(The Center Square) – Colorado’s electrification goals could add up to $68.4 billion in total costs over the next decade, a new report says.

The state's electrification goals could negatively impact housing affordability at a time when housing shortage is likely to increase, according to the report published Tuesday by the Common Sense Institute (CSI), a free-enterprise think tank.

CSI's report analyzed the potential economic impacts of two new state laws focused on increasing innovative housing options and reducing greenhouse gas emissions. 

“Housing affordability remains a top issue facing Coloradans,” said Evelyn Lim, a research fellow with CSI who authored the report. “With rising inflation, supply chain disruptions, workforce shortages, and complex land-use regulations, the outlook for housing development in the state looks bleak.”

The two bills CSI analyzed were House Bill 22-1282, which created a grant program to incentivize "innovative" housing development, and House Bill 22-1326, which creates new building codes for green energy. 

Lim called HB 1282 "promising" but said HB 1326 creates “additional barriers to development” that could send Colorado’s housing prices even higher. 

"Due to continuing supply issues, policymakers should focus on policies that will incentivize and create more housing – such as the recently passed HB22-1282 which created an innovative housing incentive program," Lim wrote. "Yet as laudable as that program can be, the legislature also passed legislation that will make it harder, and more expensive, to build new housing units."

New building codes under HB 1326 align with the state's overall goal of reducing greenhouse gas emission from buildings by 90% by 2050, the report noted. 

However, Lim described full electrification of the buildings as an “ambitious target,” citing concerns about unintended consequences like higher costs. 

CSI estimated the state has a housing deficit of over 195,000 homes, and that deficit could grow to more than 514,000 by 2031. Adopting new stricter energy codes could increase the cost of constructing new homes by between $6,450 and $22,352 per new home, according to data cited in the report.  

The energy codes could also increase utility and infrastructure costs for businesses and homeowners, the report said. Overall, the report estimated that cost to be between $36,000 to $42,000 per existing house, or $59.1 billion to $68.4 billion in statewide costs. 

Instead of focusing only on green solutions, Lim said state lawmakers need to take a broader approach to solving the state’s affordable housing challenges. 

“Housing policy in Colorado should focus on fostering an environment that enables more affordable, workforce, and market rate development,” Lim said.