PRAGMATIC ISSUES

The law, passed in 2021, and it was meant to fix Colorado’s long-standing ban on inclusionary zoning (a 2000 state Supreme Court case had tied cities’ hands). HB 21-1117 gave cities the authority to require developers to include affordable units in new projects or pay into housing funds.

The Empty Promise of “Affordable Housing” in Denver

Denver’s skyline is sprouting cranes like weeds, but look closer, those glittering new towers aren’t filled with nurses, teachers, or restaurant workers finally getting a break on rent. No, they’re filled with nothing. Empty “luxury” apartments, high-rises that sit dark at night, their glassy façades reflecting back the broken promise of Colorado’s so-called affordable housing solution: House Bill 21-1117.

What Went Wrong

Developer Work-arounds, instead of building affordable units, many developers opted to pay the “fee-in-lieu.” That money does go into housing funds, but it delayed the direct creation of mixed-income apartments.

Financing Incentives, lenders prefer higher-margin luxury builds.

Once the inclusionary rule came back, many developers stacked projects with “market-rate” or “luxury” units, reasoning they could cover the cost of compliance with a few very expensive apartments.
Timing & Supply Glut, a wave of projects were already in the pipeline when HB 21-1117 passed. Many of these opened in the last two years, just as interest rates and rents started to cool. The result? Rows of high-priced, often empty units.

The Result

Denver now has:
A glut of luxury apartments, many with rent specials, free months, or empty units, all are way overpriced compared to what the majority of workers are making.

An affordability gap that persists, the very people HB 21-1117 was supposed to help (teachers, nurses, service workers, young families) remain priced out.

Slower delivery of true affordable stock, because building low-margin affordable units takes longer, requires public-private partnerships, and isn’t as attractive to financiers.

How?

Developers gamed the system. It was always cheaper to pay the penalty than build real affordable units.

Banks demand profit margins. Financing favors luxury builds, so developers cater to lenders first, residents last.

Weak political will. Denver’s inclusionary zoning requirements barely scratch the surface: 10–12% “affordable” units capped at 80% of AMI. That’s not affordable for the cashier at King Soopers.

The Core Issue

HB 21-1117 gave municipalities the tool, but it didn’t change the fundamental economics of development. Without deep subsidies, streamlined permitting, or aggressive land banking, cities like Denver are still at the mercy of developers chasing profit. The law allowed inclusionary requirements, but most cities (including Denver) set the bar low, 10 to 12% affordable units, sometimes only for households at 80% of area median income (AMI). That’s not “affordable” for many Denverites working at lower-wages.

This law was supposed to change everything. For two decades, Colorado cities had their hands tied, unable to force developers to include affordable units. HB 21-1117 cracked that door open again. But instead of unleashing a wave of accessible apartments, it supercharged the luxury building boom. Developers did the math, shrugged, and went right back to padding their balance sheets: build high-end, pay the fee-in-lieu, and let the city figure out affordability later.

The result? A glut of overpriced “market-rate” units, often with rooftop pools and wine fridges, sitting empty while the people who actually keep Denver alive, the baristas, the bus drivers, the teachers, the construction crews, are left fighting for scraps in an inflated rental market. It left us with an affordability crisis paired with a vacancy crisis. Rents remain sky-high, but developers can’t even fill their gleaming towers. It’s the worst of both worlds, people unhoused, people overpaying, and empty apartments that mock the idea of progress.

The Fix

It’s time to stop pretending that half-measures will solve this. Denver needs:

Stronger affordability mandates, not 80% AMI, but 50–60%, where the real need lives.

Vacancy taxes, empty luxury units should come with a penalty, not a view.

Public housing investment, cities like Vienna and Singapore show that only direct public involvement fixes markets warped by profit.

HB 21-1117 wasn’t a solution, it was political cover. Lawmakers patted themselves on the back while the development machine rolled on.

Denver doesn’t need more glass towers.

It needs homes people can actually afford.

Until the city has the guts to stand up to developers and financiers, we’ll keep building castles in the sky and leaving them empty.