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New homes are seen under construction near the Montaine community on Oct. 17, 2022, in Castle Rock. (Olivia Sun, The Colorado Sun via Report for America)

Growth is good. But hold the sod. And have the checkbook handy. 

Colorado’s population growth and the swelling stress on state water resources amid climate change and drought are sending Front Range suburbs in a scramble to shore up sustainable supplies. 

Castle Rock is banning traditional grass turf in front yards of new homes and offering developers steep fee discounts for water-saving “Coloradoscaping” yards. The Douglas County town that is a center for housing sprawl in Colorado foresees dwindling aquifer resources and ever-higher prices to secure new surface water from the state’s overtaxed mountain river basins. 

Arvada, on the opposite corner of the Denver metro area to the northwest, is more than doubling homebuilders’ water and sewer connection fees and sharply raising existing homeowners’ utility rates. The city has so far avoided turf bans or other strong conservation measures on development, while a debate builds on whether the its new $54,000 connection fees are making homes even less affordable. 

The two cities’ big moves, combined with Aurora’s recent decision to restrict new lawns and ban new golf courses, reflect the strains on high-growth Colorado cities confronted by higher water prices and dwindling supply, older collection and treatment systems hitting capacity, and everyday inflation. Arvada says it is paying 30% more for water treatment chemicals, and triple for piping, amid worldwide price increases.

New homes are seen under construction near the Montaine community Oct. 17, 2022, in Castle Rock. (Olivia Sun, The Colorado Sun via Report for America)

“Water is a critical resource here,” Castle Rock Water Director Mark Marlowe said. “These are the things we can do to make that resource go further.” 

“We are at capacity, and parts of our system are full in places that we expect that growth is going to pay for itself,” said Sharon Israel, Arvada’s director of utilities.

Aurora sent water messages loud and clear over the summer by moving to ban new golf courses and sharply limit the amount of traditional thirsty lawn grass installed in the yards of new homes. 

Now comes fast-growing Castle Rock, which Tuesday night was expected to give final passage to a ban on front yard grass in new homes and a limit on backyard grass to 500 square feet. The new rules also demand that developers oversee all water-wise landscaping if they want to qualify for discounts off steep tap fees. 

City water agencies are ramping up those tap fees charged to developers to link to local water systems to pay for higher water acquisition and distribution costs amid the historic Western drought. The tap fees have risen so high that homebuilders are arguing — out of self-interest, but also reflecting concerns of town officials — that water fees are a major contributor to the lack of affordable housing on the Front Range. 

Castle Rock’s utility system fees for a newly built single-family home in 2023 will be $42,097, up from $37,067 this year. Developers who agree to oversee landscape installation themselves using certified conservation contractors can trim more than $16,000 from that total under the new rules, officials said. 

Arvada’s vote Monday night boosted charges for water, sewer and stormwater connections that it calls “system development fees” to $54,000, more than double the previous $25,000 fee, according to city officials and the Home Builders Association of Metro Denver. 

Builders know water conservation is crucial now more than ever, and agree with the gist of the Aurora and Castle Rock initiatives, HBA’s Morgan Cullen said. They did seek concessions, not wanting to be responsible for overseeing all the landscaping. 

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But the rapid increase in new home tap fees, in Arvada and to a lesser extent in places like Castle Rock, is exacerbating crushing affordability problems for new buyers, Cullen said. “Water is getting prohibitively expensive,” he said. At current median home prices, the rising tap, storm and wastewater fees represent about 10% of the overall price, he noted. 

The stress on water resources and homebuyer resources will only worsen. Castle Rock expects to grow from 81,000 people to 140,000 in the next couple of decades. The city wants to cut per capita water use by 18% in the next 10 to 20 years, Marlowe said. 

Castle Rock gets its drinking water from a combination of withdrawals from aquifers under Douglas County, which are depleting and can’t continue to be used at current rates, and buying from Denver and Aurora. Water law allows much of Castle Rock’s water to be reused — withdrawals from aquifers and transmountain diversions can be recycled “to depletion.” The town is working on recycling more aquifer water back into the system after it is spread on landscapes and flows back to local creeks. 

Restricting water use in new development also helps keep costs lower for existing Castle Rock homeowners, Marlowe said, a key consideration as electric, water and other utility rates soar. On a winter day, Castle Rock uses 4 million to 5 million gallons of water, while summer days peak at 19 million gallons. The city must build out enough infrastructure to handle the peaks, and charge ratepayers for the capacity and upkeep. 

Tennis courts and amenities surround Montaine, a resort-style neighborhood of luxury homes, in Castle Rock. Turf restrictions were not in effect when these portions of Montaine were built, but landscape designs use water-saving plants and limit grass lawns. (Olivia Sun, The Colorado Sun via Report for America)

Avoiding new infrastructure through keeping the summer peaks lower “will help on rates” over the long term, Marlowe said. 

Castle Rock calls its alternative home landscaping models “Coloradoscaping,” and Marlowe said such water-saving designs will be part of many new developments up and down the Front Range. “We certainly think it’s a good thing for the state as a whole,” he said.

Arvada’s steep increases to both development fees and rates for existing water and sewer users will shore up existing systems and allow growth that supports future city budgets, council members said in approving the increases unanimously Monday night

“Development has to pay its own way,” Arvada Mayor and Councilmember Marc Williams said. “We’re not going to do it on the backs of existing ratepayers. Yes, we recognize this is going to have an impact on housing costs.” Like other council members, Williams said Arvada now needs to redouble efforts on both utility support programs for lower-income customers, and creating more affordable housing units. 

“We invite all of you to work with us on that,” Councilmember Lauren Simpson told developers and community members in the audience. 

“As much as I hate to do it, it’s a necessary evil. I hope this doesn’t deter development in our community,” Councilmember David Jones said. 

Developers speaking at Monday night’s public hearing said the connection fees were high, but praised the council for agreeing to delay higher payments until July 2023 to allow them to line up permits and financing before the new fees take effect. 

“I hope that with the modification, developers will still see Arvada as a great place to be,” Jones said. 

Arvada purchases most of its water from Denver Water. The Jefferson County community is paying for one-sixth of the controversial expansion of Denver Water’s Gross Reservoir Dam in Boulder County, and will receive one-sixth of the new water supply from that, Israel said. 

The city and consultants spent the past three years studying water supply and capacity for water treatment, stormwater and sewage, Israel said. Council members mentioned their tours of the aging sewage treatment facilities reaching their limits, and having helped neighbors shovel sewage out of basements after the 2013 floods on the northern Front Range. 

Denver Water, meanwhile, is raising its raw water charges to Arvada by 15%, Israel said. Every stage of utility handling is undergoing massive inflation, from water cleaning chemicals to pipelines to fuel and equipment. Arvada needs to issue $100 million in bonds for its water and sewage utility systems, and interest rates on that new borrowing will be far higher than the rates contemplated three years ago. 

At the same time the new development fees were passed, the council approved a 12.3% increase in existing water rates and a 9.8% boost to sewage rates. Both systems will also charge higher fixed monthly service fees. 

“So all of that together we estimate it would be about $9 more a month for a typical single-family residence,” Israel said.  “We are still in the bottom third of the metro area in terms of fees for water and sewer services. So it sounds like a big jump, but it’s a big jump on a relatively smaller number.”

Israel acknowledged Arvada has not made the same push that Castle Rock and Aurora have made to reduce thirsty grass lawns. Landscape watering typically makes up about 50% of municipal water use in arid states that are thick with traditional turf grass. Arvada customers have access to consultation on creating a more water-wise landscape, she said, and the city is gradually installing smart water meters in homes that alert customers to leaks and their overall use. 

“We haven’t gone the same route as some other communities,” she said.

Michael Booth is a Colorado Sun reporter covering health, health policy and the environment. Email: Twitter: @MBoothDenver