Lots and Lots of Competition

Back there when DIA was nearing completion, economists were worried that there wouldn't be jobs for the construction crews, and the Colorado economy would suffer. Where would all the yellow equipment go?

Silly question. It would come right here, to Boulder County.

Those earth movers are hard at work in Longmont, Erie, and Broomfield, grading land for new subdivisions. There may be more people working on apartments east of Superior than worked on the DIA tower. At 111th and Arapahoe (east of the 287 twin towers), other crews are busy turning a nice patch of prairie into something that could serve as DIA's sixth runway. And in a Colorado version of Mr. Peabody's coal train, Interlocken has removed the last vestige of natural contour from Wadsworth all the way to Rock Creek.

A relatively minor slowdown in home sales since July has masked the greater trend: an extraordinary surge in new home sales at the expense of existing ones. (Of course, there are other "expenses" related to rapid development, but a finance column is supposed to be a Philistine's-eye view.)

Through early October, there were about 3,600 total home sales in the County, and of those, almost a thousand were new homes. We don't have good records going back through several growth cycles, but one new home out of every three or four sold is a remarkably high proportion.

If you are having a hard time selling an existing home, it is most likely because you are losing out to brand new construction. If you get the sense that your home is not rising in value at the 5% or so of 1995, despite the robust economy in the County, blame new construction.

There is more in the pipeline. Some analysts have added up all the approved subdivisions, lots under development, and finished lots, and estimate 10,000 building sites available on the plains of Boulder County. That's a ten-year supply, and growing faster than sales.

Builders are subdividing the County as if there were no tomorrow. Which, of course, there isn't: in the Mecca of growth control, the last subdivisible land is within sight now.

Historically, every growth surge has spawned more growth control. Probably soon, this overabundance of sites will be intercepted by new controls, even in places like Longmont, most likely in the form of building permit rationing. Only when permits are limited will these sites gradually bleed into the market, and return market conditions to the norm of the last twenty years.

Until new controls, all this subdivision would be dangerous -- instead of merely inconvenient for existing home sales -- if builders had not learned from past disasters. Ordinarily, a hot market for new homes results in ruinous overbuilding. An unsold house is expensive to hold, and ultimately must be sold at any price; a mass fire sale, 1980's Aurora-style, is very bad for the whole market.

However, this time around, builders are restraining their impulses to build on "spec", and there is less than a year's standing inventory in any County market. Accumulated land and lots are much cheaper to warehouse for the future than completed homes.

One suggestion for the Boulder City Council. Boulder's housing stock is aging ungracefully, particularly the tract home half, and is not competing well with new construction. "Dated" is too kind a word.

Instead of worrying about the dopes who build trophy houses, or fixer-uppers on steroids, how about giving a hand to the vast majority? Maybe something as simple as a design competition for tract home rehab (my nominee is the superb job at the south end of Edinboro). Or at the other end of the spectrum, once we've bought the last park, and built the last bike path, how about undergrounding all the power lines in town?

If Longmont can do it, why can't the Emerald City?