Legislative Response to Colorado’s Housing Crisis

In the 2022 legislative session, our legislators continued to commit resources to expand affordable and workforce housing as well as improve landlord-tenant relations. Facing a profoundly unaffordable housing market and an influx of one-time federal funds, legislators largely followed the recommendations of the Colorado Affordable Housing Task Force. Legislators did so, hoping to reduce the cost of housing for low- and middle-income Coloradans by increasing the supply of available and affordable housing. Successful implementation of these bills will positively impact the current situation; however, land use and zoning reform should be considered in 2023 as complementary action to increase the supply of housing in Colorado.

Much of this session was dedicated to legislating the task force recommendations. Stakeholders are generally pleased with the results, as is the Bell. A central sticking point was how to best target these funds based on area median income (AMI) and differing thresholds for rural, urban, and mountain resort communities. In the end, five bills came out of the task force recommendations:

  • SB-159: Revolving Loan Fund Invest Affordable Housing will distribute $150 million in below-market, low-interest loans to develop or maintain the affordable housing stock. These loans will be administered by the Department of Local Affairs (DOLA), and local governments, non-profits, and for-profit developers can apply for them. Entities can utilize these funds for gap financing, restoration of affordable housing, increasing the supply, or developing housing-related infrastructure, amongst other things.
  • Complementing these funds, HB-1304: State Grant Investments Local Affordable Housing establishes two state grant programs. The first program focuses on affordable housing and will have an allotment of $138 million. The other will focus on infrastructure and community needs, beginning with $40 million. Likewise, these monies can be received by local governments and non-profits. The investment opportunities are similar, extending to land banking, rental assistance, and funding eviction legal defense projects.
  •  SB-146: Middle Income Access Program Expansion provides $25 million to expand the middle-income access program, assisting the financing of rental housing for Coloradans at or above 80 percent AMI.
  • Finally, SB-160: Loan Program Resident-owned Communities establishes a $35 million loan and grant program to help mobile homeowners purchase their mobile home parks. Grants will be available for non-profits assisting mobile home residents as well as in supporting rent stabilization programs.

Mobile Home Park Residents

Legislators went beyond task force recommendations, implementing several important housing bills. Chief amongst these bills was HB-1287: Protections for Mobile Home Park Residents. The bill provides greater legal protections for residents of mobile home parks. This is partly ensured by requiring greater landlord accountability in providing notice of mobile home park sale or repairing damages to mobile homes. Additionally, if a landlord changes the use of land agreement governing the park and a resident is thus forced to move, monetary compensation must be awarded. Many other legal requirements and regulations are enacted in this legislation—a long-needed codification of a dangerously unregulated form of housing. Notably, a rent control measure was removed from the bill.

Affordable and Workforce Housing

Tax credits and incentives were also employed to encourage further development of affordable and workforce housing. For example, HB-1117: Use of Local Lodging Tax Revenue will allow districts to use their marketing and promotion tax and county lodging tax revenue to provide housing and childcare services for the tourism-related workforce, including seasonal workers. Due to rising housing costs, these workers and their families have been forced to move further from their place of work. In particular, mountain communities will benefit from this redirection of tax revenue to provide essential services for their workers. 

Legislators also extended an existing credit through HB-1051: Modify Affordable Housing Tax Credit, which will expand the scope of the state’s affordable housing income tax credit. Administered by the Colorado Housing and Finance Authority (CHFA), the tax credit is limited to $10 million per year. This bill extended the credit from 2024 through 2031. Additionally, changes were made to the cap to allow counties impacted by federally declared natural disasters to further leverage federal and state disaster funds with the tax credit for further financing in recovery from the disaster.

Finally, in the last weeks of the session, a new authority was created through SB-232: Creation of Colorado Workforce Housing Trust Authority, attempting to address the middle-income gap. The bill creates a new public entity to acquire and finance rental housing for the middle-income workforce. For TABOR purposes, the authority would be a “special purpose authority,” costing the state only $6 million from the General Fund. In its operation, the authority would be able to issue bonds and develop affordable housing projects through public-private partnerships. In return, projects and developers would reduce their income, sales, and use tax liabilities. An initial pilot project would undertake roughly 3,500 housing units.

In sum, the legislature directed significant funds to address Colorado’s housing crisis. Coloradans in need of affordable housing now have greater resources and mobile home park residents stronger legal protections. In growing our housing supply, we’ll need to ensure these resources are targeted, helping rectify inequities across our state.

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