The local four-year university is racing to build dorms as fast as it can to catch up with demand.

Construction on new housing for another 515 students to live on campus is ready to start at UCCS, following a groundbreaking ceremony Friday.

The $74.5 million expansion will create suite-style units with one, two, three and four bedrooms, as well as a new dining complex and academic spaces.

The project comes as two additional housing towers for freshmen students opened last fall, in time for the current school year.

Called Village at Alpine Valley, the new development will be built on a former parking lot on the west side of the campus, near the current Alpine Village student housing.

The units will take two years to complete, said UCCS spokesman Tom Hutton. Space for 292 students will open in August 2015, along with the new dining hall and additional areas for academic programs. A second phase, scheduled to open in August 2016, will include living quarters for an additional 223 students.

When the new dorms are finished, UCCS will have space for 1,640 students to live on campus.

Housing operates as an auxiliary enterprise of the university, Hutton said, and rent from students who live in the development will repay the bonds used to fund the project.

Identified as one of the fastest growing college campuses in Colorado, UCCS has had an increasingly difficult time keeping up with demand for on-campus living since it transformed from solely a commuter campus to a traditional-style university. The first dorms opened in 1997.

This academic year, the school turned away at least 300 potential incoming freshmen due to a lack of on-campus dorm rooms. Last school year, about 70 students couldn't get on-campus housing, and in 2011, 90 were left on a waiting list as school began.

Last August, the school opened an $18 million expansion that added 192 freshmen beds to its Summit Village complex, for a total of 824.

Another dorm unit, Alpine Village, has more than 300 residential on-campus beds.

UCCS also leases a complex of 148 apartments for students to live in off campus, on North Nevada Avenue.

About 20 university leaders, students and construction representatives dug a few inches into the former Parking Lot 9 at the school Friday morning to kick off the Village at Alpine Valley. Leading the shovel brigade were Chancellor Pam Zalabak-Shockley and CU Regent Kyle Hybl of Colorado Springs.