Gov. Polis proposes plan to build more housing as units for low-income Coloradans disappear

By Robert Davis

Gov. Jared Polis unveiled a new plan that they say will help Colorado build more housing as the number of units that are affordable for Colorado’s lowest income earners continues to disappear.

Photo: Brandon-Griggs/Unsplash

Known as Create More Housing Now, the plan seeks to reduce regulatory burdens for homebuilders and incentivize local governments to build more multifamily housing. The plan already has support from local business organizations like the Denver Metro Chamber of Commerce and nonprofits like the Denver Teachers Association and the Neighborhood Development Collaborative.

“By cutting red tape, legalizing more housing choices, strengthening property owners' rights, and planning for future growth, we can create more housing at a lower cost in Colorado communities near where people work or play,” Polis said during a press conference on March 22.

Colorado’s previous attempts to spur more housing development have primarily revolved around increasing supply-side incentives like establishing an affordable housing tax credit and making state-owned land available for redevelopment. Colorado has also established a revolving loan fund to support the development of affordable housing and created multiple state grants for the same purpose.

But Colorado has also increased regulations surrounding the demand side of affordable housing. For example, the state created the Colorado Middle Income Housing Authority in 2022, which requires developers to set aside affordable units in new developments. Lawmakers also established a fair housing unit in the Attorney General’s office and extended additional fair housing protections for veterans and people enlisted in the military.

Polis’ plan seeks to marry these two approaches by creating a single framework that municipalities can manipulate to meet their housing needs. However, the plan would also preempt the efforts of some of the state’s largest cities like Denver, Colorado Springs, and Aurora. These communities would be required to allow the construction of “middle housing” developments like multiplexes with up to six units and allow accessory dwelling units in all residential neighborhoods.

“We need to allow property owners the right to build different types of housing like ADUs, duplexes, and triplexes to increase our housing stock and make housing more affordable while also respecting the character of local communities,” said Democrat Rep. Steven Woodrow of Denver.

The new plan was unveiled at a time when housing affordability for Colorado’s lowest-income workers has hit an all-time low. New data from the National Low Income Housing Coalition shows that the metro Denver area has lost more than 16,000 units that were affordable for people earning 50% of the area median income or less, since 2017. That means these units were affordable for individuals making a salary of roughly $41,000 per year up to a family of six earning $68,000.

Those tides may be getting rougher for some low-income earners despite Colorado’s softening housing market. The latest data from the Colorado Association of Realtors shows that the median sales price for a single-family home declined by 3.4% year-over-year in February to around $530,000. However, townhomes and condos saw their median price climb by roughly 4% over the last 12 months up to $415,000 in February.

“Every Coloradan deserves a safe and affordable place to live, and this proposal will allow us to create a smart, holistic approach that will expand the menu of housing options families and communities are able to choose from,” said Senate Majority Leader Dominick Moreno, D-Commerce City. “Working Coloradans are tired of being priced out of where they live. This bill will cut red tape and expand our housing supply to make sure more Colorado families have a place to call home.”