The city of Colorado Springs plans to issue up to $40 million in private activity bonds to build more than 200 new affordable rental housing units on the city’s north side, officials told the City Council during a work session Monday.

The Royal Pines Apartments, as they are currently known, will include 232 one-, two- and three-bedroom units. The project is planned at the intersection of North Powers and North Union boulevards and will be marketed toward working families, the city’s Community Development Division Manager Steve Posey said.

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Eighty units each are planned to be built in two four-story buildings across from each other, with another 72 units planned to be built in an adjacent four-story building, a staff presentation shows. 

Councilmembers generally lauded the project Monday, saying it furthered local efforts to build more affordable housing across the city.

The developer, DBG Properties of Portland, Oregon, is proposing to use “income averaging” to provide a number of “very low-income units” offset by other affordable units priced closer to citywide market rent rates, Posey said.

The developer specializes in affordable housing projects and built the Academy Heights apartments northwest of Fountain and North Academy Loop.

Market rents have increased “substantially over the last year” in northern Colorado Springs, Posey said. One-bedroom apartments in the area are renting for $1,564 a month, two-bedroom units for $1,840 a month and three-bedroom units for $2,204 a month – between about $300 and $400 more than rents citywide, according to a staff presentation.

One-bedroom apartments in the Royal Pines Apartments project would rent for about $1,115 a month, two-bedroom units for about $1,336 a month and three-bedroom units for around $1,539 a month, Posey said. 

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The city plans to allot most of the approximately $29.2 million in private activity bonds it will get from the state this year to pay for the project, and will use some remaining bond money leftover from 2022 to finance it, Posey said.

“That’s an indication we are doing a very good job of getting these funds into the community where they need to be,” he said.

The process allows Colorado Springs to act as a “conduit issuer” of the bonds, Posey told the council, “simply to provide some tax advantages to the developer.”

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The city can still receive additional bonds at the state level to build other affordable housing projects this year, he said.

The City Council expects to consider a resolution declaring the city’s intention to issue the bonds at its regular meeting June 13.

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