A ballot measure to cap home and apartment construction along Colorado’s Front Range is undergoing a formal state review, setting off alarm bells with real estate agents and homebuilders.

“This will bring our economy to a halt. You don’t bring affordability to a market by reducing supply,” Scott Thorson, the chief operating officer at Oakwood Homes, said at the Colorado Association of Realtors’ Economic Summit on Wednesday in Denver.

Ballot initiative No. 66, which is awaiting a review from the Colorado Supreme Court, would limit permits for homes and apartments to 1 percent of the existing housing stock in 2019 and 2020 in Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, El Paso, Jefferson, Larimer and Weld counties.

After two years, the caps would remain in place unless 5 percent of the voters in a jurisdiction put a successful initiative to a vote. Denver, Douglas and Weld counties, which have seen new construction rates above 2 percent, could face some of the most severe reductions under the measure.

Matthew Leprino, a broker-owner of Leprino Homes in Denver, said the measure, if passed, would have devastating consequences in an already constrained market. He urged the crowd of mostly real estate agents to join CAR in opposition.

“Support the fight against it,” he said.

A housing study from Shift Research Labs estimates that metro Denver faces a shortfall this year of about 32,000 homes and apartments due to inadequate construction.

That shortage is driving up homes prices and apartment rents above income gains, fueling inflation and straining finances. Households making under $50,000 a year are collectively spending $2 billion more a year than if supply and demand had stayed in balance, the study estimates.

Builders at Wednesday’s summit said communities need to be looking for ways to make it easier to add lower-cost housing, such as permitting higher density development and reducing impact fees.

But concerns over overcrowding due to population growth also are on the rise. A measure in Lakewood to limit new construction to 1 percent of the housing stock gained enough signatures this summer to make the ballot there before running into legal challenges.

Thorson said while the days of being able to build a new single-family home for under $200,000 are long gone, Oakwood Homes is making a concerted push to bring its average price point under $350,000. Last year, it got it to $365,000.

If the caps were approved, the Front Range would see 26,050 fewer homes and apartments constructed over the two-year period, representing a loss of $7.8 billion in activity and a 10 percent reduction in construction employment, according to an analysis by Chris Brown, director of policy and research with Colorado REMI Partnership, submitted to the Colorado Legislative Council.

Brown said REMI studied the Lakewood limits, but whatever growth might have been blocked there could shift to other cities. If the entire Front Range is limited, that would restrict housing supply in the region seeing almost all of the state’s population growth and push that growth outward.

Daniel Hayes, who is with the Denver Futures Committee, and Wheat Ridge resident Julianne Paige are behind the initiative.

Hayes was behind Golden’s growth limitation measures passed in mid-1990s. Efforts to reach him and Paige before deadline were unsuccessful.