Proposition 123 creates a $300 million affordable housing fund

Colorado voters took action to help address the state’s affordable housing crisis earlier this month.

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.

More than 260 organizations across the political spectrum supported Proposition 123, including well-known 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 ballot measure had no formal opposition.

Mike Johnston, president and CEO of Gary Community Ventures and a former Colorado state senator, worked to pass the issue.

“This is a moment in history for Colorado. We’ve never in Colorado history had affordable housing on the ballot before, and I’ve never seen a state make a permanent commitment to try to support building affordable housing with an eye towards permanent affordable housing for generations to come,” Johnston told the Denver Business Journal.

Strong support from metro areas

Voters in most of Colorado’s most populous metro counties approved the measure, including Denver, Arapahoe, Jefferson, Adams, Larimer, and Boulder counties.

It failed in traditional Republican strongholds Douglas, El Paso, and Weld counties.

The measure also passed in Colorado’s ski communities: Eagle, Pitkin, Summit, and Routt counties.

The voters in ski communities also approved new taxes on short-term rentals to generate money for affordable housing. Together the new taxes from vacation rentals could direct up to $40 million a year toward affordable housing in those communities.

How Proposition 123 will 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.

Although the measure doesn’t raise taxes, it could cut the amount of 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 percent less per taxpayer in 2024.

The measure will generate $300 million yearly and grow with the state’s economy.

Johnston estimates the program will build 10,000 new affordable housing units each year.

He’s unaware of any other state with a similar statewide affordable housing measure, but he’s already received calls from other states interested in following Colorado’s lead.

“This is why I think of all the policies that I’ve worked on in the past 20 years, this is the most transformational thing I’ve ever been part of. You’re talking about building 100,000 homes over the next decade to house teachers and nurses and firefighters. We’re talking about helping 10,000 people experiencing homelessness getting off the streets and into housing,” Johnston told the Business Journal.

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

Local governments that opt into the fund must increase their affordable housing by 3% and expedite approvals for affordable housing projects.

The Colorado Housing and Finance Authority will take applications from developers, universities, churches, or other housing providers.

The news and editorial staffs of The Denver Post had no role in this post’s preparation.

Source: Read Full Article