It’s an old joke in Colorado: Boulder is 16 square miles surrounded by reality. Not so original, but it makes a lot of sense when you look at the city’s apartment market. The truth is that Boulder really is isolated from the rest of the region.

“The city of Boulder bought the rural land around it to create a buffer,” said Cary Bruteig, president of Denverbased Apartment Appraisers & Consultants, Inc., an apartment consulting and research firm. “[The land] is basically a boundary all the way around the city that you can’t build on, except for maybe one house every 25 or 35 acres. It’s like a doughnut they created, with the city in the middle of it.”

The buffer land is mostly just open space and farmland. “The county of Boulder restricts development too,” said Bruteig. “Once you get outside that buffer, you can’t build any kind of real density.”

Boulder ranked sixth in our analysis. It’s tough to make headway in this expensive market with its arduous approval process for new housing. Building apartments on Mars sounds like a better idea.

But there’s hope. The city loosened its permit restrictions for both singlefamily and multifamily development when officials realized that encouraging commercial development caused nightmare congestion problems.

According to the Denver Regional Council of Governments, one housing unit exists for every two jobs in Boulder. This is placing a high demand on existing housing. With these dynamics at work, apartment investors should give Boulder proper some serious study.