Colorado lawmakers continued to address the state’s housing affordability crisis during the 2025 legislative session. Despite a constrained budget, the legislature passed several bills that will invest in affordable housing, reform land-use policies, reduce housing costs, and expand tenant protections. Many of these policies have direct implications for local governments such as Jefferson County (Jeffco). 

Budget Pressures & Proposition 123

• SB25-317 transfers interest and investment income from housing-focused cash funds, such as the Housing Development Grant Fund and the Innovative Housing Incentive Fund, into the General Fund. While this helped cover the state budget’s deficit, it reduces the amount of money available for affordable housing programs and development incentives.

• HB25-1019 improves the administration of Prop 123, the state’s primary housing funding initiative, by allowing the state Division of Housing to contract with third-party organizations to manage funds for homelessness programs. This change is designed to increase capacity and speed up fund distribution.
• SB25-313 clarifies that Prop 123 funds must supplement, not replace, existing housing resources and formalizes the process for covering administrative costs. These changes have limited immediate impact on local governments but reinforce the intent and limitations of funding new projects with Prop 123. 

Investments in Affordable Housing & Homeownership

In response to growing needs across the housing spectrum, lawmakers passed new financing tools aimed at helping lower- and middle-income families, as well as public school workers.

• SB25-006 allows the State Treasurer to invest $50 million in bonds with below-market rates issued by the Colorado Housing and Finance Authority (CHFA) to help create affordable homeownership opportunities for first-time buyers earning up to 140 percent of the state’s median income. The program aims to assist approximately 200 families over time.  
• SB25-167 establishes a Community Investment Portfolio of up to $200 million from the Public School Fund, allocating it to housing programs for the public school workforce, which CHFA will manage. The portfolio can include investments such as bonds or loans issued by the Middle-Income Housing Authority (MIHA) and others, which support housing for public school employees. 
• HB25-1006 allows school districts to lease district-owned land indefinitely for the development of affordable housing or solar fields, enabling the flexible, long-term use of public land for community benefit. 

Land Use, Zoning, and Homebuilding Reforms

The legislature also passed bills aimed at reducing the regulatory and legal barriers to building affordable and workforce housing.

• HB25-1093 updates the state’s ban on anti-growth ordinances by expanding it to include local policies that reduce density or residential land use in urban areas unless offset elsewhere in the jurisdiction.
• SB25-002 streamlines regulation and building code requirements for factory-built (modular) housing, enhancing the speed and cost efficiency of affordable home production. 
• HB25-1273 permits single-stair multifamily construction in large cities, which could cut costs and increase the number of units per development. 
• HB25-1272, also known as the Construction Defects Reform Bill, aims to boost condo development by lowering the legal risks for developers constructing multifamily housing. It raises the threshold for Homeowners Associations (HOAs) defect claims and modifies the timeline for filing lawsuits. The bill also establishes a state-run incentive program for builders who meet higher standards for construction quality and warranty.

Reducing Costs for Homeowners

To address rising concerns about housing costs, lawmakers enacted new policies to improve transparency in insurance pricing and strengthen protections for homeowners in HOA communities. 

• HB25-1043 reforms HOA foreclosure processes, increasing transparency and providing homeowners with more protections when facing enforcement actions from their HOA.
• HB25-1182 requires insurance companies to disclose wildfire risk models and explain how those models impact premiums. It also mandates offering mitigation discounts to residents who take proactive fire prevention steps, which is particularly important for Jeffco’s high fire-risk zones.

Strengthening Renter Protections

Several new laws strengthen tenant protections by improving lease transparency, reducing financial and screening barriers, and providing support when renters face eviction, discrimination, or the loss of a household member.

• HB25-1090 prohibits deceptive “junk fees” found in rental agreements and mandates full disclosure of lease costs upfront. 
• HB25-1168 enhances eviction protections for survivors of domestic violence, stalking, and sexual violence by permitting self-attestation as proof that violence has occurred, obligating landlords to provide flexible repayment options without additional fees, and offering greater flexibility in court and lease termination processes.
• HB25-1240  safeguards tenants with housing subsidies by requiring landlord cooperation and banning discrimination. It guarantees their rights under habitability laws and imposes penalties for violations.
• HB25-1236 removes barriers to housing by limiting the use of credit history when screening tenants who rely on housing subsidies.
• HB25-1249 lowers obstacles to moving in by allowing tenants to pay security deposits in installments and protects tenants during move-out by providing more precise damage documentation and enhanced inspection rights.
• HB25-1108 prevents landlords from charging extra fees or penalties when a lease is terminated due to a tenant’s death. It sets conditions under which a landlord can reclaim possession of the unit and specifies that deposits may be used to cover any damage-related costs due to the tenant’s death. 
• SB25-020 permits local governments to place persistently negligent landlords under third-party receivership to enforce habitability standards, providing an option for jurisdictions dealing with landlord noncompliance.

Implications for Jeffco & Other Local Governments

• Opportunities for Middle-Income Housing and Public School Districts: SB25-006 and SB25-167 open new financing pathways for school districts and workforce housing projects, complementing Jeffco’s Housing Blueprint goals that target households between 60 and 120 percent of the Area Median Income (AMI).

• Land Use Reform Alignment: Policies such as single-stair flexibility and factory-built housing streamlining align with Blueprint strategies that advocate for more flexible zoning, diverse housing types, and infill development.

• Expanded Tenant and Homeowner Protections: These new laws will affect day-to-day housing stability for residents by protecting renters from unfair evictions, fees, or screening practices, and by shielding homeowners from HOA overreach or unmanageable insurance increases. These changes are particularly relevant in Jeffco communities facing high eviction rates, wildfire risks, and HOA-related concerns.
• As Federal Cuts Loom, State Dollars Are Increasingly Limited: Though Prop 123 remains a stable funding source, broader fiscal shifts raise concerns. The transfer of $2.2 million from the Housing Development Grant Fund (SB25-317) and looming federal housing cuts may leave local governments shouldering a greater financial burden. Strategic use of Prop 123 and targeted local investments will be essential to maintaining momentum. 

Conclusion

The 2025 housing legislation provides Jefferson County with new tools to support its Housing Blueprint, including regulatory reforms, expanded funding opportunities, and enhanced protections for residents. While most state funding will be allocated to individuals or partners like CHFA, local governments can still play a key role by aligning zoning and permitting with state-level land use updates, helping residents access state-supported homeownership and renter protections, and strategically utilizing Prop 123 and related programs to address local housing gaps.

As federal housing cuts threaten funding and state resources remain limited, Jeffco’s progress will depend on proactive local leadership, coordination across jurisdictions, and ongoing investment in community-informed strategies. Continued local engagement will be essential to turning state policy into inclusive, affordable, and sustainable housing outcomes.