Colorado Springs is behind on housing by roughly 30,000 dwelling units–meaning apartments, condos, homes and more — according to a new assessment. That shortage, the assessment reported, is contributing to the high cost of housing in Colorado Springs, homelessness, and housing instability.
The shortage dates back to decades of underbuilding, especially in the aftermath of the Great Recession, according to the report.
The 314-page assessment is part of a multistep housing initiative required by a new state law.
Housing is one of the top concerns of residents right now, said Aimee Cox, Chief Housing and Homelessness Officer for the city, told councilors in a presentation earlier this week.
“I will tell you that there is no room that I walk in where housing is not a concern in the conversation,” Cox said. “Parents concerned about what's going to happen to their children, businesses concerned about where people are going to live, how are we going to recruit employees to our community?”
But she said the region's seniors, single-person households, and low-income residents face the greatest challenges in the market today.
Low housing, high rent
Economist Tatiana Bailey worked on the report and was one of the presenters at the council session. She said Colorado Springs is growing faster on average than the state and the nation. To meet the city's population needs, she said, developers would have needed permits for around 8,500 new single-family homes per year between 2006 and 2024. Instead, Bailey said around 3,000 homes were built each year.
“(There are) about 5,500 permits of being underbuilt,” Bailey said. “That is a significant issue.”
She said those years of underbuilding have dramatically affected the housing supply.
“Lower supply means higher prices. Now prices are high not only because of that, but also because the cost of building is so high. Insurance costs are high. So it all stacks,” Bailey said.
James McMurray works with Matrix Design Group, which also helped with the housing needs assessment. He said housing costs rose nearly 40 percent between 2018 and 2023.
“Household incomes are going up nicely as well, but not by 40 percent. We're talking more like 12 percent,” McMurray said. “And that's a lot of what's driving that affordability gap.”
The average household income and the average rent or mortgage don't match up either.
The assessment showed the median income for a renter in the Springs is around $58,000 per year, but to afford an average rental unit, an individual renter would need to make around $80,000 per year. For home ownership, the difference is steeper. A household currently would need to earn over $150,000 a year to afford an average-priced home in Colorado Springs.
“Home ownership is becoming increasingly out of reach for people trying to enter the market,” McMurray said. “So as that housing cost continues to outpace income growth, we're going to continue to see that challenge for people coming into the community, and people that have grown up here and trying to find a place to live.”
And all that is making it harder for young people to stay in Colorado, Bailey said, which plays a role in companies wanting to stay and invest in the region.
“I always say demographics is destiny,” she said.
High cost of living adds to housing instability
Data from multiple sources, including the Supplemental Nutrition Assistance Program (SNAP), federal programs for school-age children, and yearly counts, reveal the region has around 8,500 individuals experiencing homelessness, with more people living on the edge.
In Colorado Springs, roughly 4,000 individuals are at a high risk of becoming homeless due to severe housing cost burdens and low incomes, according to the report.
“When you look at some other communities where housing costs have gone up, you see an increase in homelessness,” Bailey said.
What next?
Cox, the city's Chief Housing and Homelessness Response Officer, said this report is an important step in making the region more affordable and livable.
“Were trying to bring data so we can define a problem, so we can solve if for our community,” Cox said.
Next, she said the report's working group will hold another round of public engagement with stakeholders like developers, advocates for people experiencing homelessness and others, as well as the community and then come up with a plan to address issues related to demand and affordability.
“Housing demand has outpaced housing supply, and this shortage affects residents across all income levels, limiting housing choice for everyone, especially families, seniors, and low-wage workers,” Cox said. “Fortunately, these numbers also point us toward potential solutions.”
A number of city councilors at the work session pointed to a disconnect between the data and possible solutions. While many residents share a common goal of wanting the community to be affordable, the possible solutions, like increasing construction and density, have been unpopular among residents in the past.
“NIMBY-ism,” said councilor David Leinweber. “That's really a lot of what it comes down to. You either physically don't want more housing close to you or you don't want your home values to come down.”
Leinweber proposed adding more community education and messaging to the eventual plan.
