DENVER | Main Development Thread #6

[corey]

If legal pot is the reason for the recent housing price jump why hasn't the same thing occurred in Seattle, Portland, Anchorage, and other cities in those states that have legal recreational marijuana? They have had moderate increases. I think Denver is on the radar of a lot of people because of positive national publicity. The investments in infrastructure in Denver is also paying off. The lack of lower priced condos is raising the prices for everything in Denver and Boulder and, to a lesser extent, the suburbs. Anyway, I think the prices will start cooling off and increase more modestly now.

[Sam Hill]

Denver's population boom and skyrocketing housing costs began long before marijuana was legalized. The census data I've seen doesn't show that the pace of Denver's population growth changed at all after legalization. It has remained pretty steady at about 15,000 people per year since 2010.

If everyone moving to Denver was a bunch of riffraff moving there "for the pot," the unemployment rate wouldn't be 4.1%. Educated young professionals are moving to Denver for the jobs.

In my adventures around the city (I'm apartment hunting - and no I'm not moving back home for the pot) I haven't noticed an overwhelming presence of marijuana.

[Sam Hill]

Originally Posted by Denverite

I thought it was common knowledge that the weed industry is driving the bulk of our economic boom right now.

Hyperbole. The bulk? Really?

[PLANSIT]

Legal weed was not the catalyst for population growth/housing market explosion. Was it a part of it? Sure. But the tide started turning way before its implementation as others have stated.

[Brainpathology]

Originally Posted by Sam Hill

If everyone moving to Denver was a bunch of riffraff moving there "for the pot," the unemployment rate wouldn't be 4.1%. Educated young professionals are moving to Denver for the jobs.

In my adventures around the city (I'm apartment hunting - and no I'm not moving back home for the pot) I haven't noticed an overwhelming presence of marijuana.

absolutely my impression too when I was just there for 2 weeks. If anything, I've noticed the smell less since it was legalized and I've visited plenty of times since then. No difference in friends places in large apt buildings either.

The idea that pot has driven up housing prices is weird. Just really weird. Anyone who can afford a 500-700k house is going to make the choice to move to Denver based on the work opportunities and MAYBE if they have two equal offers the pot thing might factor in a little. And, honestly, if the person doing the thinking isnt a minority it probably factors in not at all.

You guys have a readily verifiable, supported by builders and economists, reason for your lack of housing supply. You're trying to explain the darkness on a cloudy day by postulating that the sun has gone out.

[The Dirt]

Originally Posted by Denverite

I thought it was common knowledge that the weed industry is driving the bulk of our economic boom right now.

Originally Posted by Denverite

First, there's no question had the pot thing not passed that we'd see more modest cost-of-living increases than we are.

Denverite, you keep making these statements but, I haven't heard anything from you that it's pure speculation or opinion. Show me some data that says that in-migration has increased directly due to pot legalization. Colorado and Denver in particular have been hyped nationally for several years and the boom started well before legalization was even a topic on people's lips.

[CherryCreek]

Originally Posted by The Dirt

Denverite, you keep making these statements but, I haven't heard anything from you that it's pure speculation or opinion. Show me some data that says that in-migration has increased directly due to pot legalization. Colorado and Denver in particular have been hyped nationally for several years and the boom started well before legalization was even a topic on people's lips.

I agree entirely. I've seen no evidence of linkage between high Denver housing prices and marijuana legalization. Where's the evidence? From what I can see it's just media speculation based on the fact that prices have accelerated over the past three years. I don't believe it for a second.

Here's a theory: prices have gotten so high because the Denver Broncos signed Peyton Manning three years ago. You got admit it, they did sign him and prices did go up.

What other proof you need??????

[mr1138]

Originally Posted by CherryCreek

I agree entirely. I've seen no evidence of linkage between high Denver housing prices and marijuana legalization. Where's the evidence? From what I can see it's just media speculation based on the fact that prices have accelerated over the past three years. I don't believe it for a second.

Here's a theory: prices have gotten so high because the Denver Broncos signed Peyton Manning three years ago. You got admit it, they did sign him and prices did go up.

What other proof you need??????

X3. Correlation does not equal causation.

Colorado was already one of the most pot-infused places in America, and legalization may have moved that needle only very slightly. In fact most studies I've seen have shown that rates of pot use have barely changed at all. We may have gotten a measurable tourism boost (though of course the tourism office won't say if this is true, and actually goes so far as to deny that it is), but I highly doubt that pot has had any effect whatsoever on the job or housing market. And since we're not a very industrial economy, I don't think that the warehouse rental market or underground party scene are an accurate indicator of the broader real estate market.

What we are seeing is just the end of a years long recession in a very desirable place. If anybody recalls, Colorado has been booming for a while. My entire life actually. It's just that the growth used to be 100% suburban. I remember a news report years back that Douglas County was the fastest growing county in America. When I was a child, you had to drive down US36 all the way to Wadsworth before you hit the Denver suburbs (from Boulder that is). I'm guessing housing supply is tighter now, affecting the supply/demand balance and prices, and I'm not sure if that's a matter of policy changes or just a lull in large suburban developments during the recession. I actually think a couple very large, Rock Creek style suburban developments would help take some pressure off the market. But I say so cautiously, because if suburban units kept coming online at a 1990s rate, Fort Collins and Denver might grow together in a matter of only a few decades. In fact that may already be a lost cause... though I hope that it isn't.

[Denverite]

Originally Posted by corey

If legal pot is the reason for the recent housing price jump why hasn't the same thing occurred in Seattle, Portland, Anchorage, and other cities in those states that have legal recreational marijuana? They have had moderate increases. I think Denver is on the radar of a lot of people because of positive national publicity. The investments in infrastructure in Denver is also paying off. The lack of lower priced condos is raising the prices for everything in Denver and Boulder and, to a lesser extent, the suburbs. Anyway, I think the prices will start cooling off and increase more modestly now.

I don't think there is any data out there to analyze that specifically asked people if they "moved here because of weed", but it's so plainly obvious to me. I guess not to you.

For all of you saying it's unfounded or irrational to assume the weed industry is a driving factor for the influx of more people moving here, you're in the minority of what most people think about it. I can cite many, many personal stories that support this fact, and already have. Out of state cars showing up and the house reeks of weed, drive down Broadway and you smell skunk for miles through Englewood, I hear from friends who say the same thing - people from other parts of the country moving here and the smell of weed follows shortly after, more pot shops that Starbucks, dwindling availability of wharehouse space due to large grow operations... I mean, how can you ignore all of this? It's widespread too. It's not like Schwab, who has one large campus in the Tech Center. The pot industry employs thousands of people all over. Those new people bring money to spend on weed and other services, and it's like a domino effect. It's great for the economy, but it's driving up the housing costs.

As for why Seattle and some of the other cities aren't seeing the same bump may be because their marijuana industry is much more regulated. The ability to capitalize on it here is a bit easier. At least for now. Bear in mind, too, that Denver is a much closer destination for people living in the Bible Belt and Midwest who want to explore the marijuana culture.

Also, I never stated that there aren't other reasons for in-migration. There are other factors such as new business, expanding business, and infrastructure improvements. A lot going on at a fast pace.

[Denverite]

Originally Posted by Sam Hill

Denver's population boom and skyrocketing housing costs began long before marijuana was legalized. The census data I've seen doesn't show that the pace of Denver's population growth changed at all after legalization. It has remained pretty steady at about 15,000 people per year since 2010.

If everyone moving to Denver was a bunch of riffraff moving there "for the pot," the unemployment rate wouldn't be 4.1%. Educated young professionals are moving to Denver for the jobs.

In my adventures around the city (I'm apartment hunting - and no I'm not moving back home for the pot) I haven't noticed an overwhelming presence of marijuana.

This is actually not true. I'm not sure how old you are, but from about 2007 - 2011 there was this housing crisis the U.S. went through. Most everyone saw their home values fall, including mine and everyone else I know, and I lost on it when I had to sell. It wasn't until around late 2011 to 2012 that things started to pick up. Housing prices in metro Denver have had one of, if not the highest jump in decades in just the last year or two, after the legal recreational weed thing and subsequent national attention on Denver on a seemingly daily basis. To think that didn't persuade a lot of people to move here is naive at best. Prior to that, my home value was increasing much more modestly. It's great, I have $200k in equity, and would like to move to get away from stoner neighbors and grow houses, but can't afford anything - or pay for what I sell and lose some of my equity in the process. First world problem. Just saying, home prices jumped a hell of a lot after weed.

[Denverite]

For any of you interested, here's the interview I referenced. A lot of Denver talk from the perspective of a young promoter.

https://soundcloud.com/ra-exchange/ra-exchange-246

[DownhomeDenver]

Originally Posted by bunt_q

Metro districts don't "expire," haha.

haha, I was just basing my comment off of this:

My property taxes are $3200/year (a metro district tax specific to my subdivision is set to expire in 2017 dropping my property taxes to around $2200)

haha i apologize for my miscommunication..haha. suck it. haha

Thanks for the info bunt.

[Denverite]

Originally Posted by DownhomeDenver

haha, I was just basing my comment off of this:

haha i apologize for my miscommunication..haha. suck it. haha

Thanks for the info bunt.

You guys have a lot to learn.

Actually, a metro district can have a finite lifespan. I prefer not to reveal the metro district I am in, but it is called "[insert metro district subdivision name here] Metro District". It was created by the developer of the subdivision I live in to subsidize the infrastructure costs and had a 20-year expiration date. What it is, is the residents in my subdivision are subsidizing the costs of the initial development expenses for utilities, roads, parks, etc. within the subdivision - which is in an unincorporated area. I'm not sure just how common this is, but I suspect many newer subdivisions have these to some degree, or so I have heard.

At the time I purchased my home, I didn't know much about it or what I was getting into. It probably wouldn't have dissuaded me from purchasing my home, but it was an unexpected and rather pricey expense.

I'll give you the benefit of the doubt as these aren't exactly common, but before you try and take a jab, you might want to ask and be educated about it.

[bunt_q]

Originally Posted by Denverite

You guys have a lot to learn.

Actually, a metro district can have a finite lifespan. I prefer not to reveal the metro district I am in, but it is called "[insert metro district subdivision name here] Metro District". It was created by the developer of the subdivision I live in to subsidize the infrastructure costs and had a 20-year expiration date. What it is, is the residents in my subdivision are subsidizing the costs of the initial development expenses for utilities, roads, parks, etc. within the subdivision - which is in an unincorporated area. I'm not sure just how common this is, but I suspect many newer subdivisions have these top some degree, or so I have heard.

At the time I purchased my home, I didn't know much about it or what I was getting into. It probably wouldn't have dissuaded me from purchasing my home, but it was an unexpected and rather pricey expense.

I'll give you the benefit of the doubt as these aren't exactly common, but before you try and take a jab, you might want to ask and be educated about it.

I would like to see the service plan for this district. What is the approving jurisdiction, which county, do you know? I think you are probably wrong - I have never seen one with a dissolution requirement that triggers in 20 years, and I think it is highly unlikely they would have been able to issue bonds if that were the case. You could be right, but it would be pretty one-of-a-kind. Who is your district's legal counsel?

I'll put my knowledge of metro districts against yours. I've organized and been general counsel to dozens of them. Not something I'm especially proud of, but there is no area of Colorado law that I know better. And I don't smoke pot.

If you're willing to PM what district you're in, I can do a 10-minute due diligence and tell you exactly what's up - free of charge, because I am curious now.

Were you the one with the $3,200 taxes? That sounds about right, if your district levies 50 mills, you'd have right about a $250,000 house to drop it by $1,000 after the bonds are discharged. That means the rest of your mill levy is around 110 mills - whew, that's high. I can probably figure out where you live based on that, but not many unincorporated areas are that pricey.

Wait, do you live in Midtown? That would fit the data, right about 158 mills.

[Denverite]

I would rather maintain my anonymity, but I assure you, this is all true. I'm not a moron and as an engineer have worked with many metro districts myself (but not the kind of work you have done).

My understanding is, for whatever legal reasons, the developer created a metro district within an unincorporated area (where I live) for utility and roadway installs. The utilities are governed and maintained by the city, but they wouldn't support it without this metro district or without capital paid for by the developer, or us, the homeowners. It does amount to a high property tax having to have that as part of my property tax bill, but I have confirmed that it does expire, that's the facts, jack.

D.

[Sam Hill]

Originally Posted by Denverite

This is actually not true. I'm not sure how old you are, but from about 2007 - 2011 there was this housing crisis the U.S. went through. Most everyone saw their home values fall, including mine and everyone else I know, and I lost on it when I had to sell. It wasn't until around late 2011 to 2012 that things started to pick up. Housing prices in metro Denver have had one of, if not the highest jump in decades in just the last year or two, after the legal recreational weed thing and subsequent national attention on Denver on a seemingly daily basis. To think that didn't persuade a lot of people to move here is naive at best. Prior to that, my home value was increasing much more modestly. It's great, I have $200k in equity, and would like to move to get away from stoner neighbors and grow houses, but can't afford anything - or pay for what I sell and lose some of my equity in the process. First world problem. Just saying, home prices jumped a hell of a lot after weed.

It is true. Look at the census data. From 2010 to 2011 Denver experienced its largest population gain of the decade. Its population growth has been steady over the past four or five years. This boom clearly started years before the first pot store opened. The median price of a home in Denver began to rapidly increase around October of 2011 and has been steadily gaining ever since with no noticeable jump that would coincide with any change in marijuana law: http://www.zillow.com/denver-co/home-values/

Like I said before, the unemployment rate wouldn't be 4.1% if everyone was moving to Denver for the pot. They're coming for the jobs. Hundreds of thousands of jobs have been created in Colorado in the past four years. Only a small fraction of those are marijuana industry jobs. The argument that legalized marijuana is the main reason for Denver's rising housing costs is simplistic conjecture. I don't think you're going to find any data to back it up.

[Denverite]

Originally Posted by Sam Hill

It is true. Look at the census data. From 2010 to 2011 Denver experienced its largest population gain of the decade. Its population growth has been steady over the past four or five years. This boom clearly started years before the first pot store opened. The median price of a home in Denver began to rapidly increase around October of 2011 and has been steadily gaining ever since with no noticeable jump that would coincide with any change in marijuana law: http://www.zillow.com/denver-co/home-values/

Like I said before, the unemployment rate wouldn't be 4.1% if everyone was moving to Denver for the pot. They're coming for the jobs. Hundreds of thousands of jobs have been created in Colorado in the past four years. Only a small fraction of those are marijuana industry jobs. The argument that legalized marijuana is the main reason for Denver's rising housing costs is simplistic conjecture. I don't think you're going to find any data to back it up.

It's not true regarding home values. Population growth is different.

Edit: ok, you're only looking at Denver proper. It behooves you to look at the metro if you want a realistic look at home prices. Regardless, it's simply not true that home values always increased year over year. You can't argue that as most everyone experienced a drop in the housing bubble. The good news is that Denver, as usual, seemed to suffer a lot less. Our economic swings are usually much less extreme than many other parts of the country, which tends to work in our favor.

And on your employment comment - most of those jobs are low to middle income service jobs. Service jobs are great for young people who, may or may not, have arrived here for the weed scene.

[The Dirt]

Originally Posted by Denverite

I don't think there is any data out there to analyze that specifically asked people if they "moved here because of weed", but it's so plainly obvious to me. I guess not to you.

For all of you saying it's unfounded or irrational to assume the weed industry is a driving factor for the influx of more people moving here, you're in the minority of what most people think about it. I can cite many, many personal stories that support this fact, and already have.

Find us some data to back this up. This is a pretty bold and dubious claim, especially since you're tying it directly to the housing price increases, which started well before legalization. Anecdotal evidence with a pretty obvious confirmation bias isn't going to cut it.

Legalization went into effect on Jan. 1st, 2013. Here's the net migration rates for 1980 through 2013:

 Year	 Net Migration	Natural Increase
1980	28024		29778
1981	40535		31766
1982	50577		33945
1983	37512		35127
1984	2782		34541
1985	5172		34424
1986	-5270		34621
1987	-13997		33548
1988	-24280		32374
1989	-18752		31841
1990	-12964		31804
1991	46125		31436
1992	76805		32117
1993	84261		30929
1994	77077		29958
1995	69825		29168
1996	61527		29901
1997	63020		30429
1998	75102		31443
1999	79319		34187
2000	85877		36920
2001	67091		38591
2002	21251		38945
2003	10313		40062
2004	14300		39427
2005	13779		39944
2006	42896		40230
2007	35000		41124
2008	40469		39685
2009	36267		38648
2010	36954		35910
2011	33745		33906
2012	39166		31970
2013	45275		31111

https://dola.colorado.gov/demog_webapps/dashboard.jsf

As you can see, the recent in-migration trend started in 2006, completely unhindered by the Great Recession. The more recent uptick in-migration starts to pick up around 2011 - 2 years before legalization. We're still well below the in-migration levels of the 90s so, before we attribute the completely precedented growth of the last 2 years to a single factor like legalization, what is the single factor explanation for the much higher growth in the 90s? Here's a more comprehensive report that you can look at - http://www.colorado.gov/cs/Satellite?blo...bs&blobwhere=1251731960386&ssbinary=true

Here's homeownership vacancy and rental vacancy rates 2010-2013:

	US Estimates	CO Estimates	
Year	HVR	RVR	HVR	RVR
2013	2.2	7.3	2.0	6.1
2012	2.3	7.5	2.2	6.5
2011	2.4	7.8	2.6	7.1
2010	2.4	7.8	2.7	7.6

http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk

As you can see, both rates have been declining at a much higher rate than the national average well before legalization.

[Sam Hill]

Originally Posted by Denverite

Regardless, it's simply not true that home values always increased year over year. You can't argue that as most everyone experienced a drop in the housing bubble.

I never said anything like that.

[Sam Hill]

Originally Posted by The Dirt

Find us some data to back this up.

He can't.