Colorado Springs and El Paso County aren’t building enough homes that typical buyers can afford, while smaller houses and other types of housing options are sorely needed to make housing more attainable for many people, including young adults whose population will jump over the next few years and seniors who want to downsize.

Those are among the warning bells being sounded in a new “state of housing” report released Thursday by the Pikes Peak Housing Network, a nonprofit formed in 2023 that supports “innovative and collaborative solutions” to promote housing affordability, access and production in the Colorado Springs area. The group works under the umbrella of the Colorado Springs Chamber of Commerce & EDC. 

“While we are building housing in El Paso County, there’s a mismatch between the housing we’re building and the housing that we need for our community members,” said Jill Gaebler, the Housing Network’s executive director, who’s also a former development director of the nonprofit Greccio Housing affordable housing group and an ex-Colorado Springs city councilwoman.

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Some of the report’s conclusions, however, aren’t new; they echo concerns voiced by business people, civic leaders and elected officials in 2021, when they held a series of forums to call attention to the area’s housing issues.

At that time, Dirk Draper, the then-head of the Chamber & EDC, said spiking prices amid a shortage of homes had thrust the Colorado Springs area into a “housing crisis.” That crisis, he said, threatened employers who wouldn’t be able to find workers because of a lack of affordable homes and apartments, while new businesses would be scared off from expanding to the Springs for the same reasons. 

“We are in the midst of a housing crisis, and I would say that it’s worse than it was in 2021,” Gaebler said when asked about concerns raised four years ago.

“It’s probably largely why the Chamber & EDC wanted to host the Pikes Peak Housing Network in the chamber, because they recognize that their members, who are all the employers in our community, are telling them ‘we can’t find good employees … because they can’t afford to live here,'” she said. “And they also know employers who are considering Colorado Springs as their home are questioning whether they should come here because of the price of housing.”

The Housing Network’s report, a first for the group, drew conclusions from information collected from several government agencies and housing organizations. It makes the case that even as homes and apartments are being built in El Paso County, the new units are too pricey for many rank-and-file buyers and renters and might not be enough to meet current and future demand.

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Highlights of the report — which, among other sources, pulled data from the U.S. Census Bureau, the Colorado Demography Office, the Pikes Peak Regional Building Department, the Pikes Peak Association of Realtors, the Apartment Association of Southern Colorado, the suburban Denver-based Common Sense Institute research group and online housing services Zillow and Realtor.com — include:

• Colorado Springs and El Paso County will have an estimated inventory of 321,066 single-family homes, townhomes, duplexes, condominiums and apartments in 2025, and yet that number will fall 8,709 units short of an estimated need. That need is based on a Common Sense Institute formula that suggests communities should have an extra 10% of housing units beyond their existing supply to make sure buyers always have options.

• An estimated 34% of newly built homes on the market in January carried price tags of $700,000 and above, while another 30% of the homes were valued at $600,000. But the pool of buyers who could afford those homes — factoring in price, long-term mortgage rates that have more than doubled since 2022 to around 7% and rising homeowner insurance premiums — was relatively small. Just 24% of all El Paso County households could afford $600,000-and-up properties, while only 13% could afford those priced at $700,000 and higher.

• At El Paso County’s current median household income of $89,549 a year, an estimated 34% of local residents are “cost burdened,” meaning they spend more than 30% of their income on housing costs, which includes insurance and utilities.

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• The county’s population is forecast to climb to nearly 800,000 by 2029, and more than 11,320 of that gain during the next five years is expected to be young adults ages 18 to 24, which means there will be an increased need for housing that those first-time buyers can afford. Seniors ages 70 to 84, meanwhile will increase by more than 14,000, and many will want to move into smaller homes.

The Housing Network report doesn’t only raise worries about single-family homes.

Though nearly 5,000 apartments were added in the Colorado Springs area last year, building permits issued for multifamily projects fell by nearly two-thirds in 2024 when compared with 2023, Pikes Peak Regional Building Department figures show.

With a potential drop in apartment construction on the horizon, Gaebler said, fewer units might come onto the market in the next few years, which means vacancy rates could decline and rents could rise.

That’s especially troubling because the median age of first-time homebuyers soared to a record high of 38 last year, according to the National Association of Realtors’ 2024 Profile of Home Buyers and Sellers. In the 1980s, first-time buyers typically were in their late 20s, the Realtors group said.

if many people can’t buy a home until their 30s, there will be continued demand for apartments even as there’s a possible slowdown in multifamily construction in the years ahead, Gaebler said.

So, are there solutions to the lack of affordable homes? The Housing Network report points to a few.

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Colorado Springs and El Paso County need an influx of smaller homes, which will be less expensive for many buyers and more practical for seniors who would need fewer bedrooms as they downsize, the report suggests. “Affordable,” Gaebler added, doesn’t mean subsidized housing, but homes that households earning the county’s median income could afford.

That mix of smaller properties needs to include more duplexes, triplexes, modular housing and accessory dwelling units, the latter of which have been controversial in many cities because some existing homeowners oppose construction of the smaller units in their neighborhoods. 

One more big potential solution that’s been discussed for years in Colorado: the approval of construction defect reform legislation by the General Assembly, which supporters hope would lead to an increase in condominium building in the state.

For-sale condominiums can serve as a cheaper entry-level housing alternative for buyers, who otherwise can’t afford traditional single-family homes. The Housing Network report pegs the median price of local condominiums at $340,000, compared with the average home price of $549,346.

But, in general, developers and builders for years say they’ve avoided condominiums for fear of lawsuits brought by condo owners and their attorneys over alleged construction defects. 

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Last year, developers and builders took out permits for the construction of just 42 condos in El Paso County, according to Regional Building Department figures. In 2023, no permits were pulled for condo construction in the county.

“What percentage of our citizens are paying more than 30% of their income on rental housing?” Gaebler said. “It’s too much, it’s just too many people.

“So we need to have more housing that people can afford because we’re putting more people in the margin who, with one car repair, could be homeless,” she said. “And we need to do everything we can to prevent people from becoming homeless, in addition to ensuring our workforce has safe and affordable housing in which to live here in the Pikes Peak region.”