What It Takes to Own and Operate Assisted Living in Colorado

Colorado has become one of the more closely watched states for senior housing investment, and Colorado Springs sits near the center of that attention. But entering this market means understanding a regulatory framework that’s more detailed than many owners expect. Here’s what property owners and operators need to know before entering or expanding within the Colorado assisted living market.

Understanding Colorado’s Licensing Requirements

Every assisted living residence in Colorado must hold a license from the Colorado Department of Public Health and Environment (CDPHE) before opening its doors. Colorado governs this process under Revised Statutes 25-27-101 and the state’s health facility regulations under 6 CCR 1011-1, Chapter 7, and requires a completed application, applicable fees, and an on-site inspection. Owners must also disclose their ownership structure, financial stability, and operational policies as part of the licensure process and must provide proof of liability insurance and zoning compliance.

As a reference point, the base licensing fee for communities with up to 19 beds has been approximately $9,026. However, owners should confirm current figures directly with CDPHE, as fee schedules are updated periodically.

Staffing and Training Standards

Colorado requires direct care team members to complete an initial eight-hour training within 30 days of hire, followed by an additional eight hours of training annually. Background checks are required for all care team members, with additional protocols in place for memory care environments serving residents with Alzheimer’s or dementia.

Workforce availability remains one of the biggest operational variables nationally. Industry-wide, an estimated 63% of assisted living communities report being moderately to highly understaffed, a factor that should shape staffing budgets and retention planning for any new Colorado property. Owners should also track recent state-level wage legislation affecting direct care roles, including exemptions that may apply to smaller communities.

Building and Space Standards

Colorado sets specific physical requirements that affect both new construction and renovation planning. Communities must provide private or semi-private sleeping rooms, capped at two residents per room, with a minimum of 100 square feet of personal space in a private room or 60 square feet per person in a shared room. Bathroom access is also regulated, requiring at least one full bathroom for every six residents.

These standards should be factored into acquisition due diligence as early as possible, since retrofitting an older property to meet space and bathroom ratios can be a significant cost driver.

Colorado’s Position in the National Senior Living Market

Colorado’s demographic trajectory is a major part of its appeal to investors. The state’s 65-and-older population is projected to exceed 1.2 million by 2030, with the 85-and-older segment expected to grow by more than 60% by 2035. That places Colorado among a group of states with the fastest-growing 65+ populations, alongside Florida, Arizona, Texas, the Carolinas, Georgia, and Idaho — markets where new capacity is likely to be absorbed quickly rather than sitting vacant.

The broader occupancy picture supports that outlook. Senior housing occupancy reached 89.9% in the second quarter of 2026, the highest level in more than 10 years, last seen at the end of 2015. Assisted living occupancy specifically rose to 88.4% during the same period, while independent living reached 91.3%, with 15 of the 31 primary markets tracked nationally already above the 90% threshold. Limited new construction continues to keep pace with rising demand, meaning existing and new communities are filling steadily rather than sitting vacant.

For owners evaluating Colorado Springs specifically, this combination of population growth and constrained supply points to a market with room for well-positioned operators.

Financial and Compliance Planning

Beyond licensing and staffing, owners should plan for a few additional considerations. Communities that wish to serve Medicaid recipients can pursue certification as an Alternative Care Facility (ACF) through Health First Colorado, which allows the community to receive Medicaid reimbursement for services provided to residents. Fee schedules for Colorado health facilities, including assisted living residences, are published annually by CDPHE each March for a July 1 effective date, so owners should confirm current costs directly against the published schedule rather than relying on older figures. Zoning compliance, ownership disclosure, and financial stability documentation are required both at initial licensure and whenever ownership changes.

Frequently Asked Questions About Assisted Living in Colorado