COLORADO SPRINGS, Colo. — The monthly cost to rent an apartment in Colorado Springs is slowly approaching the cost of rent in Denver.
“The chasm between our apartment lease rates and Denver’s used to be really big,” said Tatiana Bailey, the director of the economic forum at the University of Colorado Colorado Springs. “It’s not so big anymore.”
According to a study from the University of Denver, commissioned by the state division of housing, rents in Colorado Springs average $1,222, up from $1,140 at this time last year.
For rentals built between 2000 and 2009, rents average $1,401. The 2010 to 2019 average is $1,485. In the last quarter of 2018, the latest data available via the state, Denver’s apartment rates averaged $1,456.
“It’s a growing pain,” Bailey said. “It’s in some way a good problem to have in terms of good economic growth and vitality in the region. But the downside is it makes things less affordable for individuals who do move to the area.”
Bailey said Colorado’s growth is coming to Colorado Springs, meaning more people on the apartment hunt. She also said people who are typically at the age when they would by their first home are not doing so at a pace similar to years past, meaning they are still renting their homes.
“A lot of good studies have been done, and student debt has a lot to do with it,” Bailey said. “Student debt is about $36,000 for the average graduate in the United States. That’s a lot of money if you’re making payments on that, sometimes also with a car payment, how do you save for a down payment?”
Vacancy rates are lowering as well, meaning fewer apartments are available. In 2017, the vacancy rates in the city were at 7.4%. Now, the study reports it is 5.6%.
“I think we’ve been behind for quite some time,” said Laura Nelson, executive director for the Apartment Association of Southern Colorado. “We just simply can’t build fast enough.”
The report shows, 727 units have been added so far in 2019, bringing the total to more than 51,000 in a city of around 465,000.
“There are things that the City can do, and I bring it up every chance I get, that would help this, but we simply need more supply,” Nelson said.
She said the city could waive certain fees, use tax incentives, land grants and other things to remove cost barriers to more apartment development, and inspire builders to begin those kinds of projects.
“There’s not been any movement on any kind of incentives for people to build or to lower the cost of the building,” Nelson said.