Last, editor of The Bulwark, which is self-described as “political analysis and reporting free from the constraints of partisan loyalties,” and by others as “a right-leaning political commentary website.”
Last said, “The more I look around, the more I’m convinced that housing is the key to just about everything. Want to increase economic efficiency by maximizing the labor market’s access to high concentration of jobs? Build more housing. Want to encourage family formation and stable households? Build more housing. Want to eliminate homelessness and all of the attendant social problems that come with it— including crime, addiction, and abuse? Build more housing. Remember the great economic expansion of the 1980s? That just happened to coincide with an expansion in the number of housing units.”
Last included two graphs showing the meager growth in housing inventory in the past 20 years and the dramatic spike in housing prices over the same time frame, demonstrating the classic economic concept that when demand exceeds supply, prices go up.