For the first time in 13 years, fees for connecting to the Denver water supply will increase.

The fee charged to builders of new homes and businesses — formally called a “System Development Charge” — will increase by around 30% beginning July 1, according to Denver Water.

The Denver Board of Water Commissions had made the decision to increase the charge in March of 2025, with plans for a two-phase process. The initial increase began on Jan. 1, with the second coming on July 1.

The base charge for a single-family residential home rose to $3,205 on Jan. 1, with an additional 86 cents charged per square foot. On July 1, the base charge would be $3,380, with a $1.01 charge per square foot, according to Denver Water.

These prices bring the “tap fee” for a single-family home in Denver on a 7,000-square-foot lot from $7,930 in 2025 to $10,450, an increase of $2,520.

The new fee for a similarly sized new single-family home in Denver Water’s suburban service areas would increase from $11,100 in 2025 to $14,680 — a hike of $3,580, Denver Water said.

Why now?

The sharp rise in the rates comes at a time of severe drought in Colorado, with Gov. Jared Polis recently activating a statewide drought emergency declaration.

The drought affects water health, which naturally drives up the value of clean water, experts have said.

“E. coli levels are probably going to be higher than normal, which is important for public health,” Jon Novick from the Denver Department of Public Health and Environment earlier told Denver 7.

This safety worry has compelled Denver Water to implement several efforts, which, in turn, have increased the value of one gallon of drinking water by over 50% in the last decade, Denver Water said.

The company cited other contributing factors — development additions increasing estimated water needs, increases in replacement value of current assets and new treatment center construction costs.

Denver Water offers credit

The water agency announced a program that builders can participate in to receive up to a 20% credit on their building fee, Denver Water said.

The program requires builders to implement highly efficient water-saving mechanisms, including water-efficient washers, low-flow toilets and faucets and water-saving landscaping methods.

“This program helps developers reduce their project’s water use up front, when the building is under construction. And that means the building tenants, whether the building is for residential or commercial use, will save water without having to think about — helping to keep water rates lower for everyone,” Austin Krcmarik of Denver Water said.

A legislative measure passed in May 2025 requires water providers to “ensure that the amount of the tap fee is reasonably related to the costs incurred by the district in providing water service.

Under House Bill 25-1211, companies must also take into consideration the building’s expected water usage, square footage and any water-saving mechanisms.

While supporters argued that the bill levels the playing field and protects affordable housing, critics like Eric Reckentine, the district manager of North Weld County Water District, expressed worries about the bill’s consideration of water-saving mechanisms.

He argued that this could shift costs to existing customers, forcing them to bear some of the cost of new developments, Reckentine told The Denver Gazette.