Rents fall in Colorado Springs for the first time since 2014

Apartments for rent Saturday, August 2, 2014, in Holland Park. Photo by Mark Reis

Colorado Springs apartment rents skyrocketed to another record high in the first quarter and there's no end in sight - a scenario that puts a spotlight on the community's need for more affordable housing, some experts say.

Young people who don't want to be tied to mortgages and retirees who prefer maintenance-free living are helping to drive the demand for apartment living. But construction isn't keeping pace, while a tight supply of single-family homes for sale has forced some renters to stay put and pay higher costs.

"With no houses for sale, with millennials wanting to rent, with all the fabulous amenities that are coming with it - millennials like walkable communities, so they want downtown - and then you couple that with baby boomers retiring, you've got an extreme demand and not near enough supply," said Laura Nelson, the Apartment Association of Southern Colorado's executive director.

The average rent for Springs-area apartments jumped to $1,060.84 a month in the first three months of the year, a $101.10 - or 10.5 percent - increase over the same period in 2016, according to a report this week by the Apartment Association and the Colorado Division of Housing.

Rents now have set record highs for eight consecutive quarters and have increased for 29 straight quarters on a year-over-year basis.

In addition to the strong demand, the number of apartments coming on line of late has been relatively small. The inventory increased by just 1,281 units over the last two years, the Housing Division and Apartment Association's report showed. This year, 367 apartments have been added.

Many apartments being built are demand driven, amenity-filled projects that command top dollar, which contributes to higher rents, Nelson said.

At the same time, the area has failed to embrace enough affordable or workforce projects with lower rents, she said. Case in point: Opposition in the southwest side, Broadmoor Bluffs neighborhood to a 60-unit project for low-income tenants.

The Ridge, proposed by nonprofit Greccio Housing of Colorado Springs and Wisconsin-based Commonwealth Development Corp., has been criticized by neighbors who fear it will hurt property values, among other concerns.

But that kind of unwarranted, not-in-my-backyard opposition hurts the community's ability to provide affordable housing, Nelson said.

"While the city wants more affordable housing, every time somebody goes to build one, the neighborhoods come out and have a big fit," she said. "Everybody wants it, but they don't want it in their neighborhood."

In general, the community understands and supports the need for more adequate and affordable housing for all incomes, said Lee Patke, Greccio Housing's executive director. In the case of The Ridge, many of its potential tenants work in nearby stores and restaurants or even at The Broadmoor hotel.

"When any particular neighborhood has a new development come along side it, it can be perceived as a threat," Patke said. "I think that's due to not understanding the clientele that we serve. It's really just the citizens of the community that are living and working in those neighborhoods already. It's not a new group of people that is being placed into a neighborhood. It's another opportunity for the citizens of our community to live near where they work."

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