Colorado building permits: Single-family down nearly 43 percent since 2021

By Shaina Cole | Contributing Writer, Rocky Mountain Voice

Colorado builders pulled permits for 33,754 new housing units in 2025, according to the U.S. Census Bureau’s Building Permits Survey. That beat 2024 by almost 5 percent.

Permits authorize construction, so they measure what builders intend to put up rather than what gets finished.

The net gain came entirely from one category.

Permits for single-unit homes fell again last year, to 17,406 from 20,434 in 2024. Three- and four-unit buildings fell harder, down 38 percent. Duplex permits rose, from 402 units to 462.

None of those categories moved enough to change the picture. Buildings with five or more units grew 43 percent, and that one category more than accounted for the whole net increase.

A new report from the Common Sense Institute helps explain what that does to a price tag. Through 2023, CSI finds, Colorado’s new housing leaned steadily toward small units. A small home costs far more per bedroom than a large one.

Smaller homes cost more per bedroom

More Homes, Smaller Households was written by CSI economist Andrew Woodward and published Nov. 5.

Its fourth key finding is blunt. “A one-bedroom home costs about 70% more per bedroom than a three-bedroom,” the report states. A typical Colorado one-bedroom was worth roughly $291,000 in 2025. A three-bedroom penciled out to about $173,000 per bedroom.

Rents ran the same direction. From the mid-2010s to the early 2020s, CSI found “median rent rose 85% for studios in Colorado and 73% for one-bedroom units,” against 53 percent for three-bedrooms and 46 percent for four-bedrooms.

Builders have been moving toward the expensive end of that scale for a decade. Buildings with 20 or more units were 10 percent of Colorado’s housing stock in 2014. From 2014 through 2023 they accounted for 26 percent of all net new units. The report calls that more than two and a half times their share of the existing stock.

Single-family detached homes were still the majority of new supply over those years at 53 percent, by the report’s count, but the mix is shifting toward smaller units.

In Denver, occupied studios jumped 164 percent between 2005 and 2024, from roughly 8,700 to about 23,000. Studios and one-bedrooms together made up more than a third of the roughly 108,000 homes the city added over the period.

What the permit file shows

CSI’s permit figures stop at 2024. The Census files run into 2026.

Units in buildings with five or more were 34 percent of Colorado’s permitted units in 2024. In 2025 they were 46 percent.

Go back to the 2021 peak and the split gets starker. Colorado permitted 56,524 units that year, including 30,246 single-unit homes. By 2025 the single-unit figure had fallen nearly 43 percent. Permits for two-, three- and four-unit buildings fell 65 percent over the same four years.

The Census single-unit category is not limited to detached houses. It counts townhomes and rowhouses too, which is to say it counts much of what gets described in Colorado as a starter home. That category has lost more permits than any other, down 12,840 a year since the 2021 peak.

This year is tracking slightly below last year. Through September, Colorado had permitted 23,744 units, against 24,121 in the same nine months of 2025, by the survey’s monthly state files. Single-unit permits are off another 5 percent. At the average monthly pace through September, 2026 would finish near 31,700.

Shrinking households, not newcomers

For most of the past decade the story Coloradans heard was about people moving in faster than homes went up. CSI’s data splits the cause differently now.

Average household size fell from 2.55 in 2020 to 2.45 in 2024. That decline by itself created about 88,000 new households from 2021 through 2024. Population growth created about 69,000.

Population growth slowed 45 percent, from about 76,000 new residents a year in 2014 through 2019 to about 42,000 in 2021 through 2024. Household growth did not slow with it. It sped up, to an average of 39,000 a year, against about 29,500 a year in the earlier period.

Aging explains much of it.

Coloradans 65 and older were 11 percent of the population in 2010 and 16.5 percent in 2024, and the State Demography Office projects 20.7 percent by 2050. Nearly half of Colorado households headed by someone 75 or older consist of a single person, about twice the share for householders under 55. Among homeowners 65 and older, 63 percent moved into their current home before 2010.

Households with children under 18 went the other way, from 34 percent of all Colorado households in 2005 to 27 percent in 2024.

The numbers in circulation

Housing the households Colorado expects “at today’s vacancy rate would take about 31,000 new units per year over the next decade,” CSI found. The report notes that permits have fallen closer to that figure.

Colorado permitted 33,754 units last year.

The state’s own estimate runs higher, and it comes with a backlog attached. In a September 2025 research brief, “Colorado’s Housing Shortfall,” the State Demography Office put the shortfall at 106,000 units as of 2023, down from a peak of 140,000 in 2019.

About 34,100 units a year would have to be built over the next decade to hold the shortage where it was, the Department of Local Affairs said.

Hold it where it was. Not close it.

That is the part worth keeping straight. The state’s 34,100 and CSI’s 31,000 are both run rates, the pace that keeps up with new households. The 106,000 is the backlog, and neither annual figure eats into it.

The state credits builders for the progress so far. Colorado has averaged 43,000 new units a year since 2020, the brief found, well above the pace of the previous decade.

When Gov. Jared Polis and House Speaker Pro Tempore Andrew Boesenecker unveiled the HOME Act in Fort Collins in December 2025, Boesenecker said Colorado “lacks over 100,000 homes,” according to the governor’s office.

What has changed is the run rate. CSI’s 31,000 sits below the state’s 34,100 because population growth fell.

Who gets to act on it

HB26-1001, the HOME Act, went into statute as a new part of Title 29 after Polis signed it March 25.

Under C.R.S. 29-35-503, enacted as Chapter 8 of the 2026 session laws, local governments above 2,000 residents have to allow a residential development on a qualifying property through an administrative approval process, subject to exceptions in the statute.

A qualifying property runs no more than five acres and has to be owned by one of a short list of qualifying entities. Among them are a school district, a state college or university, a board of cooperative services, a housing authority, a transit district or regional transportation authority and a nonprofit with a demonstrated history of providing affordable housing.

One carve-out lets a local government opt out where it runs a transferable development rights program on the property and that program carries a permanent affordability restriction.

None of it applies until Dec. 31, 2027. Jurisdictions already rewriting their codes to comply get until June 30, 2028, a date the legislature had to fix in a revisor’s bill after the HOME Act was enrolled with a deadline of June 31.

Six Front Range cities had already sued. Aurora, Arvada, Glendale, Greenwood Village, Lafayette and Westminster filed a complaint for declaratory and injunctive relief in Denver District Court on May 19, 2025, docketed as 2025CV31811, challenging HB24-1313 and HB24-1304.

They also challenged Executive Order D 2025 005, which Polis had signed three days earlier. It directs four state agencies to identify grants the state can withhold from local governments that do not comply with the housing laws. The Denver Gazette put the money at more than $100 million.

Under C.R.S. 29-35-204, HB24-1313 requires certain Front Range governments to calculate a housing opportunity goal by multiplying their transit-area acreage by 40 dwelling units per acre, then to rezone to meet it.

The cities say in the complaint that 40 units an acre is ten times denser than the densest zoning Greenwood Village now permits, and that the statute’s implementation blueprint would “greenlight development at levels that would more than triple Greenwood Village’s existing housing stock.”

Then Lakewood voters settled their own version of it. On April 7 they repealed all four of the city’s 2025 zoning ordinances, 22,310 to 13,357 on the lead question, or 62.6 percent of the votes cast on it, according to the city clerk’s final official results. A total of 35,760 ballots were cast.

The result restored the pre-2025 code and drew criticism from Polis.

Five months earlier, Littleton voters had written land-use protections into their own city charter, approving Ballot Question 3A with about 55 percent of the vote. The measure limited the permitted uses in four residential zoning districts to those in place on Jan. 1, 2025, and required first-class mailed notice to affected property owners before the council initiates what it calls a “comprehensive rezoning.”

Rooted in Littleton, the group that put it on the ballot, chose the charter over an ordinance on purpose. “Ordinances can be changed by a majority vote of just four city council members,” the group says on its website. A charter amendment takes another vote of the people.

CSI has its own answer on file. The institute published a starter home zoning template on Jan. 29, 2026, listing housing fellow Peter LiFari and Don Elliott as its experts. It proposes a local zone district for freestanding single-unit homes of no more than 1,000 square feet, where approvals are administrative and require no additional public hearings. It leaves the decision with cities.

Gov.-elect Phil Weiser takes office in January having campaigned on building 40,000 starter homes. His stated diagnosis was permit costs. “Let’s cut permitting costs so that when we’re building these types of starter homes,” he said in an October campaign video, “it’s not going to cost the same to get a permit if you’re building a mega mansion.”

Woodward’s report does not weigh in on any of it. It contains no discussion of zoning, land use or legislation at all.

What it does say is that Colorado had 0.44 housing units per resident in 1985 and 0.45 in 2024. The count held. What changed is how many people live in each one, and what a bedroom inside costs.

The 2027 session convenes in January.