Prop 123 seeks funding fix to ease Colorado’s affordable housing crisis

Carbondale resident Heidi Eyestone sits just inside the van she once lived in before finding housing.
Chelsea Self/Post Independent

The cost of housing has skyrocketed in Colorado since the beginning of the pandemic, making Colorado unaffordable for many residents; Proposition 123 aims to solve that problem statewide. 

“The real challenge here is we need more supply of housing,” said Mike Johnston, campaign backer and former member of the Colorado Senate. “We’ve built 40% fewer units in Colorado over the last 10 years than in the decades before that, and one of the reasons why prices are going through the roof is because we don’t have enough supply.” 

The increased cost of housing has affected not just lower-income or middle-class residents, but even upper-middle-class residents here in the Roaring Fork Valley.

A signature-led Proposition 123, or “Make Colorado Affordable” initiative, plans to bridge that gap by using TABOR refund money to finance affordable housing throughout the state.

Since 2020, the average rent for a one-bedroom house has increased by 30%.

To live comfortably with quality of life, housing advocates say the cost of rent should not exceed more than a third of a person’s average monthly income. 

“If you’re making $40,000 a year as a teacher or a nurse, a third of your income would be $12,000 here,” Johnston said. “That’s $1,000 a month.”

According to Garfield County Economic Development demographics, 38% of residents are in the low-wage earning group ($21,700 to 37,800); 33% are in the mid-wage range ($44,000 to $56,800); and 29% are considered high-wage earners ($58,500 to $96,500).  

But, for much of the middle and working class in the state, people are being forced to pay more than half of their monthly income for the lowest rental price points in their area. 

Valley impacts

The competitive nature of the market combined especially with lack of supply to match demand in the Roaring Fork Valley and Garfield County has caused people to be pushed aside and forced out, inching people closer to homlessness than they ever expected. 

One local resident who came here from Montana, Heidi Eyestone, would balance the cost of rent by spending the summers living in her van until around the pandemic when it became more impossible to find housing. 

“For a while I tried, and then I just kind of gave up the last couple years,” she said. “I kind of just got sick of getting my hopes up. It’s a lot harder to move back in my van when I didn’t intend on it.”

Property-management companies are able to take advantage of the system and deny lease renewal for the sole purpose of hiking rent annually and charging new tenants more.

“We were given notice that we were just not going to be allowed to renew the lease,” local renter John Rogger said. “They provided zero rhyme or reason.”

He said when his roommate asked the property manager why, she snarkily replied that she did not have to give a reason why.

Many solutions have been proposed over the years, as solutions for Colorado’s affordable-housing crisis aim to affect the free market, like repealing Colorado’s statewide ban on rent control from 1981. 

“This is focused on guaranteeing that those people under this new measure wouldn’t ever have to pay more than 30% of their income to rent or mortgage,” Johnston said.

The proposal

After a couple years of planning, a petition with more than 230,000 signatures and support from numerous groups and nonprofits throughout the state, Proposition 123 was officially placed on the ballot to fund affordable housing across the state, without adding additional taxes or affecting the growing economy. The initiative would take TABOR refund money to fund an estimated $300 million in affordable housing for the state. 

“This puts $300 million a year into affordable housing without increasing taxes, without cutting other priorities in the general fund, and people still get their tax refund,” said Johnston, who is president and CEO of Gary Community Ventures. 

“This was for people who are TABOR purists,” he said. “This was exactly what TABOR asked us to do. TABOR didn’t say, ‘You can never spend money on issues that are a crisis in the state’; it just said ‘You have to ask the voters for their permission,’ and that’s exactly what we’re doing.”

People would not lose a TABOR check, just a small portion.

The details

“What the legislative council has said in the blue book was that their projection is, in the worst-case scenario, in a year like this, you would still get a $710 tax refund, and about $40 would go to housing. You’re still getting 93% of your tax refund back, and that’s the worst-case scenario,” Johnston said. “There’s a lot of scenarios in which there would be no impact on your tax refund.”

If passed, the proposition will allow anyone from development companies to full counties and municipalities to apply for the funding, as long as it is used to create more affordable housing for people who live at or below 120% area median income. 

“That’s about 60% of the state who would be eligible,” he said. “Anyone who is eligible, up to 120% of area-median income, and that varies from community to community, but that’s usually somewhere around $100,000 to $120,000 a year of income.”

In Garfield County, 120% AMI is $79,200 for 2022, according to the United States Department of Housing and Urban Development. Glenwood Springs and Carbondale have a higher AMI average.

“I think that’s why we have so many people in support, and nobody opposes this,” he said. “This provides dollars to local municipalities with flexibility for how they want to use them, with some of the most innovative financing strategies in the country. You know, we are doing things that no other state has done before.”

The initiative also requests a 3% increase in affordable housing from current affordable housing stock that will stay at that number for 10 years. 

“We think that’s completely doable and should be the expectation for taxpayers and committee members who want to see some action on this,” Johnston said.

Garfield County would be required to create 60 to 70 new units per year with the affordable-housing stock the county has, he said. 

“They have a one-year timeout; all the projects that they’ve funded the last three years continue to be funded, then they can re-apply again in year five, so they can still get funding for five out of every six years for projects, even if they fall short of the targets,” he said.

The model is also built to promote local economic growth while providing affordable housing for local residents by making the Colorado Housing and Financial Authority the owner and investor on the project. 

“It’s actually benefiting the residents who live here and not benefiting out-of-state investors anymore,” he said. “Instead of the money being pulled out of Colorado and given to wealthy out-of-state investors, those dollars are re-invested back into Coloradans in the form of reduced rents and in the form of this renter wealth building.”

Johnston said the bill was aimed to be a win for all parties in Colorado.

“We have the great privilege of having about 200 organizations in support, and we have no organized opposition at this point,” he said. “We just did a couple of town halls last weekend where for town halls, they’ll always invite a proponent and an opponent … they can never find anyone to come and represent the opponent side because, right now, no one is opposed to it.”

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