The challenges presented by a lack of affordable housing, along with the continued commercial development downtown and to the north, dominated area real estate news in 2018.
The Colorado Springs housing market is predicted to be the hottest in the nation next year, according to Realtor.com.
Median house prices across Colorado, including in Colorado Springs, continued to rise steadily throughout the year due to reduced inventory, an uptick in interest rates and the growing median income of potential buyers.
This fall, the Housing Affordability Index across Colorado hit its lowest point since the Colorado Association of Realtors started the measurement in January 2010, according to a November press release from the organization.
The index measures how affordable a region’s housing market is to buyers, and is calculated using interest rates, median sales price and median income by county.
Affordability was down 18 percent from last year for single-family homes and 20 percent for condos/townhomes when looking at the seven-county Denver metro area and statewide, the release said.
Multiple events (hosted by various organizations including the Housing & Building Association of Colorado Springs and the Business Journal) revealed there are “no quick or easy” solutions to the affordable housing problem.
Marla Novak, the director of government affairs for the HBA of Colorado Springs, said earlier this year the organization was working with Colorado Springs Utilities to overcome several barriers that may help lower building costs in the Springs, such as high tap fees.
Additionally, the association continues to grow its Careers in Construction Program to address the lack of new construction workers entering the workforce, which also is affecting the cost and production of homes, she said.
Each year, the city of Colorado Springs receives about $4 million in Housing and Urban Development funds, according to Steve Posey, the Department of Housing and Urban Development director for Colorado Springs. He said just over $1 million of that is designated for the development and preservation of affordable housing.
“Typically, the city uses these funds to leverage private investment in the form of tax credits that are used to build affordable housing,” he said. “Even though it may seem like the pace is slow, there is a lot of activity under way. By the end of 2019, the city expects to see 800-plus units placed in service, including over 250 units specifically for seniors and the disabled.”
Downtown development endless?
Downtown Colorado Springs experienced an increase in development this year, including new apartment buildings breaking ground and a variety of restaurants moving in.
Darsey Nicklasson of DHN Planning and Development, the co-developer of Blue Dot Place apartments, broke ground in March on a multi-use building called Casa Mundi Lofts at 418 S. Tejon St. The project consists of two or three restaurant/retail spaces for lease on the first floor, plus 27 apartments.
Nor’wood Development Group and Griffis/Blessing Inc. teamed to build two downtown apartment buildings, including the 169-unit 333 ECO Apartments building on the corner of Wahsatch and Colorado avenues, and a 187-unit apartment building on the corner of Cascade Avenue and Rio Grande Street.
Sarah Humbargar, vice president of development services for Downtown Partnership of Colorado Springs, said restaurants that opened downtown in 2018 included: Frozen Gold Ice Cream, Dos Santos and Cork & Cask, which are all in the Winfield Scott Building on South Tejon.
Drew Shader, owner of Denver-based Atomic Provisions, also brought his concept of three separate operations under one roof — Denver Biscuit Company, Fat Sully’s and Atomic Cowboy — to South Tejon Street.
“There’s also Hafa Adai, which is a Guam-style barbecue restaurant in the former Seeds Café space off Pikes Peak Avenue,” Humbargar said.
THE Road up north
Real estate development in northern Colorado Springs occurred at a record pace this year.
“We continue to see large growth in all sectors of development — single family, multifamily and commercial,” Catherine Carleo, principal planner for the city of Colorado Springs, told the Business Journal in February.
Residential construction moved faster north of Woodmen Road due to vacant land available for development, she said.
With more families moving up north, “retailers want to follow those rooftops,” Bob Cope, Colorado Springs’ economic development officer, said in February.
Commercial development happened in three major areas: Polaris Point at Northgate and Interstate 25; Interquest Marketplace; and Victory Ridge at Interquest and Voyager parkways.
Westside Investment Partners’ Victory Ridge gained an anchor tenant: In-N-Out Burger, which plans a distribution center and office building on a 22.4-acre parcel.
In May, Burlington, the discount retailer formerly known as Burlington Coat Factory, said it was adding a store in the Powers Boulevard retail corridor. That same month Duluth Trading Company announced plans for a new store at University Village Colorado, northwest of Nevada Avenue and Garden of the Gods Road.
Then in October, SCHEELS, an employee-owned, all-sports retailer, announced plans to build a 222,000-square-foot building at Interquest Marketplace near Great Wolf Lodge, according to a company press release.
Cope believes the north’s growth pattern will continue in the future, with quality residential development attracting new families and new rooftops attracting more commercial development.