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State lawmakers release recommendations for how to address Colorado's housing crisis

Posted: 7:05 PM, Jan 31, 2022
Updated: 2022-02-01 00:57:16-05
Affordable housing

DENVER — Colorado lawmakers have released their recommendations for how to spend $400 million in federal money from the American Rescue Plan Act to help with affordable housing.

The 16-member Strategic Housing Working Group, comprised of lawmakers and industry experts, spent months looking into the state’s housing crisis to try to come up with solutions.

The affordable housing issue in Colorado is not new, but it has gotten significantly worse over the past couple of years with the pandemic, supply chain issues and inflation. Over the past decade, there has been a 40% decrease in the number of homes being built but an increase in people moving here, forcing bidding wars on the limited number of homes available.

“Everybody is sort of facing this problem because we've had a decrease in the production of housing while we've had a 14 or 15% increase in the population,” said Brian Rossbert, executive director of Housing Colorado. “At the end of the day, it comes down to individuals and households and families who are faced with extraordinary burdens when it comes to finding housing.

On Friday, the group released a 42-page report detailing the problems and recommendations for how to spend the federal money.

Since 2019, an estimated 315,000 households in Colorado spent more than 50% of their incomes on housing. The report also found that there are 162,557 households in the state that are considered to be extremely low-income, but only 48,767 units available and affordable to these families.

The report estimates that 325,000 additional housing units will need to be constructed over the next couple of years to accommodate Colorado’s current and incoming residents.

Further recommendations include:

  • Dedicating $150 million to a revolving loan fund to develop and fund low-interest affordable housing. The money would go to constructing new housing but also maintaining current levels of affordable units.
  • Allocating $150 million to a grant program for nonprofits and local governments to provide direct, flexible funding to support their affordable housing ideas.
  • Spending $35 million to invest in resident-owned communities like mobile home parks to build up their infrastructure and keep the area affordable.
  • Spending $40 million on an innovative housing incentive program to support the modular housing industry.
  • Spending $25 million on a middle-income access program to support housing developments for middle class families who generally don’t qualify for federal affordable housing programs.

“What this is going to do is it's going to transform the affordable housing landscape, I think, not only with the money that's going to be put out there that $400 million, but also in the policy recommendations,” Rossbert said.

Democratic lawmakers held a press conference Monday to discuss the report.

State Sen. Julie Gonzales (D-Denver) knows firsthand how hard affordable housing can be to come by. She was able to purchase an affordable condo unit of her own back in 2008 but had to sell her car, get help from her family and apply for down payment assistance to finance it.

All these years later, she knows the problem has only gotten worse in the state.

“So having gone through the process myself and seeing how hard it could be to cobble together the resources to go in and actually buy an affordable housing unit and recognizing that there is so much need and not enough units, we need to build tens of thousands of affordable housing units in order to meet the need that exists here in the state of Colorado,” Gonzales said.

In the short-term, the state has already allocated $550 million to address the housing crisis and help people be able to afford their rent and mortgage.

Gonzales sees this task force’s recommendations as a step toward a long-term, sustainable solution.

“If we just do the emergency, react, assistance without addressing the structural brokenness of our affordable housing crisis, that we would miss a once-in-a-generation opportunity,” she said.

While Republicans participated in the task force, no one from the caucus attended Monday’s press conference.

Sage Naumann, communications director for the Colorado Senate Republicans, tells Denver7 they were invited to attend the press conference but were told none of them would have an opportunity to speak, so they decided to skip it.

“Instead of being there for their campaign photo-op, we decided we wouldn't attend,” Naumann said. “Right now, these are just recommendations. It's just words on paper.”

Naumann doesn’t believe there are enough policy solutions or the right types of policy recommendations in the report to make a long-term impact on the housing crisis.

“The biggest problem is that all this is throwing money at the problem or saying, ‘Look, we have $400 million, let's throw it at affordable housing and see if we can get more affordable units for people,’” he said.

One of the solutions Republicans have put forward is a bill to ban local governments from setting growth caps in their communities.

Cities like Lakewood have implemented limits on how many new housing units can be constructed during any given year.

“A lot of these cities are saying, ‘Hey, we like our city how it is. No more building, no more single-family housing. We're saying you can't do that,'” Naumann said.

The bill will face an uphill battle in the legislature, though.

Unaffordable Housing in Colorado | 360 in-depth dives into the numbers

The report also includes recommendations for potential policy solutions, like considering a statewide building code, adopting a land-use policy, addressing construction defect laws, prioritizing land banking and more.

Democrats expect the first bills stemming from the report’s recommendations to be introduced later in February. They will then begin to make their way through the committee process.