The Denver Post

Costs can drain wallet

The high tap fees put amajor crimp on housing affordabil­ity.

- By Aldo Svaldi

Embedded in the price of every new home and apartment built along the northern Front Range are some of the highest water infrastruc­ture costs in the country.

Some factors behind those high costs are intractabl­e: a scarcity of available water and the fact that most Coloradans live on one side of the Rocky Mountains and obtain their water from the other.

But another contributo­r is the upfront fees local utilities charge to connect water and sewer lines to homes and other buildings. In and around Denver, a chorus of developers, water-efficiency advocates and others say, those charges can add thousands of dollars in unnecessar­y costs to houses, apartments and condominiu­ms.

Those higher costs, known as impact or tap fees, quietly get passed on to consumers in the form of heftier new-home prices and apartment rents.

“Tap fees cost every homeowner an incredible amount of money,” said Carmine Iadarola, president and founder of aquas an network, a water management and developmen­t consulting firm in Denver. “It impacts affordabil­ity and reduces conservati­on.”

One reason for that, Iadarola and others contend, is the wateruse models that predate u.s. entry into World War II. They haven’t kept up with strides in efficiency

and aren’t as accurate as modern alternativ­es based on actual usage.

In their defense, water utilities that use the old models say they are open to making changes, but they need proof that alternativ­es won’t be leaving buildings short of water. Undersizin­g a system, they warn, can create water-pressure problems and leave owners and tenants complainin­g to the local utility long after the builder has left the picture.

“Developers want least cost, and we want the most adequate supply,” said Cindy Marshall, manager of treated water planning at Denverwate­r. “There is a place we can meet in the middle.”

Denverwate­r, the largestwat­er provider along the northern Front Range, uses these long-standing models, which require a water connection to be big enough to handle every water-related appliance simultaneo­usly without a critical loss in pressure.

Outdated calculatio­ns aside, Denverwate­r charges less forwater infrastruc­ture overall because it got its start in 1918 and owns morewater rights than other utilities in Colorado.

Also, utilities contest the notion that their policies discourage conservati­on. In Aurora, for example, developers in Colorado’s third-largest city can get their impact fees down from $24,000 to $16,000 through a variety of conservati­on measures, such as substituti­ng grass lawns with Xeriscapin­g, or reducing the number of fixtures.

The utility also recently began setting impact fees based on projected consumptio­n rather than peak capacity.

“The more water you use, the more we have to go out and buy,” said Greg Baker, a spokesman at Aurorawate­r.

Iadarola, a water engineer, has fought for more than three decades to get utilities to allocate water capacity on actual usage. He said escalating home prices and rents have added urgency to the push to find a more dynamic system to set tap fees.

Those high fees hurt developers, too. In combinatio­n with rising land costs, they have diminished the pursuit of more affordable housing projects, said Steve Wilson, a developmen­t consultant in Denver.

“You can’t build a $200,000 house on a lot that will cost you $75,000 and that you will have to pay $50,000 in impact fees to the city for,” Wilson said. “You are $125,000 in the hole even before you bought a stick of wood.”

Efficiency not rewarded

Eliot Flats, a 40-unit apartment building in Denver’s Highland neighborho­od that opened a year ago, offers a case study in howthe current system can work against water efficiency.

Brice Leconte, founder of iunit Denver, which built Eliot Flats, has a mission of developing apartments for a demographi­c he calls “the missing middle.” The units are environmen­tally sustainabl­e and relatively affordable.

Living in the building areworking-class tenants who earn too much to qualify for subsidized units but can’t afford the luxury units springing up everywhere in central Denver.

Studio units are 380 square feet and cost $1,050 a month, while one-bedrooms are 460 square feet and rent for $1,300, below the $1,575 average in that part of Denver on a one-bedroom unit, according to Zumper, an apartment listing service.

Apartments at Eliot Flats are equipped with energy- andwaterco­nserving technologi­es throughout, and tenants can pull up an applicatio­n and track their electricit­y and water use in real time, seeing where, in terms of consumptio­n, they and their neighbors rank.

Because Denverwate­r charges a per-unit fee on multifamil­y Brice Leconte, a developer of small affordable apartments, sits in front of the water taps for his newly developed apartment complex, Eliot Flats, at 3233 Eliot St. in Denver. Northern Front Range water tap fees are some of the highest, and some developers argue they aremaking things unaffordab­le and deferring conservati­on. Helen H. Richardson, The Denver Post buildings, a studio at Eliot Flats has the same connection charge as a much larger penthouse in Cherry Creek or Lower Downtown.

“We don’t want to be charged like a traditiona­l apartment,” said Leconte. “They didn’t take into account that these would be efficient units.”

Denverwate­r also required Eliot Flats to put in a 2-inch water pipe to handle peak demand. Leconte hired Aquasan to track actual water usage for nearly a year. Those measuremen­ts estimate a 1inch tap would have been more than sufficient.

The water coming into the building isn’t the only issue. The Metrowaste­water District, which is separate from Denver Water, charges $92,600 to connect a building with a 2-inch tap versus $22,240 for a building with a 1-inch tap.

Leconte hopes the usage data from meters at Eliot Flats will help justify smaller water and sewer taps on future projects to Denverwate­r and other utilities. Those savingswou­ld allowhim to put in additional conservati­on measures or complete the next project at a lower cost.

Lower tap fees could make a dent in developmen­ts such as Leconte’s and, more broadly, in Denver’s challenge with affordable housing.

Jeffrey Whiton, CEO of the Home Builders Associatio­n of Metro Denver, said that as much as government leaders scramble to provide incentives to promote it, they aren’t taking advantage of a tool they have at hand.

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 ??  ?? Aquasan Network president Carmine Iadarola attaches a data-logging device to a water meter that measures flow froma large pipe at his office building in Denver. Andy Cross, The Denver Post
Aquasan Network president Carmine Iadarola attaches a data-logging device to a water meter that measures flow froma large pipe at his office building in Denver. Andy Cross, The Denver Post

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