State Task Force Unveils $400 Million Affordable Housing Plan for Colorado

A state task force wants to see Colorado spend at least $400 million of its federal COVID-relief money on building out and maintaining the affordable housing stock in increasingly unaffordable Colorado.

"At every single stage of the housing continuum, we heard about the need for this transformative change," says state Senator Julie Gonzales, a Denver Democrat who served as vice-chair of the Affordable Housing Transformational Task Force, a bipartisan group of lawmakers who worked on the issue through the second half of 2021.

In its report released January 31, the task force notes that thanks to American Rescue Plan Act money, Colorado has a "once-in-a-generation opportunity to transform its affordable housing system and make sure it works for Coloradans in every corner of the state." It lays bare Colorado's current affordability crisis, noting that in 2019, "an estimated 315,000 households in Colorado paid over 50 percent of their income towards housing."

What would make Colorado affordable? If residents could access housing for less than 30 percent of their household income, according to the report. But to get to that point, Colorado would need to see the construction of 225,000 housing units over the next few years for current residents and an additional 100,000 for new residents.

"We never get to talk about this amount of funds solely directed toward housing. We’ve never, as a legislature, talked about this scale to address our housing crisis," says Gonzales. "In that way, it’s really exciting."

The task force and directors of executive branch agencies are recommending that the state earmark at least $150 million of ARPA money for a low-interest loan fund for affordable housing projects. This fund would be accessible to developers working on new facilities and also to maintaining existing affordable housing. Much of the money would go to gap financing to help make the economics of a project work, rather than to fully funding a project. Developers would also be able to access the fund to help finance energy improvements in affordable housing developments.

At least another $150 million would go to grants for nonprofits and local governments for largely the same kind of affordable housing projects, with the addition of rental assistance and support for infrastructure needs to spur denser development in certain areas.

The plan calls for at least $35 million in funding for land-banking, land trusts and community-owned land projects — such as residents of a mobile-home community buying land. It also wants to earmark $40 million for the support of prefabricated home production and another $25 million for "missing middle" housing, commonly referred to as workforce housing.

Fifteen out of sixteen of the task force members agreed on the funding recommendations. Representative Andres Pico, a Republican from Colorado Springs, was the lone dissenting vote.

While the task force was comprised entirely of lawmakers and state officials, a subpanel that included people who work in homelessness services, affordable housing, development and local politics advised the group throughout its work.

With a framework for how the State of Colorado should spend the $400 million in ARPA funds, lawmakers will have until the end of 2024 to allocate the money and until the end of 2026 to spend it.

"Now, the hard work begins. Because now we’ve got to translate those recommendations into policies," says Gonzales, noting that bills stemming from these recommendations will be debated this session.

The report also includes recommendations that don't have specific price tags attached. For example, the task force wants to see other ARPA money dedicated to increasing the transitional and long-term housing stock for people experiencing homelessness, and for funding permanent supportive housing for people experiencing homelessness. It suggests that lawmakers examine how short-term rentals have affected the affordable housing market across Colorado, as well.

The report wants the state to develop a "statewide strategy for homelessness prevention and resolution that is responsive to and takes into account unique local community needs."

Finally, the report calls for the establishment of a longer-term committee or task force that focuses specifically on housing and homelessness, "in the same way that you have an energy and environment committee or a transportation committee. We should maintain those conversations and not have this task force be that one thing we did that one time," Gonzales says.

"I’ve seen for myself the way that access to affordable housing meant that I could continue to live in the community I loved while I saw my friends get pushed out of north Denver when they were renters," she concludes. "I’m really excited."