COLORADO SPRINGS, Colo. (KOAA) — A new report from the Pikes Peak Housing Network (PPHN) shows some positive signs in the local housing market, but leaders warn a growing gap between affordable and market-rate housing is becoming a "ticking time bomb."
A report released Thursday evening at a local event shows Colorado Springs is making some progress on housing, but significant challenges remain, particularly for a growing group of residents who fall between affordable housing qualifications and market-rate options.
The report, distributed by PPHN, pointed to several encouraging signs in the local housing market.
"Rents are starting to soften a little bit. Interest rates for homeowners are below 6% for the first time in years. We still have high need and a disproportionate need to the affordable housing units for people making very low incomes," said Lee Patke.
Housing permit approvals are up, and more than three times the number of multifamily units were approved last year than in 2024.
"I think what we see a lot of hope for in our community is our capacity to respond to the issue," said Patke.
The report also showed people are choosing to rent instead of buy. The gap between the median income and the price of homes has stayed high, but that gap may be closing.
Still, leaders are sounding the alarm about what is being called the "missing middle," a growing group of residents who make too much to qualify for affordable housing, but not enough to afford many other housing options.
Toby Gannett, CEO of Draper Commons, a 500-unit affordable housing complex being built in Downtown Colorado Springs, described the situation in stark terms.
"The gap between our most affordable units and our market rates is becoming a chasm. It's becoming a ticking time bomb for our community," said Gannett.
Gannett, a longtime Colorado Springs resident, said the missing middle makes up 58% of people who live in the city. He described the range of workers affected.
"It would be an entry level teacher up to a vice principal. An E1 in the military through a junior officer. A CNA through an RN in our community. That's where the critical gap is emerging," said Gannett.
If those workers cannot afford to live in Colorado Springs, Gannett warned, they will be forced to move further away from the city.
Both Gannett and PPHN Board Chair Patke said adding more density, building up rather than out, could be a way to expand housing options while keeping prices down.
"That's my personal opinion. I love Colorado and the mountains and the green space. I'd much rather see us develop within our existing community boundaries," said Patke.
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