COLORADO SPRINGS, Colo. (KRDO) -- The city's white-hot housing market has been great for its economy, but that appears to be changing.
The City Council this week expressed concern that steadily-rising home prices are starting to discourage some employers -- and maybe even some families -- from moving here.
According to the city's 2020 financial report released Monday, the average price of a single family home jumped 20% in the past year, to $437,000, while the average price of a condominium or townhome increased 18% to $295,000.
"But you can almost throw affordability out the window because the demand is so high," Jeff Greene, the mayor's chief of staff, told the council during Monday's work session.
"We can't build enough houses to meet the demand," he said. "People are paying from $30,000 to $50,000 above the listed price for a home. This can't continue. We need to do something soon."
Councilman David Geislinger said that providing more affordable and available housing is the top objective of the city's Chamber of Commerce and Economic Development Corporation.
"It's nice to have companies wanting to move here but it's hard for their employees to find places to live," he said.
Officials said that the rise in home prices is driven by high demand, low supply and significant costs increases in lumber, steel, concrete and other building materials.
"The situation has a lot of moving parts that we're trying to bring together," said Richard Skorman, council president. "Maybe we can reduce the fees that we charge builders. Maybe we can give them land to help reduce costs. We're looking at everything."
Renee Zentz, CEO of the Housing and building association of Colorado Springs, supports lowering fees.
"There's an estimate that for every house, at least $80,000 is federal, state and local fees," she said. "The faster we can process zoning and entitlement, then we're able to put houses on the ground faster -- which costs less in the long run because we don't have money tied up."
The city received more federal funding in 2020 and 2021 for affordable housing projects, but that's only a drop in the bucket of what's needed.
"I see the market remaining like this for a while," Zentz said. "We need more housing -- all types of housing."