Affordable Housing Bill Passes in Colorado

At the beginning of the month, Colorado voters took action to help address the state’s affordable housing crisis. By approving Proposition 123 by a 52.6% to 47.4% margin, they authorized taking 0.1% of the state’s federal taxable income to create a $300 million affordable housing fund.

The measure had the support of more than 260 organizations across the political spectrum including groups like the Colorado Education Association, Children’s Hospital Colorado, Colorado Association of Realtors, Colorado Bankers Association, Urban Land Conservancy, and Vail Valley Partnerships.

The state’s most populous metro counties approved the measure, including Denver, Arapahoe, Jefferson, Adams, Larimer, and Boulder counties. It also passed in Colorado’s ski communities of Eagle, Pitkin, Summit, and Routt counties.

How does it work?

The measure requires the state to set aside a portion of its budget for affordable housing. Corporations and individuals now pay 4.55 percent of their income in taxes. Voters this month also approved lowering the tax rate to 4.40%.

Under Proposition 123, the state will dedicate 0.1 percent to affordable housing and spend the rest on the state’s other expenses.

This measure would not directly raise taxes. Instead, when residents would receive TABOR refunds, they would be smaller. For example, an analysis shows the refunds would be $86 less per taxpayer in 2024.

The measure will generate $300 million yearly and grow with the state’s economy. Mike Johnston, president and CEO of Gary Community Ventures and a former Colorado state senator, worked to pass the issue. He estimates the program will build 10,000 new affordable housing units each year.

Coloradans at all income levels, from 0% to 120% of area median income, can access housing built through the state’s new fund.

While it could take some time to see the goals of Proposition 123 to come to fruition, it is certainly positive news for those feeling the affordability crunch in Colorado. If you think you’re ready to become a homeowner sooner than later, it could still be a great time. Give Metrowest a shout today – we’d be happy to discuss your options!