How Colorado Springs is Tackling the Housing Shortage and Affordability Crisis

The affordability crisis in real estate isn't just about rising home prices—it's also about the critical shortage of housing units. This imbalance between supply and demand is a nationwide issue, but its impacts are felt acutely here in Colorado Springs.

According to a recent U.S. Census Bureau report, housing construction has not kept pace with the needs of growing populations across the country. A report from Realtor.com’s economic research team reveals a concerning projection: at the current pace of construction, it will take 7.5 years to close the housing supply gap.

The data is staggering. Across the U.S., we’re short 3.8 million housing units, falling behind the demand created by new household formations and pent-up need. While 2024 saw modest improvements, January 2025 data shows that while 1.48 million building permits were issued nationwide, only 1.37 million housing starts occurred—a 9.8% decline from the prior month. Although 1.65 million homes were completed, it’s still not enough to meet demand.

Locally, Colorado Springs is short approximately 10,000-12,000 housing units to meet current demand, contributing directly to rising home prices and rental rates. This shortage significantly affects affordability for both homebuyers and renters, particularly within lower-income and marginalized communities. 

What is Colorado Springs Doing About It?

Recognizing the urgency, Colorado Springs city officials are working to minimize red tape and streamline the building process for developers. The city has implemented measures such as:

• Expedited permitting processes to help builders break ground faster.
• Improved inter-departmental coordination to reduce project delays during zoning, inspections, and final approvals.
• Public-private partnerships to promote the construction of mixed-income housing, ensuring diverse price points.
• Revised land-use policies to allow for more density in appropriate areas while maintaining neighborhood character.

These proactive steps aim to alleviate the housing shortage, providing more homes at a wider range of price points for the growing Colorado Springs community.

As housing supply gradually catches up, prices may stabilize, helping to balance earnings with home costs. It’s crucial to note that building more inventory—both for-sale and rental—remains one of the most effective strategies to improve housing affordability for all.

✨ Whether you’re considering buying or renting, understanding the bigger picture can help you navigate this complex market. If you’re thinking about making a move in Colorado Springs, reach out anytime. I’m here to help you make informed, confident decisions about your next home!