Colorado Cities Seek to Address Housing Crisis With Modular Housing, STR Rules

Cities are incentivizing more affordable housing types and limiting permits for short-term rentals in an effort to keep housing affordable for residents.

1 minute read

May 30, 2024, 8:00 AM PDT

By Diana Ionescu @aworkoffiction


View of small town of Craig, Colorado with flat-topped mountain in background.

Craig, Colorado. | Jon Camrud / Adobe Stock

The modular housing industry continues to grow as the housing crisis forces creative solutions that combine safety and comfort with cost-effectiveness. 

In an article for Reasons to be Cheerful, Corey Buhay writes that the idea isn’t entirely new. “In the 1970s, the federal government dumped millions of dollars in subsidies into modular home factories across the US. But the subsidies couldn’t change the fact that the technology wasn’t good enough to make or move the homes efficiently.” Prefabricated homes also faced the stigma attached to ‘mobile homes’ and low-income residents.

Today, prefabricated homes can fit neatly into neighborhoods. In Colorado, locally produced prefab homes are starting to fill a growing housing gap. The Colorado manufacturer, Fading West, says it can produce a home at a cost 20 percent less than traditional housing. “The city of Boulder, Colorado, is in the middle of building a 31,375-square-foot modular housing factory that will produce manufactured homes for local residents starting in late 2024. Aurora, Colorado, also passed a resolution earlier this year to increase its use of modular housing.”

Other ways Colorado cities are addressing the housing crisis include limiting short-term rentals, controlling water rights based on affordable housing production, and creating community land trusts and affordable housing subsidies.

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