Throughout Colorado, the cost of living, particularly housing, has exploded, and this is true across the income spectrum for low, to moderate, to high incomes, and touches every corner of the state, from urban, to rural, to rural resort.
This cost explosion is a crisis in our communities, and is driven by a lack of supply across every price point and building type. The economics of housing development leave us with a steady, albeit constrained, stream of market rate and luxury products, with little development oriented toward households of low and moderate means. In many communities, this dynamic results in a significant number of households who earn too much to qualify for affordable housing, but not nearly enough to afford market rate housing.
Thankfully, there is a new and parallel way forward. In addition to our steadfast commitment to serving low-income Coloradans, the state Legislature has created new pathways and resources, such as House Bill 1271, which created the Department of Local Affairs Innovative Affordable Housing Strategies program, establishing moderate income housing developments as an eligible use. After significant demand for the program, the Legislature expanded its investment via House Bill 1304, State Grants Investments Local Affordable Housing, using American Rescue Plan Act funding.
Concurrently, the Legislature invested $25 million to expand the Middle Income Access Program, administered by the Colorado Housing Finance Authority via Senate Bill 146. Then, in keeping with our pioneering spirit, the Legislature launched the state’s first Middle Income Housing Authority pilot program through Senate Bill 232, and, this year introduced the nation’s first middle income housing tax credit via House Bill 1316.
These initiatives are all designed to increase the availability of housing that serves Coloradans at income levels that traditional affordable housing cannot and the market has not.
These strategies compliment and grow traditional lower income housing strategies in order for our state to sustain economies and diverse communities for the long term. Focusing solely on one end of the housing continuum has left a growing gap in the middle-income segment, making housing rare and unaffordable for essential hometown workers such as social workers, nonprofit professionals, snowplow drivers and first responders.
It’s our belief, based on our collective experience, that existing housing needs assessments may not provide the level of analysis we need to determine what Area Median Income housing is needed in a community. Currently, cities rely on housing needs assessments to develop policies and strategies. These documents tend to rely on categorization of Area Median Income limits, which favor single earners, neglecting the realities of dual-income households. This oversight raises a fundamental question: Do these growing households deserve affordable housing?
They do. And the solution lies in creating publicly owned mixed-income developments that can adapt to the evolving needs of Coloradans.
Shifting from theoretical figures to the real world, consider Summit County, where the median price for a single-family home exceeds $2 million, and the median rent for a one-bedroom apartment surpasses $2,300. This is unaffordable for virtually everyone living or working there. While LIHTC facilitates construction through powerful tax incentives, this approach by design excludes many, if not all, Summit County residents from the pharmacist to the nonprofit professionals, all of whom help sustain Colorado’s third-largest county economic engine.
Creating affordable housing is hard work and those tasked with developing and funding housing policy face varied challenges in addressing supply. Some communities have developers capable of building diverse housing types, while others do not. Certain communities have teachers earning below 80% of the Area Median Income, whereas others do not. But for communities to address their unique housing challenges effectively, flexibility is crucial.
Contrary to some reports, funding middle-income housing does not divert resources from low-income housing, and they are not in conflict with one another. As the primary source of affordable housing funding, the LIHTC is highly competitive and constrained by private activity bond caps.
Because of demand exceeding the amount of annual available tax credits, LIHTC projects often face a two- to three-year funding process, meaning without middle-income housing development in the interim, no new affordable or middle-income homes are brought to market. Middle-income housing can attract substantial private capital, traditionally allocated to market-rate projects, into the affordable housing sector to help create greater housing abundance.
Publicly owned middle-income housing benefits all Coloradans. With complimentary investments in middle-income affordable housing, Colorado communities now have options available to them to facilitate the creation of housing at price points accessible to all individuals and families of all incomes. Everyone deserves an affordable home, and working together we can deliver them.
Jeff Bridges lives in Greenwood Village and is a state senator for District 26, which includes Jefferson, Denver and Arapahoe counties and serves as a nonvoting member of the Middle Income Housing Authority. Tamara Pogue lives in Dillon and has been a Summit County commissioner for four years and serves as vice chair of the Middle Income Housing Authority. Peter F. LiFari lives in Denver and is the chief executive officer of Adams County-based Maiker Housing Partners and serves as chair of the Middle Income Housing Authority.
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Publish date : 2024-08-15 08:12:00
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