Castle Rock Now Prices New-Home Water Hookups by the Square Foot. Not Every Size Comes Out Ahead.

What does an unfinished basement cost in Castle Rock before anyone frames a wall? Since July 1, 2026, it can cost several thousand dollars in water and sewer fees, paid when the building permit application is filed. The Town of Castle Rock now sets those fees by a home's gross floor area. Under the definition in Ordinance 2026-014, gross floor area includes basements, mezzanines and interior circulation space. Garages, decks, patios and open balconies are left out.

The town describes the change as a way to charge smaller homes less. Mostly it does. The tiers don't climb in a straight line, though, and per square foot the hardest hit falls on the mid-size homes many move-up and relocating buyers are shopping for.

The basement is part of the measurement

Before the change, every new single-family home in Castle Rock paid one flat development fee, whatever its size. From January through June 2026, the town's comparison slide shows that flat total at $54,729 for a home in the Plum Creek basin. The new method grew out of two calendar years of actual water use from homes built under the town's 2022 landscape ordinance. Castle Rock Water found that demand in those homes tracked their total gross floor area.

So the measurement is the whole enclosed house. The town's own slides label the size column "Total SF Including Unfinished Basement." Take a plan with 1,900 finished square feet above grade and a 700-square-foot unfinished basement. It doesn't fall in the 1,500 to 1,999 tier. It's billed as a 2,600-square-foot home.

For a buyer comparing floor plans, that matters because the fee tiers come with cliffs.

Where the curve bends

Town Council passed the 2027 rates and fees ordinance on first reading, 7 to 0, on Oct. 6. Second reading is scheduled for Oct. 20, 2026. The draft ordinance lists three charges for each size tier: a water system development fee, a wastewater system development fee and a renewable water resource fee. Added together, the proposed 2027 amounts look like this:

Two jumps stand out. Going from 1,999 to 2,000 square feet adds about $13,100. Crossing 2,500 adds another $9,100 or so. After that the curve nearly levels off. A 3,000-square-foot home pays about $570 more than a 2,500-square-foot home, and a 4,500-square-foot home pays only about $3,400 more than that.

The 2026 schedule now in effect has the same shape. Its renewable water resource fee, the largest of the three, rises from $15,018.14 at 1,500 to 1,999 square feet to $23,385.40 at 2,000 to 2,499 and $29,178.11 at 2,500 to 2,999. Then it creeps to $29,392.65 at 3,000 to 3,499.

The shape follows the town's data. In the SFE share column on the town's slides, a 2,000 to 2,499 home counts as 65% of a single-family equivalent, while a 4,500 to 4,999 home counts as 87%. That's the measured relationship between size and demand, and a buyer pays for it on that curve, not on a smooth one. Homes under 2,000 square feet do come out well ahead. In the band where many family floor plans sit, per square foot the fee charges the most.

The 4% depends on the starting point

The town's main talking point is that the average new home will pay less. "You can see the average size house being built in Castle Rock is about 4,700 square feet," Castle Rock Water Director Mark Marlow told council, according to the Denver Gazette. "If you look at the system development fees we put in place at the beginning of 2026, the proposed 2027 fees for that average house are actually going down about 4%."

That's accurate, measured against the flat fee from early 2026. The town's own comparison slide shows the full sequence for a home in the Plum Creek basin:

1. 2022: $39,196 for every home size
2. January to June 2026: $54,729 for every home size
3. July to December 2026: $36,707 for 2,000 to 2,499 square feet, $48,204 for 4,500 to 4,999 and $57,215 for 6,000 to 6,499
4. Proposed 2027: $39,944, $52,367 and $62,777 for the same three sizes

Measured against the current July schedule, every one of those sizes goes up in 2027. The draft ordinance's 2027 columns are higher than its 2026 columns in every tier for all three fee types. The 4% decline only shows up when 2027 is compared with the old flat fee. For homes in the Cherry Creek basin, the slide shows a similar pattern with slightly different totals.

The same slide shows something else that has changed. From 2023 through 2025, builders could get a discount of up to 33% for installing front and back yard landscaping, and about half of the homes built in those years used it. The slide marks that program as 2023 to 2025, and the sliding scale is listed as what changed in 2026.

Why fees keep climbing while building slows

The town's proposed 2027 budget message, dated Sept. 15, 2026, budgets 350 single-family units and 400 multifamily units for 2027. It states the consequence directly: slower residential growth means lower impact fee revenue and less capacity for capital projects.

The capital list isn't getting shorter. The same budget calls for continued work on doubling the Plum Creek Water Purification Facility, building the Liggett Road pipeline, starting the Plum Creek Central Pipeline, building a pipeline from East Plum Creek to Rueter-Hess Reservoir, and continuing the Chatfield Reallocation and the Platte Valley Water Partnership. It also covers planning and design for a desalination facility under the WISE project, which will deliver twice as much water to Castle Rock in 2027. According to the Gazette, town documents show the utility's long-term capital plan through 2065 has grown by nearly $290 million, partly because of updated construction cost estimates and slower projected growth.

"Unfortunately, the increases in water rights and infrastructure for water are just going through the roof and they're way above inflation," Marlow said.

With fewer new connections and a bigger bill to pay, each connection carries more. The town's five-year schedule proposes raising the water resources portion of development fees 7.5% a year from 2027 through 2031, and the wastewater portion 8.5% a year. Morgan Cullen, director of government affairs for the Home Builders Association of Metro Denver, told council that development-related fees in Castle Rock have roughly doubled over the past five years and can top $100,000 on a 2,500-square-foot home. He said added fees ultimately become part of the price homebuyers pay. Town staff said they're in the final stages of hiring a national consulting firm to review the impact fee structure.

What a resale buyer takes on instead

A resale home has already paid its connection fees, so the tier table doesn't apply. What carries over is the monthly bill and, for homes built under the newer rules, the yard.

For the typical residential customer using about 8,000 gallons a month, the town projects the annual water bill will go from $1,571 in 2026 to $1,647 in 2027, about 4.8% more. For scale, the budget message says the owner of a median-valued Castle Rock home, $635,115, paid $35.76 in Town property tax in 2026. That figure covers the Town levy only.

Lot by lot, the yard rules make more difference than the rate change. Homes built under the 2022 landscape ordinance, whose turf limits a Castle Rock Water staff report says took effect at the beginning of 2023, follow the town's Landscape and Irrigation Criteria Manual:

• No irrigated turf in the front yard, which must use a ColoradoScape design with at least 75% plant coverage at maturity
• A cap of 500 square feet of irrigated turf in the backyard, limited to approved moderate- or low-water-use varieties, with all-Kentucky-bluegrass lawns prohibited
• Pools and water features reduce the allowed turf area by an equal amount

Older homes with full lawns carry a bigger summer load. Starting in 2027, a redesigned conservation surcharge applies to residential use above 50,000 gallons a month, with a second tier above 100,000 gallons. Marlow said it would have affected 208 residential customers in 2026. Owners who want to cut back on turf can use the ColoradoScape renovation rebate. Under its 2026 terms, it paid $3.25 per square foot of turf replaced, with a minimum of 400 square feet or the entire front yard and a maximum of 1,500. Projects needed a pre-inspection and had to be finished by Sept. 30. The proposed 2027 budget includes continued funding for ColoradoScape rebates.

FAQ

Are the 2027 fees final? Not yet. Council passed them on first reading Oct. 6, second reading is scheduled for Oct. 20, 2026, and the stated effective date is Jan. 1, 2027.

Which schedule applies to a home under construction? The ordinance says the fee is collected when a complete building permit application is submitted. The schedule in effect on that date is the one that applies. Builders can confirm which one applied to a specific home.

Do the fees apply in every part of Castle Rock? The ordinance notes that the wastewater development fee schedule doesn't apply to homes served by the Pinery Water and Wastewater District.

When you're comparing a 2,400-square-foot plan with a 2,600-square-foot plan, or a new build with a 2018 resale on a full lawn, the connection fees and water bills behind each one belong in the comparison. Harrison McWilliams can go through those numbers with you, plan by plan, before you commit. Schedule a free consultation and let's plan your next move.

This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.