CAR works to build foundation of affordable housing solutions during 2019 legislative session
DENVER – With affordable housing concerns topping the list of priority issues for many Colorado residents, the Colorado Association of REALTORS® collaborated with diverse stakeholders throughout the 2019 legislative session to make significant strides focused on short- and long-term housing solutions for communities across our state.
The Association’s Government Affairs Division, led by Elizabeth Peetz, is working cooperatively with more than 80 stakeholder organizations and business leaders across the public and private sector, political leaders from both sides of the aisle and countless others to support key statewide legislation aimed at expanding and improving affordable housing solutions and economic growth in the decades ahead.
“Housing affordability has become out of reach for Coloradans, especially our critical civil servants and working middle-class,” said Peetz. “We need to move beyond thinking about housing affordability and affordable housing as simply two troubling phrases and start thinking about housing solutions across an entire spectrum. Whether it’s a vulnerable subpopulation where supportive housing is necessary to meet basic needs, a new family looking to invest in their future, the companies we look to retain and recruit to our state for economic growth and services, or our senior citizens whose needs are changing as they retire, everyone is going to need better solutions.”
Building on the successful efforts in reforming construction defects laws in 2018, the Association is continuing its drive at the Capitol to advocate for sound, market-based affordable housing approaches and laying the foundation for 2020 legislation that will build upon that base.
The following 2019 bills represent meaningful solutions that are key to addressing the state’s lack of affordable housing:
- HB-1322 – Expand the Supply of Affordable Housing
Establishes a new state fund in the Division of Housing to provide sustainable funding for programs and projects that improve, preserve, or expand the supply of affordable workforce housing in Colorado. Revenue sources include General Fund, Unclaimed Property Trust Fund, Marijuana Cash Funds, and Gifts, Grants and Donations.
- HB-1319 – Flexible Funding Opportunities and Incentives for Developers
Creates two policy changes to support private and nonprofit developers in initiating financing and building affordable housing projects. Affordable housing developers are having difficulty obtaining financing from lenders because the claw back gives lenders too much restrictions.
- Requires an inventory of Public Lands Suitable for Affordable Housing Development.
- Limits claw back of property tax exemption fund for affordable housing projects to enable lenders more ease to finance projects.
- HB-1228 – Expansion of Low-Income Housing Tax Credit (LIHTC)
Raises the cap of total allowed state tax credits for the program from the current $5M to $10M. And raises private sector equity needed to support the development and preservation of affordable housing.
In addition, the following bills have also been identified as critically important to the state’s ability to address affordable housing this year and are in need of strong support, according to Peetz.
- HB-1075 – Tax Credit Employer Assisted Housing Pilot Program
Creates a pilot tax credit for donations to nonprofit sponsors of employer assisted housing projects in rural areas of the state with a maximum of $400 for the credit.
- HB-1245 – Affordable Housing Funding From Vendor Fee Changes
Increases the state vendor fee and allocates the additional funds to the development of affordable housing
With significant strides being made in the 2019 legislative session, CAR is also focusing its efforts on key bills and initiatives for the 2020 session including expansion of the First Time Homebuyer Savings Account.
Well received and achieving strong initial results, CAR will be introducing legislation in 2020 that expands the Colorado first-time homebuyer savings account program to give employers an opportunity to match their employee’s contributions to their own savings accounts as a near-term device enabling both the employer and the employee to pitch in and contribute money faster to save for that first home purchase.
Many of the current and planned initiatives and legislative policy have come from the results of a 50-state Housing Innovation Report, commissioned by CAR, designed to identify the most innovative and successful programs being implemented to address the full spectrum of housing issues facing communities across the United States.
From affordability and product type to inventory needs, the CAR report set out to help identify what state and local governments, public and private businesses, and individual communities are doing to tackle a broad range of issues impacting nearly every state.
The analysis revealed a growing list of creative ideas and programs coming from collective partnerships and non-traditional partners working towards a common goal.
“Housing is one of the ways that we can bridge gaps and build strong communities,” added Peetz. “So, our challenge is to be bold, to bring the unorthodox and creative new ideas to the table. Homeownership is the American dream, so it’s time that we think about how to protect and enable that dream to be a reality for everyone.”
Other key facts and factors driving affordable housing policy recommendations for CAR include:
- Since 2011 housing costs have risen by more than 40% while wages have risen by just 11%.
- Average HUD calculated Fair Market Rent for a two-bedroom apartment in the Front Range metropolitan areas is just under $1,500/month. A household must earn over $60,000 annually or almost $30/hour to afford this rent. The estimated average wage for a renter is $17.59/hour.
- Outside the metropolitan area, the average rent for a two-bedroom apartment is $976/month. To make this affordable, a household must earn an hourly wage of $18.77/hour (or $40,000 annually). The estimated average wage for a renter in non-metro areas of the state is about $13/hour—well below the hourly wage needed to afford the rent on a two-bedroom apartment.
The market is not building homes that are affordable to many Coloradans
- As of the most recent HUD data, 275,000 Colorado households were spending more than half their income on their mortgage or rent. This includes over 162,000 renters.
- Over 6000 households on the Eastern Plains, 9000 households in the Central Mountains and 32,000 on the Western Slope are weighed down by the cost of housing.
Healthy Economy Requires a Healthy Housing Market
- Thriving communities have a range of housing options for people across the income spectrum. These communities are more appealing to businesses looking to relocate and to families looking to put down roots. Home construction provides an economic boost for communities.
- More affordable housing options in rural Colorado would help attract teachers and health care professionals.
- Affordable housing supports the larger economy. If housing were more affordable for the thousands of Coloradans paying more than 30 percent of their income on housing, there would be a $2 billion boost in spending on food, clothing, health care, recreation and other household expenditures. This spending could support local businesses and contribute $89 million in additional sales tax for important public services.
Housing that is Affordable Provides a Platform for Long-Term Stability
- Reduces housing instability, and homelessness – – Families that can afford their housing costs are more stable, their children do better in school, and they can save for emergencies, education and retirement.
- Reduces poverty and the impact of poverty on children – – Reducing the rent burden in low-income families frees up more resources for children and results in better outcomes.
- Reduces health care and other public services costs – – The provision of affordable housing decreases Medicaid expenditures and use of emergency services and increases use of primary care to improve health. The health impacts of stabilizing housing also improve mental health.
Source: Colorado Center on Law & Policy
“Working with a group of dedicated and creative stakeholders across our state, we’ve made significant strides in this current legislative session and we’re excited about taking the next steps to continue to refine and grow the programs and meaningful housing solutions for all Coloradans in the years to come,” said CAR CEO Tyrone Adams. “This is Colorado’s opportunity to cultivate and execute innovative ideas and to increase the supply of housing and diversity of housing options to meet the demands of our citizens and our businesses.”