Let’s face it: housing in Denver is a mess. Prices have soared to astronomical heights, and we’re short up to 18,900 homes. Despite the city’s well-intentioned efforts, including generous contributions from Denver taxpayers, things aren’t getting any better. But here’s the kicker: What if the very policies we’ve been championing to solve the housing crisis are actually making it worse?

That’s exactly what our report “Unlocking Housing Affordability in Denver: Is Inclusionary Zoning Solving or Perpetuating the Problem?,” suggests. The findings cut against the grain of traditional affordable-housing thinking. They also confront the broken narrative that market-rate housing is bad and only affordable housing is good. The truth is, we need it all — market-rate housing, affordable housing, and everything in between. The city’s current strategy, unfortunately, isn’t working.

Denver’s 2022 inclusionary housing ordinance, Expanding Housing Affordability (EHA), was supposed to be a game-changer. The idea? A form of an inclusionary housing ordinance that requires developers to include affordable units in new housing projects, or charge them a fee to fund more affordable housing elsewhere. Sounds great, right? Except it hasn’t been. Our findings show that since the EHA took effect, Denver has seen a 31% drop in housing permits, while neighboring Aurora — without this ordinance — has enjoyed an 18% increase in housing permits.

In fact, Aurora, a city just under half the size of Denver, has been issuing more housing permits than Denver, and it’s not just Aurora — other cities, like Boise and Salt Lake City, without these kinds of mandatory inclusionary zoning laws are experiencing fewer obstacles to getting homes built.

Denver’s policies are creating hurdles for homebuilders, driving up costs, and causing delays. A typical 250-unit multifamily project in Denver now has to raise rents by about $80 a month, or nearly $1,000 a year per unit, just to achieve the same returns a homebuilder would see in Aurora. And while we’re busy debating whether market-rate housing is bad, that cost increase acts as a hidden tax on all Denver renters and homelessness proliferates. Not exactly a win for affordability.

For too long, we’ve been stuck in this binary mindset that market-rate housing is the villain, and thus should be taxed to pay for affordable housing, then act surprised when both types of housing are rare and expensive. We require market-rate housing just as much as affordable housing because, without both, the system collapses. You can’t expect to solve a supply issue by penalizing the people trying to add to that supply.

Before we point fingers, let’s be clear: Denver’s leadership is working hard. The intentions behind EHA were noble — after all, we all want to create inclusive communities. But good intentions don’t always translate into effective policies.

We need to rethink the way we approach housing policy. Rather than viewing market-rate housing as the enemy, we should embrace it as part of the solution. Every home built increases the overall supply and helps ease the pressure on prices.

We also need to streamline Denver’s tortuously long permit process. As it stands, it takes an average of 206 — 300 days to get a major multifamily project approved in Denver. That’s six to 10 months of delays, adding about 1% in cost per home for every month of stagnation. Compare that to cities like San Diego, which fast-tracked affordable housing permits in as little as nine days. If they can do it, why can’t we?

The debate around housing affordability isn’t just a Denver issue — it’s a national one. Cities across the country are grappling with how to house their growing populations. But Denver’s struggles are particularly glaring because while other cities are busy doing the arduous work of increasing their zoned capacity, Denver has taken a different tack — focusing on policies like EHA and asking Denverites to tax themselves once again to raise $100M more this November.

It’s time to acknowledge that what we’ve been doing isn’t working. We need more housing of all types, and we need to stop demonizing gentle density—the most affordable types of homes like duplexes and triplexes—and relegating them to just 23% of our land. This exclusionary zoning strategy pushes those who need affordable homes into less connected parts of the city, on high-frequency arterials, with schools at risk of closure and a lack of healthy food options, further deepening inequality.

If we truly care about affordable housing, then it’s time to recognize that we can’t fix this crisis by sticking with the same outdated playbook. The future of housing affordability lies in building for abundance — embracing gentle density and welcoming a variety of housing types into all our neighborhoods, not just a fraction of them. It’s a mutually beneficial solution: affordable housing homebuilders, market-rate homebuilders, and the residents of Denver all stand to gain.

This isn’t a radical idea — cities like Fort Collins, Austin, Minneapolis, and states like Montana have faced down resistance to upzoning and emerged stronger for it. Denver must now get in the game, or we’ll be stuck in the same cycle of unmet demand, rising costs, increasing homelessness, and frustrated residents. The clock is ticking, and Denverites can’t afford to wait.

Peter Lifari is the Common Sense Institute Housing Fellow and CEO of Maiker Housing Partners.