Town to pilot SDF and water-fee adjustments to encourage smaller homes; commissioners question effect on land costs

Mayor Jason Gray and staff described proposed changes to the system development fee (SDF) and water permit charges aimed at reducing costs for smaller homes. Gray said the current typical cost to pull a permit and build a new house in Castle Rock is about $100,000 (as described in the briefing) and that the town is shifting certain water fees from a flat rate to a sliding scale based on home square footage and usage. He said the adjusted fee schedule could lower fees for smaller homes, with staff estimating lower-end fees in the tens of thousands of dollars and higher-end fees rising as home size increases.

Commissioners and participants praised the goal but questioned whether fee adjustments alone would meaningfully reduce overall home prices because land cost is the dominant factor. A commissioner suggested attached housing (duplexes or townhomes) might better achieve price reductions because land costs are spread across more units. Gray said staff and the Home Builders Association will monitor usage and track the policy periodically and that a sunset or annual review could be used if uptake is low. The transcript did not include a final policy decision; staff characterized the change as an incentive under evaluation.