As Colorado races to build more housing, communities are rethinking how land use and water planning work together to create a more sustainable future.
In Colorado, new developments are increasingly rife with questions about water cost and availability.
The state is currently more than 100,000 units short on housing, and the state demography office projects that some 34,100 new homes need to be built each year over the coming decade to prevent a deepening housing shortfall. Meanwhile, the Colorado Water Conservation Board projects that by 2050, there could be a gap between municipal and industrial water supply and demand of 230,000 and 740,000 acre-feet per year statewide.
Developing new, affordable housing for a growing population while reducing water demand cannot happen under business as usual, says Nicole Poncelet, executive director of One Water at the City of Fort Collins.
“The frameworks that we have in place, that were built back in the 20th century, don’t necessarily facilitate or make it easy to support the challenges that we are being faced with in the 21st century, like affordable housing,” says Poncelet. “Because the cost of water or the availability of water to even do development … You have to jump through a lot of hoops to try and move water.”
Because Colorado’s local governments have land-use authority, meaning communities themselves decide how they grow and whether water supplies are adequate, their decisions have a significant impact on the state’s future water supply and demand. As the state updates its guidance for strategic growth through policies and frameworks, the work of aligning land use with water availability will happen within local communities.
Strategic Growth
Compared to business as usual, strategic growth in Colorado could mean consuming about 36% less land, using 19% less water, and producing 11.5% fewer emissions from vehicles, all while resulting in 24% more multifamily housing and an estimated $1,708 savings on annual household vehicle costs, according to the Colorado Department of Local Affairs’ (DOLA) 2025 Colorado Strategic Growth Report.
“Strategic growth is about creating more housing Coloradans can afford, while protecting our water resources and reducing energy costs,” says Shannon Gray, DOLA communications director, who notes that many communities are already shifting development patterns. “In the last five years, the state has moved toward greater integration of growth strategies, housing and transportation, and has built on successes in integrating water and land use planning.”
Colorado’s Senate Bill 24-174, signed in May 2024, now requires local and regional planning commissions to consider DOLA’s Strategic Growth Report when adopting or amending comprehensive plans, which outline communities’ visions for future growth, land use, and development. Gray says the department has seen a high rate of compliance with the legislation already.
“While it is too soon to see all of the potential outcomes from the 2024 legislation, we have a wealth of evidence that communities are stepping up to do their part for strategic growth,” says Gray. “We are hearing and seeing locally and regionally tailored approaches to providing opportunities for housing with a long-term vision of fiscal and environmental sustainability.”
In addition, SB24-174 requires communities with comprehensive plans to coordinate with water providers to include a water supply element. According to Meryl Corbin, former Growing Water Smart Program director at the Sonoran Institute, simply creating this communication between communities and providers will go a long way toward water-efficient development.
Breaking Down Silos
“Just knowing who your water providers are and what their challenges are, opening that door to have more conversations and more collaboration around water and land use planning, or just even water supply planning, helps the local governments understand what the limits are,” says Corbin.
“We can no longer ignore that there are limits to the water supply,” says Corbin. “What can we do to grow smart and still meet our community’s needs?”
Fort Collins is already putting this idea into practice. The city manages its own water utility, but three other local water suppliers also serve certain Fort Collins residents, resulting in inconsistent fees, policies, and conservation programs. The city’s planning department has participated in several Growing Water Smart programs, including a two-day workshop by the Sonoran Institute, with water utility and planning partners. This helped them develop various policies and tools to meet their water efficiency goals. For example, a water efficiency tool — aptly called WET — evaluates water demand from various growth scenarios.
“Since we started doing these Growing Water Smart workshops together, our per capita consumption has gone down dramatically over the past 20 years,” says Clay Frickey, Fort Collins’ city planning manager. Fort Collins has reduced its water consumption per capita per day from 223 gallons in 1996 to about 140 gallons today. Communication has played a big role in this success: Frickey says the city consistently engages with utility providers to make sure they can serve future growth.
Meanwhile, other municipalities have built interagency coordination into their development process.
Buena Vista, after finding that the city could run out of water for new developments as soon as 2030, leveraged the Local Government Land Use Control Enabling Act of 1974, which allows cities, towns and counties to require that developers have a sufficient, dependable, long-term water supply for a build-out. The city’s water allocation policy, passed in 2023, now ties water use and development to specific community priorities, like more affordable workforce housing. It favors multi-family and dense residential development and deprioritizes larger, single-family homes — in alignment with the DOLA Strategic Growth Report recommendation.
More Support Needed
The Sonoran Institute has trained more than 70 water teams in Colorado — including Buena Vista and Fort Collins — to help communities create custom action plans to support water resilience. Corbin says she has seen communities of all sizes make measurable progress toward more coordinated, water-conscious growth.
“Colorado is leading the Western U.S. in integrated water and land use planning,” says Corbin.
However, Frickey notes that small communities may need additional support to comply with SB24-174.
“The idea that cities consider the impacts to our water supply at that level is really important. I think we should all be doing that … and I think it’s going to be a challenge for some municipalities to comply with [SB24-174] because of the level of specificity the state’s looking for,” says Frickey. “I think for some communities it’s going to be a pretty heavy lift to comply.”
DOLA assists local governments through a dedicated land use and water planner and a technical assistance team. Its Housing Planning Grant Program, which accepted its latest round of applications this summer, provides grants to local governments to help them better understand their housing needs. Gray also encourages small communities to work with neighboring jurisdictions and consider a regional approach to water-smart development, for coordination, efficiency, and shared cost.
“DOLA sees many pathways to accomplish the requirements and goals of SB24-174,” says Gray. “Colorado communities are on a path toward water-smart development and potential abounds to continue to take the work deeper. Many local governments have been leading the way.”
Emily Payne is a writer covering the intersection of food, agriculture, health and climate. She is editor of the global nonprofit Food Tank.
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