Taskforce unveils final $400 million affordable housing plan
By Robert Davis
Photo: Jakob Rosen/Unsplash
A legislative task force released its final recommendations to the General Assembly last week which lays out how lawmakers should spend the more than $400 million in federal relief funds Colorado received to address housing affordability.
The Affordable Housing Transformational Task Force – which is comprised of state lawmakers, nonprofit organizations, and housing developers – recommended creating new revolving loan funds, supporting nonprofits with more grants, creating new building incentives, and strengthening existing programs.
“The lack of affordable housing here in Colorado is nothing short of a crisis, and our Task Force has been working tirelessly to find solutions so that more Coloradans have a safe, affordable place to live,” said Sen. Julie Gonzales, D-Denver, who was the vice chair of the task force.
The pandemic not only put new pressures on Colorado’s housing market, but it also exacerbated many long-standing issues that lawmakers have not addressed.
For example, economists at the Federal Reserve Bank have said that lockdown orders help fuel demand for housing as families were forced to spend more time at home. As a result, home prices in Colorado have soared over the past two years. Data from the Colorado Association of Realtors shows that the average sales price for a single unit home stood at $653,427 in December 2021, representing an 18.7% increase from 2020.
Meanwhile, CAR’s “affordability index” – which compares the state’s average wage with its average home price – fell by more than 21 percentage points from 90 to 71. The index defines affordable markets as those measuring at 100 points or better. This means that the average wage in Colorado is only 71% of what is needed to purchase an average priced home with a mortgage.
Adding to these issues are the fact that Colorado has not been building enough homes to keep up with the growing demand over the last decade. Colorado’s homebuilding activity dropped by nearly 40% between 2010 and 2020 while the state’s population grew by nearly 15%, according to the task force report.
The mismatch between housing supply and demand has also eroded the number of affordable units for low-to-moderate income earners. For example, state data shows that more than 300,000 units have been deemed unaffordable over the last decade for families making up to $45,000 per year.
Against this backdrop, the task force proposed a people-based definition of housing affordability rather than one that is market-based. This would include ensuring that individuals don’t pay more than 30% of their income on housing and developing new units that are responsive to communities and different cultures.
To that end, the task force recommended funding a revolving loan fund with between $150 million and $222 million. The revolving fund would support projects that preserve units, develop new ones, and create non-traditional housing opportunities in diverse geographic communities.
“This is a once-in-a-lifetime opportunity to address the root causes of our affordable housing issues,” Gonzales said.
Another solution the task force proposed was to spend up to $222 million on grants for nonprofit organizations and local governments. These funds are meant to help acquire land for new developments as well as housing navigation services and rehousing support.
The report also recommended expanding land banking opportunities to preserve homes in low-income communities and existing programs designed to impact missing-middle and workforce housing. This would include creating resident-owned communities in some mobile home parks.
“From more affordable and attainable workforce housing across the state to new factory-built homes and the jobs that come with them, and much more, our investments will mean many more Coloradans have access to an affordable home to own or rent,” said Rep. Dylan Roberts, D-Avon, the task force chairman.