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Tempering New Supply and Growing Urban
Rental Demand Bolster Denver’s Outlook
Easing construction paves the way for tighter conditions. Following a local record-breaking delivery total in 2024, developers in the metro are scaling back as they grapple with elevated financing and construction costs as well as slackened rent growth and higher vacancy. Suburban areas like North Aurora and Montbello in Northeast Denver will register a more than 80 percent decline in completions compared with last year, with similar drops in Thornton and Highlands Ranch. In contrast, deliveries will stay historically elevated in popular neighborhoods near Downtown Denver, such as River North and Capitol Hill. However, slowing construction starts — partly drivenby the Expanding Housing Affordability Ordinance of 2022, which mandates affordable units in all new projects within the city of Denver — signal easing future supply infusions. For now, demand for urban living from both in-place and new residents should aid leasing. The metro welcomed record net in-migration last year, with modest job gains expected to sustain household formation in 2025. Hiring in the high-paying tech sector will further lift demand for new units, supporting moderate vacancy compression and rent growth on a metrowide level.