DENVER – A bill that’s headed to the Colorado Legislature could finally offer a solution to a problem that’s growing worse every day: A lack of affordable housing.
Representative Dominique Jackson will introduce a bill this week that would create a statewide fund for investing in affordable housing.
The funding would come from an increase in the documentary fee – a small paperwork charge that the county clerk and recorder collects when you buy a home. The fee is currently one cent for every $100 paid on a property; Jackson’s bill would double the fee to two cents. For a $350,000 home, that would represent a total of about $70.
The bill specifies that money from the fund can be used for two purposes: Assisting in the construction of affordable housing and helping nonprofits and other agencies that provide assistance in buying and financing a home. The Colorado Housing and Finance Authority would oversee the fund.
Paying for housing is a growing problem
The cost of renting or owning in the Denver area has been steadily rising for years and is increasingly out of reach to many. In January, the median rent for a one-bedroom unit in Denver was $1,350, according to ApartmentList.com. If you want to buy, you’re looking at a median purchase price just shy of $357,000.
Disabled Gulf War vet Chris Cline is one Denver resident who has been pushed out due to the high cost of rent. He has a full-time job, but after monthly expenses, he's left with about $600. As a result, he's been living in a 70-square-foot storage unit with his dog for the past two years.
READ MORE: Colorado veteran resorts to living in storage unit due to high cost of rent
Renters can find affordable housing in the Denver area, but there simply aren’t enough units available to meet the demand. Wait lists are so long, prospective renters could be stuck waiting for up to three years to get into housing.
Getting housing assitance is another challenge. Last year, the Denver Housing Authority received more than 22,000 lottery entries for Section 8 housing assistance. Of those, only 300 households were selected.
Building more affordable housing in Colorado would help more than just the lowest-income families. One in four renters in the state is spending more than half of their income on housing and half of renters are spending more than 30 percent, according to Housing Colorado.
“What used to be a problem that was isolated to just low-income families is now an issue that more moderate-income families are dealing with,” Sara Reynolds, Executive Director of Housing Colorado, said.
“It means that [those families] are not going to the coffee shop as often, they’re delaying buying shoes for their children at the local store, and so the ripple effects of these housing costs that are rapidly escalating, without some sort of relief in sight, can really add up and have wide ripple effects throughout the entire community,” Reynolds said.
Organizers at Volunteers of America work with people in housing emergencies. They say they’ve seen an uptick in the number of people who are homeless in the Denver area and though they can rapidly rehouse many of them, it’s getting increasingly difficult to do so.
“It’s dire and it needs action right away,” said Virginia Englisch, Program Manager for Support Services for Veteran Families at VOA’s Colorado branch. “But there’s also creative ways in which people are coming together in our community to problem-solve this issue.”
What is 'affordable' housing?
The documentary fee bill specifies that “affordable” housing projects are those that are considered affordable for renters that make 80 percent or less of the area median income (AMI) and homeowners that make 110 percent or less of the AMI.
Denver’s AMI in 2016 was $56,870. Careers that fall under the 110-percent AMI threshold ($62,557 or less) include IT support specialists, entry-level registered nurses, firefighters, entry-level police officers and auto mechanics, according to the Colorado Department of Labor and Employment.
Though Denver gets the bulk of attention because of its intensely competitive and increasingly expensive housing market, the affordable housing fund would benefit communities in every corner of the state, with the money being invested in housing that's affordable for each community's residents.
Pursuing a solution on Capitol Hill
Housing advocates say Jackson’s bill would bring Colorado into line with what other states are doing to create more affordable housing.
“Most other states in the country have some type of dedicated and permanent revenue source for affordable housing development,” Reynolds said. “Colorado is actually in the minority. We don’t have that right now.”
Housing Colorado is backing Jackson’s bill and Reynolds says it’s high time something is done before Colorado’s expensive housing market starts taking a toll on the larger statewide economy.
“People move here because there are great jobs. However, businesses, when they’re looking to grow their company or perhaps relocate their company, they’re going to look at our housing prices and they’re not going to choose to move to Colorado for much longer.” Reynolds said.
Jackson plans to introduce the affordable housing bill by Friday, March 4.