Colorado Springs Utilities is setting aside millions to help support infrastructure for new developments and affordable housing.

The spending is meant to help encourage new construction and address the shortage of housing that has pushed up costs for renters and home buyers. The median price of a home has increased $90,000 since last year up to $450,000, according to a report from the Pikes Peak Association of Realtors.

“We are trying to help make a difference in what’s a community challenge right now,” utilities board Chairman Wayne Williams said during a July 21 meeting. Williams and the other Utilities board members are also elected Colorado Springs City Council members.

To support affordable housing, Utilities is setting aside $2 million annually or enough to cover the infrastructure costs for 120 single-family homes or 2,000 apartments. The city will grant funding for infrastructure to projects that are providing housing to low-income residents.

Utilities board member Dave Donelson expressed concern about setting aside utilities funding to support affordable housing and straying from Utilities’ mission of providing electricity, water and wastewater services.

“When we take $2 million for a cause we feel is a worthy cause, someone has to pay for it . ... The ratepayers don’t get a choice, it just occurs,” he said.

City Chief of Staff Jeff Greene strongly supported setting aside funding for housing that would serve low-income residents.

Utilities is also planning to cover upfront costs of ensuring that water and wastewater mains are properly sized for long-term developments. Currently, the full cost of water and wastewater mains falls on developers, even if the developers don’t need the extra capacity meant to serve development yet to be proposed, according to information presented to the board. Developers who cover those extra upfront costs are paid back by other developers who build later.

Making someone pay for a larger main that will benefit future development could serve as disincentive to develop, Williams said.

When future development arrives it will be required to reimburse Utilities for the cost of the water and wastewater pipes. The agency expects to cap the amount it will spend on larger infrastructure at about $10 million. Once the cap is reached, Utilities will use funds as it is paid back to cover the costs of providing extra capacity.

“Over-sizing of infrastructure is a more cost-effective way for Colorado Springs Utilities to prepare for future growth. If we build only for current capacity and customer need, without accounting for forecasted growth, it won’t be long before our pipes and wires are no longer able to deliver the water and energy to a community that has doubled in size,” said spokeswoman Danielle Oller.

Board member Bill Murray called the plan an incentive package for development.

“This is a direct benefit to a development . ... So we can incentivize that development at greater distances,” he said.