Real Estate & Construction  November 18, 2022

RE Conference: Expect to hear calls for more water storage as climate warms

BOULDER — More storage.

Communities can expect to hear calls for more storage as the population continues to grow in a world that is getting warmer.

That’s because in addition to those two factors in the American West, the region is losing its largest storage “facility” — if that term can be used to describe it.

Those attending Thursday’s Boulder Valley Real Estate Conference, a BizWest event held at the Embassy Suites hotel in Boulder, heard from water experts who detailed the financial impacts of climate change on the real estate industry, which increasingly has to factor the cost of water into the price of homes.

Kim Hutton, water resource manager for the city of Boulder, said warming temperatures mean that more of the precipitation in the region will fall as rain instead of snow. “Snow serves as a reservoir, so without that reservoir, we’ll have to develop more storage,” Hutton said.

Rain, on the other hand, flows down streams and if not captured will leave the state, even though water users in the state may have rights to use it.

“In this region, it is difficult to model [the effects of climate change] because of the effects of the mountains. Models show both wetter and drier years in future. But changes in temperature — all models align toward a warmer future,” she said.  

Hutton said that for Boulder, residents should expect a change in the timing of the hydrologic cycle with earlier runoff and higher stream flows earlier in the season. The models suggest more precipitation in the winter, but it will fall as rain, and less rain in the summer. 

Warmer summers will increase water demand, she said, because crops and other plants will require more water.

“Under climate-change scenarios, we anticipate having to restrict nonessential uses, such as landscaping,” Hutton said. Water resource managers will need to change their operations to take advantage of water when it is available.

Adam Jokerst, Rocky Mountain regional director of WestWater Research LLC in Fort Collins, said population growth is driving the immediate impact on water availability and pricing. Water available from the Colorado-Big Thompson water project is transacting at $100,000 per acre foot — five times higher than the cost 10 years ago. Of the share transactions occurring, 83% are designated for municipal use, he said. Among the sellers, 67% are agricultural interests.

“We estimate that of the 310,000 shares of C-BT, only about 30,000 remain to be transacted,” Jokerst said.

With high prices, water accounts for between $20,000 and $80,000 of the cost of every new home, a cost that many don’t understand, he said.

“You may pay $75 a month on the water bill, but you pay $300 per month in your mortgage to pay the water acquisition cost,” he said.

Water availability in Northern Colorado could take a hit in future years depending upon the outcome of debate over use of the Colorado River.

Megan Gutwein, attorney with Berg Hill Greenleaf Ruscitti LLP, said she anticipates that a resolution will occur, but she was unable to predict what the resolution might be.

The Upper Basin states of Colorado, Wyoming, Utah and New Mexico are in a battle of wills with the Lower Basin — California, Nevada, and Arizona. The Lower Basin uses its total allocation of the river, and more. The Upper Basin, meanwhile, is working to protect its share for its population growth.

“We’re at a critical breaking point,” Gutwein said. The Lower Basin states have had to make cuts and are resistant to making more. She expects “a plethora of different solutions to come together” to solve the issue. Among them could be a strategy to fallow some share of farmland each year in order to provide ag water to cities. The law firm is engaged in a multi-year study to see if this strategy has potential.

Ted Leighty, CEO of the Homebuilders Association of Metropolitan Denver, said Colorado needs to hope that a negotiated settlement occurs. 

The Upper Basin has more states, but “the Lower Basin has more votes” in Congress if the issue ends up there, he said.

BOULDER — More storage.

Communities can expect to hear calls for more storage as the population continues to grow in a world that is getting warmer.

That’s because in addition to those two factors in the American West, the region is losing its largest storage “facility” — if that term can be used to describe it.

Those attending Thursday’s Boulder Valley Real Estate Conference, a BizWest event held at the Embassy Suites hotel in Boulder, heard from water experts who detailed the financial impacts of climate change on the real estate industry, which increasingly has to factor the cost of water into the…

Ken Amundson
Ken Amundson is managing editor of BizWest. He has lived in Loveland and reported on issues in the region since 1987. Prior to Colorado, he reported and edited for news organizations in Minnesota and Iowa. He's a parent of two and grandparent of four, all of whom make their homes on the Front Range. A news junkie at heart, he also enjoys competitive sports, especially the Rapids.
Sign up for BizWest Daily Alerts

Related Content