Oil prices surged Monday following the weekend’s military strikes on the major oil-producing country by the U.S. and Israel. U.S. oil rose 6.3% to $71.23 per barrel, while the primary global price rose 6.7% to $77.74 per barrel.

If the war lasts for another week, oil might increase to about $100 a barrel, which likely would drive up gas prices nationally for U.S. motorists to about $3.75 or $4 dollars a gallon, said Ramanan Krishnamoorti, a professor and vice president for energy and innovation at the University of Houston in Houston.

But if the attacks on Iran last a month, Krishnamoorti said a barrel of oil could soar to $150 and gas could jump to $5 a gallon. He said the last time oil was at $150 a barrel was in 2008, before The Great Recession and technological advances in drilling unlocked more oil and gas.

Even if the war drags on for a while, Krishnamoorti doesn’t foresee the long gas lines of the 1970s. during the Arab-Israeli war in retaliation for U.S. support of Israel.

“We have plenty of production, and we are pretty well self-sufficient, along with Canada and Mexico. We don’t need to import oil from anywhere else, except those two countries,” Krishnamoorti said.

the administration had projected the war could take four to five weeks, “but we have the capability to go far longer than that.”

The U.S. produces approximately 14 million barrels of oil a day, Krishnamoorti said. Iran produces 3.5 million to 4 million barrels a day. However, Iran controls part of the Strait of Hormuz in the Persian Gulf, through which 20% of the world’s oil supply passes.

While Americans are unlikely to see long lines at gas stations if war on Iran extends into weeks, they are likely to pay higher prices, he added.

Gas prices in Colorado were ticking up before the strikes on Iran were launched over the weekend, said Skyler McKinley, spokesman for Colorado AAA.

“Folks are going on road trips, spring break is kicking off,” McKinley said.

And metro Denver stations will soon switch to the “summer blend” of gas, reformulated fuel that burns cleaner and releases fewer toxic emissions. Stations in a nine-county region must sell the gas in the summer because the area doesn’t meet federal air quality standards.

McKinley said the reformulated gas will add about 15 cents a gallon.

“Will consumers see more expensive gas prices in the coming weeks? Absolutely. That was going to be the case before anything happened in Iran, because it was already the case structurally,” McKinley said.

The average price for gas statewide Monday was $2.88, up 2 cents from Sunday. A month ago, the price was $2.58 a gallon. A year ago, a gallon of gas cost $2.96.

McKinley said gas prices had been lower recently due in part to price wars between new gas stations in the south Denver area.

In the second half of last year, Gov. Jared Polis released a series of executive orders to reduce spending after federal tax cuts threw off Colorado’s budget. The state pegs its tax laws to the federal government’s and faced a $783 million hole after H.R. 1, known as the “big beautiful bill,” passed in July.

Lawmakers partially filled the hole by preventing some tax cuts from taking effect at the state level, but largely punted decisions about reducing spending to the governor.

One of the most controversial cuts would have capped caregivers’ paid time at 56 hours per client. Family caregivers have said for their medically complex loved ones, and their budgets won’t work if they have to continue caregiving around the clock without pay.

The Joint Budget Committee accepted most of the governor’s cuts for the current fiscal year, allowing them to take effect, but opted not to immediately cap caregiver hours, said Sen. Judy Amabile, a Boulder Democrat.

Members know they’ll have to make some reductions to Medicaid in the fiscal year starting in July because it makes up one-third of the budget, but how deep those cuts will go depends on what the upcoming revenue forecast shows, she said.

The cap on hours, which had been scheduled to take effect in April, would have saved about $168,000 in the fiscal year ending in June and $1.1 million in the next one, according to the Colorado Department of Health Care Policy and Financing, which runs the state’s Medicaid program.

The department has identified home- and community-based services to people with disabilities as an outlier in the speed at which costs have grown since the pandemic.

If lawmakers determine they have to cap caregivers’ paid hours, they’ll need to give families ample notice so they can start preparing, Amabile said.

“There’s no sacred cows,” she said. “Nothing is off the table, but I want to make sure we’re protecting families.”

Discussions in the budget committee suggest lawmakers want to see a strong exemption process for people in unusual situations before voting for cuts or caps, said Julie Reiskin, co-executive director of the Colorado Cross-Disability Coalition.

Any cut is going to be painful for a certain fraction of the community of people with disabilities, but if the state can’t rein in costs, it may scuttle some types of support entirely, she said.

“I can tell that the legislators are struggling,” she said. “No one wants to do this.”

Most home- and community-based services are , making them a clear target as states face Medicaid funding in the coming years. States have to pay for institutional care for people with disabilities, however, so they risk much larger bills if people who previously lived in the community move to nursing homes.

When states faced a drop in federal Medicaid funds in 2011 following a temporary increase during the Great Recession, all either reduced the number of people who would receive optional services or spent less on each qualifying person, . Waiting lists for home- and community-based services increased in roughly half of the states.

While the legislature can’t balance the budget without Medicaid cuts, it also can’t realistically reduce Medicaid spending enough to avoid pain elsewhere, Amabile said. Even if Colorado didn’t have the constitutional requirement to refund tax collections when they grow above a certain amount, the state would still face painful decisions this year, though allowing it to keep more revenue could help in the future, she said.

“If something doesn’t change, next year we’re going to be in the same situation, and the year after that we’re going to be in the same situation,” she said.

The state might be able to find efficiencies that save money without meaningfully impacting benefits, such as identifying when agencies that manage people’s home care are taking a share out of proportion to the services they provide, Reiskin said.

But coming up with those solutions takes longer than the three months lawmakers have left in session, she said.

“These are conversations that are going to take a couple years, and they have to balance the budget this year,” she said. “This is just a very difficult time for everyone.”

The real problem isn’t in Washington. The real issue is right here at home, under the Gold Dome.

As a member of the Joint Budget Committee, I have a front-row seat to Colorado’s fiscal reality. The truth is, regardless of what happened in Congress, the Colorado state budget was already projected to start the next fiscal year at least $700 million in the red. Why? Because of years of overspending, a lack of priorities, and zero budgetary discipline from the majority party.

Over the last seven years, Colorado has added more than 7,000 new full-time state employees. We’ve created a brand-new department and several new offices. That is not the behavior of a state with a revenue problem; it����ap the behavior of a state with a priority problem. One-party control placed more importance on growing the size of government and creating new programs than on funding the essentials like K-12 education, health care, roads, and public safety.

Rather than taking responsibility for their choices, Polis and his allies want to raise taxes again, only this time they’re aiming squarely at the people who can least afford it. Their plan includes ways to exempt Colorado taxes from the recent federal tax breaks — increasing taxes on overtime and doing the same for taxes on small businesses and job creators. These aren’t just “wealthy corporations”; these are the neighborhood restaurants, family-owned shops, and the very workers who are already struggling with the highest inflation in a generation.

This approach is cynical. It’s shortsighted. And it’s wrong.

“Right now, we don’t have the cash to pay our bills.” That����ap not me saying it; that����ap from the governor’s own budget director. So where is the governor’s plan to reduce General Fund spending, and why hasn’t he promptly implemented it? Did he suddenly forget how to issue an executive order?

Past governors, facing far greater economic challenges after the 9/11 terrorist attacks and the Great Recession, immediately cut spending and discontinued non-essential services. If Polis truly wanted the legislature’s help, he would have given us the authority in the special session to cut spending.

But in spite of the governor’s lack of action and unwillingness to work with Republicans, my colleagues and I are introducing a bill to save $663 million, and not a single person’s tax bill will go up. By pausing the refund in the family affordability tax credit that sends hundreds of millions of dollars out the door each year, we can close the entire budget shortfall without raising taxes on anyone. It����ap a simple, responsible step to keep our budget balanced and protect essential services.

Colorado’s families are tightening their belts every month to make ends meet. It’s time their state government learned to do the same and keep more money in the pockets of hardworking families, small business owners, and employees, exactly where it belongs.

We need a serious conversation about spending priorities. That means reining in the out-of-control growth of state government and respecting the will of Colorado voters who have repeatedly said “no” to higher taxes.

I’ll say it plainly: we don’t need a special session — we need an intervention.

State Sen. Barb Kirkmeyer represents Senate District 23 and serves as the ranking Republican member on both the Joint Budget Committee and the Senate Appropriations Committee.

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The city has been living high on the hog for more than a decade, growing city and hiring hundreds, if not thousands, of new employees. Like a majority of Denver taxpayers, The Denver Post editorial board has supported much of the spending (as both investment in our city and as a way to recover from the dark days of COVID).

We’ve also opposed some of the more outlandish pet projects that we feared frittered away the city’s sales tax revenue. It’s too late now to rededicate those millions of dollars in sales tax increases to the city’s general fund operations.

Almost two years after taking office, Mayor Mike Johnston will oversee a reduction in staff and services for the first time since the aftermath of the 2008 housing crisis and Great Recession. Sales tax revenues will be down $50 million this year from projections and down $100 million in 2026 from 2025 levels. That represents about a 7.5% reduction in revenue, not accounting for anticipated increases in costs for inflation and city growth.

Layoffs, furloughs coming for Denver employees amid budget crisis, mayor says

Given that bleak outlook, we are disturbed that up until last week, the city was considering hefty raises for staffers in upper management positions. City Council smartly sidelined that proposal from the mayor's office, and in sharp contrast, Johnston's furloughs will be graduated, so lower-income employees will take two days unpaid, and higher-income employees will take up to seven days unpaid.

The cuts will come at a terrible time – reductions in staff from President Donald Trump have left thousands of federal employees who live in Colorado out of a job, and the state of Colorado is slowing the pace of growth in accordance with TABOR spending limits. Luckily, private-sector hiring has remained strong across the U.S., according to the most recent jobs report, cutting the risk of a possible recession.

Johnston is correct, however, to make adjustments now in the budget.

Certainly, this could just be a mini-downturn that could be weathered with a combination of discretionary spending reductions, contingency funds and rainy day funds. But federal policy is causing uncertainty, to put it mildly, and that can have disastrous consequences.

Consumer confidence is extremely low, meaning more people are spending less across the country, including downtown Denver, where the majority of the city’s sales tax revenue is generated. Big cities like Dallas, Denver, Chicago, Houston, New York, Miami and San Francisco are also being hit by the effects of vacant office buildings. Cities across the nation are cutting their budget.

In Denver, office buildings are selling for far less than they did even 10 years ago, and vacant office space means fewer commuters spending their dollars in the city. Add on top of that a false perception that Denver is unsafe or that it is filled with homeless encampments, and you’ve got a perfect storm.

Getting Coloradans and tourists back to the city, and spending their money, is a key part of recovery for the city. Recovery is also crucial for our small businesses, especially retail stores, restaurants and bars. No one can patronize businesses that aren’t open.

Johnston has a plan to bring people back downtown. Some of those plans are immediate – finishing the 16th Street project and increasing the presence of police and other security services. Some of those plans are ongoing -- Johnston has already cleaned up the homeless encampments in downtown, leaving not a single tent in the urban core as the city has provided housing options to more than a thousand people. The city will continue to spend millions on the program so the camps don’t just spring right back up.

Most of the city’s capital improvement projects are funded with dedicated bonds paid for by property tax mill levies. That revenue stream is still growing despite the sharp decline in commercial real estate evaluations. The increase is  driven by the continued growth in residential home values.

These are strange economic times, and even top economists are finding it hard to predict what will happen next.

In such days, fiscal conservatism is prudent. Hiring freezes, furloughs and layoffs may seem dramatic for a city that only a few short years ago had 16% fiscal reserves, but taking action today will forestall more dramatic cuts should the economy take a turn for the worse.

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The planned protest, led by the Colorado Education Association, is striking not only because thousands of educators are expected to participate and the gathering has forced some schools to close for the day, but because it also marks a turnabout for the state, which only a year ago celebrated the “fully funded era” for public schools.

Polis and legislators promised last year to eliminate a maneuver called the “budget stabilization factor,” which lawmakers have used since the Great Recession to divert money from public schools to other state budget priorities.

Lawmakers also created that is supposed to allocate during a six-year period starting next fiscal year.

But now, legislators are considering giving districts less money than promised as they try to figure out how to plug that billion-dollar hole — leaving district leaders and teachers union representatives frustrated that lawmakers are backing away from last year’s agreement even before it kicks in.

“The deal has already been made,” said Scott Smith, chief financial officer of the Cherry Creek School District. “If (lawmakers) can’t honor that, they need to show up and tell the constituents of this state that, because of their spending habits, they have to cut K-12 again.”

Polis pushed back on accusations that public school funding is being slashed, noting that his plan calls for a $138 million increase to K-12 funding next year.

“We’d love to find ways to better fund schools, but the exercise this year is how do we create a balanced budget that increases funding for our schools,” he said in an interview.

Polis’s budget proposal

Polis has proposed changing the way Colorado determines how much per-pupil funding each district receives, something he said is needed to ensure the state can implement the new school funding formula.

Instead of using a four-year enrollment average as set under the deal struck last year, Polis wants to rely on a single-year enrollment count. In doing so, he said the state would save $147 million — as enrollment has fallen in many districts — and ensure it can still implement the new funding formula.

“There would be no money for that unless there was an infusion of money from voters or other sources,” Polis said. “…That is the mechanism for funding the new formula over time, fully delivering it, leading to significant funding increases for our schools.”

District leaders argued the governor is eliminating multi-year averaging as a way to cut the state’s budget without calling it a cut – something Polis denied.

“We actually told (districts) last year we’d have to get rid of averaging. They just didn’t want to hear it,” the governor said. “This year they have to hear it or they’re not going to get more funding. We have to increase their funding… you can’t increase funding out of nothing.”

By using averaging to set per-pupil funding, the state is paying for students who are no longer in school buildings, Polis said. For example, he said, if a student moved from Longmont to Denver, the state is paying for them in both districts after the pupil hasn’t lived in Longmont for several years.

“We need to invest in kids and teachers and not phantom students from years gone by,” Polis said.

Colorado Education Association President Kevin Vick pushed back on the assertion that schools are operating with excess funding. Class sizes are too large, staffing is turning over and schools struggle to provide enough mental health and other supports to students and districts, he said.

The reason teachers are rallying Thursday is to highlight that “schools cannot absorb anymore funding loss without drastic things happening,” Vick said.

So many educators are expected to attend the protest that major metro districts, including Aurora Public Schools, the Boulder Valley School District and Adams 12 Five Star Schools have canceled all classes districtwide.

More than 100 schools in Denver will also close, although Denver Public Schools plans to keep others open by using substitutes and central office employees.

The impact on school districts

School officials said averaging helps rural districts respond to changes in enrollment, which can create volatility given how small their student populations are.

Districts with declining enrollment will bear the brunt of the budget cuts if averaging goes away, said Brett Johnson, chief financial officer for Aurora Public Schools.

The method also gives districts, including those in metro Denver, a “soft landing” as they battle declining enrollment and weigh difficult decisions, such as closing schools, he said.

“That����ap a policy change that is being used to cut our budgets,” Johnson said, adding, “K-12 isn’t always aligned on this… but on this, we are all-but-unanimously aligned that eliminating averaging is a bad policy idea.”

Unlike other metro districts, Aurora is experiencing an increase in enrollment thanks to an influx of immigrant students and higher housing demand. But the district benefited from averaging when enrollment first dropped a few years ago, Johnson said.

School districts are not just facing financial pressure due to the state’s budget gap, but also because of falling enrollment and potential federal funding cuts by the Trump administration.

Last month, DPS eliminated 38 jobs in its central office to save about $5 million. While the state’s largest district expects to balance its budget this year, Superintendent Alex Marrero acknowledged financial challenges in a letter to staff and families.

“We are facing great uncertainty compounded by significant concerns for our future funding from both the state and national levels,” Marrero wrote.

For Jeffco Public Schools, the state’s second-largest district, the end of averaging would lead to a $21 million drop in general fund revenue because 3,400 fewer students would be counted compared to the 2024-25 fiscal year. The district received $982 million in general fund revenue this year, according to a March 5 presentation.

The Cherry Creek School District will receive $17 million less than officials expected. Smith, the district����ap chief financial officer, called Polis’s budget proposal a “non-starter.”

“The governor and the leadership and the legislature have spent themselves into a fiscal crisis and now they are trying to scapegoat K-12 to solve that problem for them,” he said.

Rep. Julie McCluskie, a Dillon Democrat, has proposed an alternative to the governor’s proposal, which would maintain four-year averaging but implement the new school finance formula at 10% rather than 18% of the $500 million.

She said the Joint Budget Committee has set aside $150 million in general fund money as a placeholder for education.

“As long as we have that $150 million, which is base funding we were anticipating, we should be able to afford the proposal that we have on the table right now,” McCluskie said.

McCluskie’s plan would still mean districts receive $48 million more in funding next year, less than the expected $95 million, said Tracie Rainey, executive director of the Colorado School Finance Project.

“At this point in time, we’re still not seeing what we’re looking for,” said Bret Miles, executive director of the Colorado Association of School Executives.

And what districts want, he said, is for the state to give schools everything they were promised last year.

Denver Post staff writer Nick Coltrain contributed to this report.

She and her husband excelled in the kitchen, whipping up fresh seafood and ceviches from their homeland. But when it came to starting a business, they didn’t know where to begin.

Through social media, Aguilar discovered a Commerce City-based nonprofit offering Spanish-language business classes geared for Colorado’s Latino community, teaching the basics of finance, marketing, administration and U.S. culture.

even hosts a boot camp for entrepreneurs who dream of opening their own food truck — the , or Salt and Pepper, program.

Now, Aguilar and her husband Ramon Lizarraga’s food truck, , is so successful, they’re expanding.

“We Hispanics are hard workers,” Aguilar said. “We always try to do better and better, but sometimes we don’t have the right information, so that����ap why Adelante makes a lot of difference in our community.”

Latino-owned companies are the fastest-growing segment of the United States’ business population, according to a . U.S. Latinos own nearly 5 million businesses, generating more than $800 billion in annual revenue. Latino-owned businesses grew 57% in the U.S. between 2007 and 2022, whereas white-owned businesses grew 5% in the same time period, the report found.

Latinos themselves contribute more than $3.7 trillion to the nation’s economy, helping drive growth in the country.

In Colorado, more than 90,000 small businesses are Hispanic-owned, with Hispanics making up 20% of the state’s workforce and nearly 14% of its business owners, according to .

Adelante Community Development founder Maria Gonzalez has her hand in building the largest Latino business ecosystem in Colorado. By providing training programs, she wants to ensure the state’s Latino entrepreneurs have the knowledge and support they need to succeed — particularly at a time when Latinos can feel attacked by a and immigrants.

“As long as we’re doing things the right way, waking up with the most amazing energy, we are going to do good,” Gonzalez said. “We’re being targeted in this crucial moment, but all I hear in our meetings is, ‘We’re going to move forward.’ Yes, this might be very painful and hateful, but at the end of the day, we don’t give up. We’re very resilient, we’re hard workers and we are here to thrive.”

Building generational wealth

Gonzalez, who has been an entrepreneur for 25 years, struggled to keep her insurance business afloat during the Great Recession. She lost her house through foreclosure and her vehicle was repossessed. She didn’t know how to help her business recover and noticed other Latino business owners struggling without resources.

She became the resource she needed, founding Adelante in the mid-2000s after learning from local business courses.

Adelante offers multiple courses a year — all in Spanish — on accounting, digital strategy, business administration and helping entrepreneurs navigate the complicated web of licenses, insurance, taxes and regulations.

“We didn’t know how to register the business, so Maria helped us do that,” Aguilar said. “We didn’t know anything about taxes. The health department. The inventory. Now, we have a successful business and are planning on expanding.”

Pata Salada Ceviches, which imports its seafood from Mexico for authentic flavors, opened in 2023 after Aguilar went through Adelante’s $750 food truck training program. The organization offers scholarships for community members in need, although the federal funding backing that aid has since dried up, Gonzalez said. Adelante is looking for new grants.

Denver has been recognized as among the best places in the nation to start a food truck, but Gonzalez said the regulations to operate mobile businesses within metro Denver make the venture a bureaucratic mess.

“Food truck regulation is a nightmare in Colorado,” Gonzalez said.

To open a food truck, an owner might need to secure 10 to 15 different licenses, she said, and if an operator drives down the road to a new jurisdiction, all those licenses and regulations can become moot. That red tape can be confusing for anyone, but especially someone who doesn’t speak English, Gonzalez said.

Adelante helps its clients navigate the licenses and regulations, but is also pushing for legislation to make the process easier.

Gonzalez said she’s working with state Rep. Manny Rutinel, an Adams County Democrat, to pass a that would establish a reciprocal licensing and permitting system between local jurisdictions so food truck operators wouldn’t need entirely new licenses to operate in a nearby city, like when crossing between Denver and Aurora.

In addition to the permitting, Gonzalez also helps her clients develop menus, design logos and strategize social media marketing.

Plus, the Latino-centric courses educate clients on cultural differences, such as the prevalence of paying with debit and credit cards in the U.S. compared to Mexico, where people predominantly use cash.

Financially, Gonzalez said a food truck can be a more affordable and less risky operation for a fledgling entrepreneur. Adelante has supported more than 200 food truck operators, Gonzalez said.

“You could buy a food truck within $10,000 and then go send it to a fabricator to make it compliant and pay another $20,000 and you’ve already got a business,” Gonzalez said.

Pata Salada Ceviches has plans to open a stall inside , a sprawling Latino market and food hall in Aurora. With Adelante’s continued guidance, Aguilar dreams of owning brick-and-mortar ceviche joints in the future.

“I know if I build this business right, I can leave something for my two kids and they are going to benefit,” Aguilar said. “We try to explain that to them. They see us working hard and doing things right, and I hope one day they can keep doing this.”

Harry Hollines is the chief strategy officer at the Colorado-based , where he oversees the institute’s entrepreneurship accelerator, .

Hollines believes the future growth of the U.S. economy hinges on the success of Latino entrepreneurship. He sees Latino business ownership growing along with the state’s demographic shifts. By 2050, Latinos are expected to make up nearly 30% of the U.S. population.

Since 2000, Colorado’s Latino population has grown 72% — twice the state’s overall population growth rate of 35%, according to the . Latinos are the second largest racial or ethnic group in the state, at 22% of the population

While Hollines is heartened to see the growth in Latino businesses, he said there needs to be an understanding of the difference between businesses making income and building wealth.

Latino-owned businesses tend to be smaller in scale, with only about 5% of Latino-owned businesses in the U.S. having employees and fewer than 3% generating more than $1 million annually, Hollines said. This means they have a harder time generating wealth at the company and ownership levels and within the community by creating workforces.

More resources should go toward helping Latino-owned businesses expand and grow, he said.

“If we don’t have entrepreneurs growing relative to the demographic shifts happening, you’re not going to have as many businesses, not going to have as many places to buy from and the dollars won’t circulate from the economy at the same rate,” Hollines said. “Latino businesses are important because we’re talking about the backbone of the U.S. and Colorado economy.”

“We need to feel secure”

In 2019, Erika Rojas was driving with her five kids when her car gave out. She called a local mechanic, who told her he didn’t like working with women.

The more Rojas talked with other women, the more she heard similar stories about women being disrespected or made to feel uncomfortable at auto repair shops.

The Aurora resident wanted to create a mechanic experience that not only catered to women, but also taught them basic car maintenance — like how to change a tire or use jumper cables — so they could feel empowered.

The move would be a career change for Rojas, who previously ran a catering business. She loved to cook but struggled to keep up with the administrative side.

“We need to feel secure, and we need to learn,” Rojas said.

Rojas, a native Spanish speaker, connected with Adelante and took its business courses. The organization helped her create a business plan and bring her idea — Pink Auto Services — to life. The small business is expected to open this fall in Aurora.

“Everything was up here,” Rojas said, tapping her head. “Now, it’s here in my business plan, and I can show other people.”

Rojas recently met with representatives of in Aurora to discuss a partnership in which the school’s auto technician students could get experience working at her shop.

Not only did Rojas learn from Adelante’s courses, but she said the organization’s one-on-one mentoring makes her feel like she has someone on her side as she enters uncharted career territory.

“Latinos need a space like this,” Rojas said. “Adelante is different. I see Adelante like my family. They make me feel comfortable, and I learn so much.”

The region added nearly 20,000 new apartments last year, about double the typical pace seen in recent years.  And while demand rose to the occasion, with 14,082 additional units leased, that absorption turned negative in the final three months of the year, causing worried landlords to cut rents to remain competitive.

“So we’ve been talking about winter is coming, like the TV series (“Game of Thrones”) for a while. The statement this quarter is that winter has arrived,” said Cary Bruteig, who compiles the quarterly updates on behalf of the association and is a founder and principal of Apartment Appraisers & Consultants in Denver.

Between the third and fourth quarters, average monthly rents metro-wide fell from $1,911 to $1,842, marking a 3.6% decline. For only the third time in records going back to 1990, rents in metro Denver declined year-over-year, with average monthly rents falling from $1,870 at the end of 2023 to $1,842 at the end of 2024, a 1.5% drop.

Add on the 2% annual rate of inflation seen in metro Denver, and tenants theoretically are paying 3.5% less in real dollars.

Annual rent declines are exceedingly rare, and the last two — in 2002 and 2009 — were both tied to major economic downturns. The first, following the dot-com bust and 9/11 attacks, was 0.9%. The second, after the housing crash and Great Recession, was 1.5%, matching last year’s decline.

High unemployment and a weak economy aren’t to blame this time around. Rather, supply has gotten ahead of demand in an unprecedented way, Bruteig said.

Developers added 19,910 new apartments last year, up from 13,246 in 2023 and 10,992 in 2022, which was closer to the historical average of around 9,000 to 10,000 new units a year seen in the recent past. Last year, developers expanded the region’s apartment supply by nearly 5%, a pace unrivaled since the 1970s, when the state was coping with an influx of baby boomers.

Tenants stepped up to lease or “absorb” 14,082 of those new units, which was a very strong showing, at least through the first three quarters. Things looked stable despite all the added supply until the fourth quarter, when absorption turned negative by 4,862 units. Renters, stuffed to the gills, essentially pushed their chairs back from the Thanksgiving table and said enough.

That caused the vacancy rate to soar, which, in turn, forced some landlords to start cutting rents.

Bruteig said a 7% vacancy rate is typically when landlords start getting serious about reducing rents, usually after offering significant concessions to attract new tenants. Denver County had the highest vacancy rate at 7.5%, followed by Adams and Arapahoe counties at 7.2%. Boulder and Douglas counties had the lowest vacancy rates at 6%.

The vacancy rate rose in all 33 submarkets that the Apartment Association tracks, with Denver’s northeast area reaching a regional high of 9.3%, up from 5.8%. The next biggest increase came in the Lowry neighborhood, which saw its vacancy rate go from a tight 3.6% to 6.7%.

Downtown Denver, an area that has seen heavy new apartment construction, saw its vacancy rate shoot up from 6.6% to 8.6%. And the communities near the airport saw the vacancy rate shoot up from 6.2% to 8.5%. The Aurora East and West submarkets also reached 8% vacancy rates.

Bruteig has warned about supply imbalances for several quarters, but even he was surprised about how quickly conditions shifted. Bruteig had expected the shifts in vacancy rates to be more contained and concentrated, as newer communities pirated tenants from older ones, forcing them to cut rents first.

Instead, the supply deluge quickly overran every submarket, every age category of apartment and every apartment type, with older apartments and studios seeing some of the biggest increases in vacancy rates.

Even in affordable properties, where demand has greatly outstripped supply for decades, the vacancy rate rose from 3.86% to 4.2% in the final three months of the year.

All of that has translated into rent cuts, which have been most dramatic in Aurora.

Eastern Aurora has seen average rents fall from $1,713 to $1,596 in just three months, while western Aurora saw them drop from $1,577 to $1,477. Big discounts also happened in Westminster, where rents fell from $1,752 to $1,636.

Denver rents held up better, but given the big jump in vacancy rates, it could be only a matter of time before they tumble.

Another 15,000 new apartments are expected to come online this year, before a sharp decrease in the years that follow. Given that the first quarter is historically a weaker period for leasing activity, the pressure on landlords could intensify, offering tenants looking to relocate the kind of bargains they couldn’t have conceived possible only a few months ago.

“Our goal is to be as close to right as possible. The beauty of this office is that it’s not influenced by politics or policy. We’re just doing what we think is right,” Garner said.

Both are retiring as Colorado’s demographic story has shifted to one of fewer children, reduced net migration and an unprecedented surge in residents over age 65, who will soon be the fastest-growing age group in the state.

Colorado’s population, which averaged annual gains of around 76,000 a year last decade, has grown less than half as fast this decade. Demographically speaking, the state looks like it has peaked and what is ahead will be much different than what is behind.

Companies rely on demographic forecasts to understand if they will find enough workers as they expand or relocate. Developers use the numbers to determine where homes, stores and hospitals should be built. Local officials track the numbers to decide where to open and close schools, add or widen roads and allocate limited tax dollars, among many other things.

“Elizabeth’s accurate population projections and analysis have been vital for planning in infrastructure, education, health care and economic development,” said Kate Watkins, who is replacing Garner as the state demographer, during the annual on Nov. 1.

DeGroen worked on improving statistical models and making forecasts as precise as possible. Garner provided more than 800 presentations across the state during her tenure, making the data relatable to government officials, community planners and business leaders, Watkins said. She quietly guided some of the most far-reaching decisions made statewide and in communities large and small.

“I think she has a unique gift of really explaining data and making it actionable and relevant for communities,” said Brian Lewandowski, executive director of the Business Research Division at the University of Colorado Boulder’s Leeds School of Business. “She has that gift of describing why we should care and why we should be paying attention. She can do it with humor too.”

Colorado’s growth has not come without pushback from those already here unhappy with congested roads and higher home prices and rents or the general sense that things are getting crowded.

“If you like jobs, you have to like the people who fill those jobs,” Lewandowski said recalling Garner’s rebuttal.

Before taking over as state demographer from Jim Wescott in October 2004, Garner ran a data center for County Information Services at Colorado State University. As she took a break from cleaning out her office to do an interview, Garner commented on finding floppy disks and Zip drives, noting how far technology has come from the days when data books were printed out and information was transmitted by screeching phone modems.

The demography office’s staff has stayed constant at about half a dozen people, but they have doubled their productivity, with the getting 12,000 to 15,000 hits a month, eliminating a lot of phone calls, Garner said. Freeware and other affordable online tools have allowed her team to greatly boost their outreach despite tight state budgets.

Demographic trends tend to be like an ocean liner holding its course as economic storms rage and then calm. Not much has surprised Garner, in 20 years, except for one thing. Colorado’s fertility rate dropped sharply after the Great Recession and it has yet to recover.

At the peak in 2007, there were 70,700 births in the state. Last year, there were 62,165, despite the state having nearly 1 million more residents over that period. The shock of a housing crash and severe recession might have explained some of the initial declines, but births never fully recovered and the reverberations will carry forward for years to come.

Garner said a sharp decline in fertility among teenagers and young women offers the best explanation for the decline. More widespread contraception and more engaged parenting have helped lower the number of teen births. Women are having children at an older age and having fewer of them, reflecting a trend seen nationally.

The pandemic was also a surprise, pushing up the death rate temporarily. Deaths have moved back toward the long-term trendline and will continue to rise given the huge wave of aging baby boomers who moved to the state in the 1970s.

A majority of the state’s 64 counties already or will soon face “natural” decline, meaning deaths exceed births. By 2050, deaths will exceed births in Colorado, about 12 years after the country as a whole crosses that threshold. Only a handful of counties in the years ahead, places like Weld and Adams, won’t be completely dependent on migration to head off population declines.

One answer to natural decline would be to “import” more people to fill the gap, something Colorado has historically done a good job of since prospectors rushed into the state in search of gold and silver. Last year, however, Colorado ranked near the bottom for domestic net migration or people relocating from other U.S. states.

“The thing that has changed is not the ins, it’s the outs,” Garner said. Young adults are still moving to the state at close to the same volume, but more older adults are moving out.

The why isn’t entirely clear, although the big run-up in home prices might be allowing more retirees to cash out and move to a more affordable state. Others might be chasing their kids and grandkids or moving to a warmer climate. That same run-up in home prices is making it tougher for young adults to put down roots, but for now, they appear to be snapping up apartments, which are coming online at the highest rate since the 1970s.

The net migration Colorado has seen since the pandemic is a fraction of what it was last decade and has largely come from international sources. Political sentiment has swung strongly in the direction of limiting who can enter the country, with deportations expected next year.  But DeGroen noted during the summit that after 2040, only 15 years away, international migration will be the only source of population growth in the U.S. given current trends.

As the number of children born declines, there initially will be fewer students in schools, then fewer workers to fill jobs and then fewer couples having babies. About 40,000 Coloradans will retire each year over the next five years and millennials, now the state’s largest generation, will drive that number up even more when they head into retirement.

Colorado, which could take it for granted that people wanted to move here, will face intense competition to attract the dwindling number of young workers it has relied on so heavily across the decades.

Housing costs have been on a long and sometimes sharp climb throughout the state. In Colorado Springs, home prices , according to the Common Sense Institute. In the Denver area, the average sale price for homes this year , up from a decade ago.

Rising costs and housing shortages are driving a top concern among more than 7,000 respondents to the Voter Voices survey organized by more than two dozen media outlets in Colorado this year, including The Denver Post. Many identified the cost of living more broadly as a concern, but housing was a recurring topic.

The upward shift in housing costs has been driven by a long-running mismatch in supply and demand as Colorado has grown.

Those trends have hit renters hard, too. Denver’s median monthly rent increased an eye-watering 82% between 2009 and 2021, climbing from $856 a month to $1,554, one of the steepest increases in the country in that period.

If housing costs and development are top concerns for you, here is where your vote has the most impact.

The presidential race

Both candidates have offered ideas to lower housing costs. The president can harness regulatory authority for some moves, while working with Congress to pass larger-scale housing-related legislation, tax breaks and incentives.

The centerpiece of is a proposal to help first-time homebuyers with $25,000 in down payment assistance, although critics note that wouldn’t address the shortage of starter homes on the market. Among other proposals, she’s also pitching new tax incentives for builders who focus on affordable housing and wants to double an existing program that supports local governments to pursue “innovative” approaches to affordable housing, bringing funding to $40 billion.

Former President Donald Trump’s housing plan contains fewer specifics. In this campaign, Trump for higher housing costs and said that his plans for mass deportations will also help bring down rents — a contention economists have disputed, warning it would also likely cut significantly into the construction labor pool needed to build housing.

Trump also from the ground up on federal land. While the proposal is light on details, most undeveloped federal land is concentrated in Western states like Colorado.

Congressional races

Many of the housing proposals from the presidential candidates will actually depend on getting Congress to go along.

Colorado’s Republican and Democratic congressional candidates blame different causes — and propose different solutions — to the housing crisis. Republicans tend to blame federal spending for driving inflation, including in the housing sector, and argue for a reduction in that they argue drive up the cost of new homes. For their part, Democratic candidates lean into federal funding and tax incentives to support affordable housing construction.

In questionnaires published in its online voter guide, The Denver Post asked congressional candidates what actions they’d support to address concerns about the rising cost of living.

State legislative races

Housing has become a top issue for Colorado’s legislature in recent sessions, from passing property tax relief to efforts by Gov. Jared Polis and many Democratic lawmakers to add new zoning requirements for local governments, in hopes of spurring more density and lowering costs.

Legislative candidates in the election are debating those moves and ideas for further action — as well as limits to what government should do. The Post����ap legislative candidate questionnaires in the online voter guide include their responses about what the legislature should do to improve affordability for Coloradans.

Local Governments

Housing development policy, including zoning, is largely determined at the local level, and it’s an eternally hot topic for local elected officials. While many cities don’t have municipal races this year, several metro Denver counties have county commission seats on the ballot.

The Post’s candidate questionnaires in the online voter guide asked these candidates what they would do to improve affordability for their counties’ residents.

Ballot Measures

Voters in a number of Colorado communities will decide on housing-related ballot measures in this election. In Denver, Ballot Issue 2R asks voters to raise the sales tax rate to support affordable housing construction and programs, while Adams County , also a sales tax increase, for a similar purpose.

There is one statewide ballot measure related to housing, Amendment G, which would expand property tax breaks for veterans. Colorado voters did take a major step with affordable housing two years ago when they passed Proposition 123. That measure dedicates roughly $300 million a year to affordable housing efforts around the state.

“People, if they want to buy, realistically should buy right now,” said Weinstein, founder and CEO of Guide Real Estate.

The Fed lowered its rate last week to about 4.8% from 5.3%. Interest rates had reached their highest point in more than two decades as the central bank battled inflation, . As the central bank tightened its money policies to cool demand and rein in prices, inflation dropped, hitting 2.5% in August.

The cut of half a percentage point, larger than expected, could mean a bit of relief for people who’ve been paying higher interest rates on mortgages, car loans and credit card debt. The Fed has indicated it will further reduce the rate later this year with more reductions likely in 2025 and 2026.

A lower interest rate is a win for buyers because mortgages will likely become less expensive, Weinstein said. But he said people shouldn’t expect area home prices to drop for a few reasons, including that metro Denver is one of the most expensive markets in the country.

The median closing price in the Denver area at the end of August was $590,000, a 1.67% decline from July, according to a report by the or DMAR.

In addition, the metro area doesn’t have a lot of homes that are readily available and affordable, Weinstein said. Combine a limited supply with a likely surge in demand because of the interest rate cut, and the result could be higher prices, he added.

“Prices between January and April very likely could go up 6 to 7%,” Weinstein said.

A professor at Metropolitan State University of Denver has his own words of caution about the Fed’s attempted “soft landing” as it tries to balance stemming inflation with not stalling out the economy. Jeffrey Peshut said history shows that recessions follow when the Fed loosens its money policies after an extended period of restrictions.

“The fact that the Fed just lowered the federal funds rate by 50 basis points is one of the best signals we have that a recession is coming,” said Peshut, an assistant professor of finance and director of the real estate program.

High housing prices have helped fuel the inflation that led the Fed to start raising interest rates. For the time being, Weinstein doesn’t believe prices in the Denver area will fall because of the declining interest rates. DMAR reported that 10,724 homes were listed for sale at the end of August.

“We had the most inventory we’ve had since 2013,” Weinstein said. “Especially with interest rates where they were, that should have lowered prices in Colorado.”

Lower mortgage rates were “baked in” three to four weeks before the Fed’s decision because the market knew where things were going, Weinstein said. But home prices stayed relatively steady.

Weinstein believes the timing of the interest rate cut will temper the impact on house prices. The supply of homes on the market typically drops heading into October because people don’t want to be in the middle of selling their house during the holidays.

That means the interest rate cut will likely boost demand just as inventory starts decreasing.

“We’re already seeing more buyers starting to flood the market at a time when inventory starts to drop off,” Weinstein said. “I’m not suggesting that people should buy if they’re not comfortable, if the numbers don’t work. But if you can find a home right now, it would be more advantageous to buy now as opposed to when the inventory comes down.”

In the Denver area, labor shortages in construction are a factor in the state of the inventory, Weinstein said. Many builders left the market during the Great Recession and the area still hasn’t caught up, he said.

“And we didn’t build a lot of high-density condos because of our construction-defect law. Most major markets did,” Weinstein said.

Developers and real estate experts blame construction-related lawsuits by homeowners associations for a lack of condominiums. A 2017 law was an attempt to help spur more construction by requiring that more than half of the homeowners in a condominium complex agree to a lawsuit, but condo starts are still low in Colorado.

Even if Denver-area housing prices don’t budge much for now, Peshut with MSU said people should see mortgage rates decline. He said while federal funds rate and mortgage rates “don’t follow in lockstep,” the two are correlated.

However, an even larger impact could be looming, Peshut said. Based on history and an ongoing drop in full-time jobs, he believes the country will experience a recession.

“The times we have seen corrections in the housing market have been in response to big drops in employment,” Peshut said.

The unemployment was 4.2%, down from 4.3% in July.

But Peshut said shows that the number of full-time workers fell from 134,727,000  in November 2023 to 133,246,000 in August, a decrease in only 10 months of 1,481,000 full-time employees. He said history indicates that the Fed probably won’t be able to engineer a so-called soft landing and avoid a recession.

“It’s a hard landing or a crash landing,’ he said.