A fee rebate program Colorado Springs officials implemented in 2022 has helped the city make strides in its efforts to offer more affordable and more energy efficient housing for its lowest-earning residents, Colorado Springs community development officials said Wednesday.

Since the city and Colorado Springs Utilities began offering the joint program it has, in the last year, offset about $395,000 out of a total $1.5 million in utilities fees for six affordable housing projects, said Katie Sunderlin, the city’s senior affordable housing coordinator. In 2023, the program is projected to offset $477,000 out of an expected total of $731,000 in utilities fees for at least five more affordable housing projects in town, she said.

Colorado Springs fee rebate program to encourage more affordable housing

The rebates are financed through $2 million Colorado Springs Utilities sets aside annually to support affordable housing projects.

So far, about 1,200 affordable housing projects already under construction or in the design phases will be built through the program, according to a staff presentation.

The program scores housing projects and rewards them based on various criteria, such as how many units in a project are designated for those who need them most based on income, how long those projects will be affordable, the number of accessible units in a project, how energy efficient the units are and others.

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Through the program, the city has “increased the number of fully accessible units and energy efficient buildings tenfold,” Sunderlin said. “Hands down, we are getting more efficient buildings over and over and over again.”

She told the Colorado Springs Utilities board, which is also the City Council, that all affordable housing builders in town are using the rebate program, and about half of them are based in Colorado.

Community Development Division Manager Steve Posey said last year when the program was first proposed that while the rebates are small compared to the overall cost of housing projects, it helps them secure financing through the state.

It was especially helpful over the last year in helping developers bridge funding gaps, Sunderlin said, as interest rates and construction costs soared. 

“It truly is helping,” she said.

To date, the fee rebate program has helped build large affordable housing projects like Interquest Ridge, a 240-unit apartment complex being built at the far north end of the city, and Copper Rose, a 182-unit project under construction near Powers and Tutt boulevards.

Both projects are in areas of the city where rents can be high, Sunderlin said.

“Two-hundred-and-forty units is a lot of affordable units in an area of town that is incredibly expensive for rent,” she said of the Interquest Ridge project. 

Other projects participating in the rebate program are located generally across the southern portion of the city, a staff presentation shows.

Colorado Springs Utilities board members on Wednesday generally praised the program.

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“What we need is housing for our workforce, housing for our community. When you look at surveys of what is of most concern to folks in this community, the affordability of housing is one of those,” Utilities Board Chairman Wayne Williams said. “I think this is a step in that direction.”

Utilities Board Member Dave Donelson said he didn’t object to the program but felt the affordable housing projects that have opted into it would have been built with or without the program.

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“I don’t object to the program. I object to Colorado Springs Utilities ratepayers being the ones to fund it,” he said. “I would ask our CEO if we have maintenance projects in Colorado Springs Utilities that can be assisted with $2 million annually. I’m sure we do.”

Colorado Springs Utilities CEO Travas Deal said he agreed with Donelson but felt Utilities was compelled to support affordable housing projects through the rebate program. Utilities, like other businesses, is facing a workforce shortage and more affordable housing can help attract more workers, he said.

“Even though we can find ways to spend $2 million differently, I do believe we have some obligations to support programs like this,” Deal said.