Castle Rock’s Town Council just signed off on a major rewrite of how water-related development fees are calculated, trimming some of the priciest line items that help make new houses so expensive. Town officials say the overhaul, built on new water-use data from homes constructed under the 2022 landscaping rules, will most sharply reduce fees for smaller single-family homes and could quietly steer builders toward more modest footprints.
The council approved the changes unanimously earlier this week, a move town leaders say reflects real, measurable drops in outdoor water use after the 2022 landscape ordinance took effect. Castle Rock Water Director Mark Marlowe told reporters that homes built under the new rules are averaging about 3,000 fewer gallons of water per month, a key data point that supported the fee overhaul, as reported by The Denver Gazette.
How the New Fee Tables Add Up
The updated ordinance divides charges into three main pieces: a renewable water resource fee, a water system development fee, and a wastewater system development fee. All three are levied when a complete building permit application is submitted.
Stacked together, those components come out to roughly $21,750 for homes under about 2,000 square feet, compared with about $59,657 for houses in the 7,500 to 7,999 square foot range. The ordinance spells out the full schedule and sets June 1, 2026, as the effective date for the new fees, according to the Town of Castle Rock.
Town staff estimates the change will reduce system development revenue by about 10 percent in the near term, or roughly $4 million, according to The Denver Gazette. Morgan Cullen of the Home Builders Association of Metro Denver told the paper that development-related costs for a new single-family home in Castle Rock can top $100,000, roughly 15 percent of a home’s final price, and supporters argue that easing this fee burden could help make entry-level homes pencil out.
Why the Town Changed the Formula
Castle Rock Water analyzed actual water use from houses built under the 2022 ColoradoScape landscaping rules and found that demand lines up more closely with finished square footage than with older assumptions tied to yard size and irrigation habits. In response, the ordinance now links fees to gross floor area, so smaller homes pay proportionally less for renewable water supplies and system capacity, as detailed by the Town of Castle Rock.
What Builders and Buyers Are Saying
Builders have not been shy about pushing back when fees go up, so a break on system development fees for modest homes is getting attention. Industry representatives say a lighter upfront hit on smaller houses could help close deals for first-time buyers who are already stretching to qualify.
The Home Builders Association of Metro Denver has been an active voice in Castle Rock planning talks and lists Morgan Cullen as a primary industry contact, underscoring the group’s ongoing focus on local fee and code changes, according to the Home Builders Association of Metro Denver.
What to Watch Next
The new fee schedule will apply at permit time, so the early tell will be what happens in the town’s building department. If smaller-footprint models start moving more quickly, the policy’s influence will show up there first.
On the town side, staff will have to balance the projected $4 million revenue drop against other water and capital projects. Over the coming months, Castle Rock will see whether its recalibrated fee tables actually shift the local market toward smaller homes or simply reshuffle the costs on the way to a building permit.
