Denver’s Multifamily Rollercoaster: From Oversupply to a Severe Shortage

Right now, Denver is experiencing a temporary oversupply of multifamily units, with elevated vacancy rates and softening rents. But that relief won’t last long. By 2025, the market will flip as new supply dries up and demand outpaces deliveries.

Here's the outlook:
2025: ~7,500 units projected (down from the 9,000-10,000 average)
2026: ~5,000 units projected
2027: Even fewer

Even more concerning—construction starts are down by 50%, meaning the development pipeline is collapsing. We can’t approve projects or build fast enough to make up the difference.

What does this mean?

• The current oversupply will burn off by late 2025

• Rents will rebound sharply as demand outstrips supply

• Affordability pressures will return—likely worse than before

How do we prevent a long-term crisis?
Streamline approvals so projects can break ground faster
Incentivize new development with tax abatements & public-private partnerships
Push for zoning reforms that allow higher density & mixed-use projects
Attract capital back to multifamily with creative financing structures