DENVER — A new state program aims to put money back in the pockets of renters who pay their rent on time.
State leaders say the Colorado Renter Rewards Program is the first of its kind in the nation. One of the major benefits is tenants in the program who pay their rent on time will earn 2% of their rent payment in cash back each month through the Stake app.
“It allows people in low and middle income units to get rewarded for doing again, what they're already doing, which is paying their rent on time, so that they can build savings over time, long term savings that can make a real impact on their lives,” Executive Director of Colorado’s Office of Economic Development and International Trade (OEDIT) Eve Lieberman said. “So many renters across Colorado are barely getting by, and so when you're talking about getting that monthly cash back with savings over time and building a stake in the equity of a property that helps create financial stability for renters.”
Other financial benefits of the program include free credit reporting, a nontaxable annual savings match of up to an additional 2% of a tenant's rent if they save their cash back payments, and the opportunity to receive annual equity distributions for those paying rent on time for over a year.
To be eligible for the program, renters have to live in properties funded by Proposition 123 Equity Program.
Proposition 123 was approved by voters in 2022. It created the State Affordable Housing Fund, which feeds the equity program.
60% of the funds from the ballot initiative go to OEDIT, and the other 40% goes to the Department of Local Affairs (DOLA). OEDIT added that the renter rewards program is a “Tenant Equity Vehicle” (TEV) funded through Proposition 123.
"We grow the Prop 123 equity projects that they're financed through our office, that means there's more projects online that tenants can partake in," Liberman said. "So it's just gonna it's going to build over time. We're funded through a ballot initiative with annual distribution from the Colorado General Assembly. So as long as we are able to create more projects, more tenants will be able to receive those savings."
Proposition 123 dedicates 0.1% of the state’s income taxes each year for affordable housing projects. So this rewards program does not create any kind of new tax or tax increase.
“At OEDIT, we have three different financing programs that was approved under Prop 123 so equity is one of the financing programs that we implement, but we work really closely in partnership with the Colorado Housing Finance Authority and then on this particular program,” Lieberman explained.
The program could result in fewer TABOR refunds for taxpayers, though.
Fall River Village in Estes Park, which is owned by the Estes Park Housing Authority, is the first property to be a part of this rewards program.
As of last Friday, Fall River Village already have nine renters signed up for the program. The community hopes having this financial tool empowers renters.
“Anyone living at the property can achieve real financial gains. They're not huge, but every little bit can help,” Executive Director of the Estes Park Housing Authority Scott Moulton said. “We know that we certainly continue to have housing needs in our community, and the ability to provide additional funding sources to affect positive change in housing will be necessary for quite some time.”
He said this program can be a real gamechanger for renters as it grows.
"If the property or if the program itself can gain a good foothold and perform well over decades, hopefully, then a lot of renters in our state can see those benefits and hopefully reap some financial gain and reward from renting from an eligible property,” Moulton said.
As for his hopes for Proposition 123 he said that funding source remains stable and can continue to offer either acquisition opportunities or new development.
Renters at Fall River Village can sign up for the program as long as they are living at the property. There is no hard deadline to enroll.
There are no restrictions on how renters use their cash back payments. Moulton gave examples of uses like putting money away for an emergency fund or for future financial goals.
Denver7 did ask OEDIT when other properties that fall under the Proposition 123 Equity Program could see this rewards initiative implemented.
"We are using prop 123 equity financing to help build projects across Colorado, from Longmont to Colorado Springs to Pueblo to 1600 Pearl Street is a project that's already been identified in Denver that has units that will be eligible for this program once it's completed," Lieberman said.
She added, it is hard to know when these affordable housing projects would be completed.
"But once it's completed, and the tenants are in the project, they can expect to get cash back and long term savings rewards," Lieberman said.
