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Legislation tackles affordable housing crisis

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Highlights:

  • Bill tackles affordable housing crisis.
  • Legislation would provide $25 million to affordable housing developers.
  • HB 1384 gets first hearing on Wednesday.

By John Rebchook

More affordable housing, such as Garden Court at Yale Station, is needed. Garden Court  is a jv of Mile High Development and Koelbel and Co.

More affordable housing, such as Garden Court at Yale Station, is needed. Garden Court is a jv of Mile High Development and Koelbel and Co.

A Lakewood legislature has introduced legislation that would bring an estimated $25 million in financial assistance to developers of low-income housing units in Colorado.

House Bill 1384, sponsored by Rep. Max Tyler, D-Lakewood, would also provide funds to help low-income tenants defray high rental costs in Colorado.

Colorado’s affordable housing crisis is imposing a heavy burden on low-income families, according to Tyler.

“Simply put, the affordable housing problem can’t be resolved by the private market alone,” Tyler said on Monday.

HB 1384 will be heard by the House State, Veterans’ and Military Affairs Committee on Wednesday.

The legislation is cosponsored in the House by Rep. Daneya Esgar, D- Pueblo.

Wages have not been keeping up with apartment rents, which are at record highs.

Since 2007, the average rent in the state has increased by 21 percent, but the income for the median renter household increased by only 1.1 percent, according to research released on Monday by the Colorado Center on Law & Policy. The nonprofit group supports HB 1384

The vacancy rate is below 2 percent in some of the state’s most active housing markets, according to the research

In Colorado, an estimated 161,658 households pay more than half of their monthly income on rent – leaving fewer resources for essential s such as food, clothing and transportation and pushing many of these families to the brink of homelessness, according to proponents of the legislation.

House Bill 1384 would invest in affordable housing by drawing one-third of the available balance from the state’s unclaimed property trust fund.

The money would be deposited into a rental housing fund established by the Colorado Housing and Finance Authority for five fiscal years, beginning July 1.

HB 1384 is part of a package of bills intended to address the affordable-housing shortage

Another bill introduced by Tyler, HB 1383, would extend the availability of state low-income housing tax credits available through CHFA.

“Providing grants and loans will give developers more resources to acquire land and build housing units for those who earn less than 60 percent of the median income,” Tyler said.

“In the shorter-term, financial assistance for tenants will help many Coloradans keep a roof under their heads and enable them to devote their limited resources to other needs, such as food, clothing and transportation,” Tyler continued.

He said the bill is structured in a way to provide a big benefit without creating a huge burden on taxpayers or the state’s budget.

“HB 1384 supports private development of affordable housing that will stay affordable in the long-term and gives renters resources to afford housing, without implications on taxpayers or Colorado’s budget,” according to Tyler.

Although a number of federal rental assistance programs help make housing more affordable, those programs only serve a small share of low-income Coloradans who are struggling to pay their rent, according to affordable housing advocates.

Claire Levy, of the Colorado Center on Law & Policy, is an affordable housing advocate.

Claire Levy, of the Colorado Center on Law & Policy, is an affordable housing advocate.

“We’ve got a huge unmet need in the rental-housing market,” said Claire Levy, executive director of the Colorado Center on Law and Policy.

Levy is a former state legislator who was instrumental in developing HB 1384.

“We have no delusions that this bill will solve our affordable-housing problem, but it will provide some much-needed relief for low-income Coloradans,” Levy said.

She added that investing in safe, stable and affordable housing reduces homelessness, housing instability as well as health care and other public assistance costs.

The “astounding shortfall” of affordable housing in Colorado provides challenges for affordable housing organizations, according to Aaron Miripol, president and CEO of the Urban Land Conservancy.

“Due to the lack of state resources for affordable housing acquisition, construction and rehabilitation, ULC and its partners are facing a huge barrier in our work with the majority of our 25 real estate investments lacking the essential funding to produce affordable housing options for communities that need it most,” according to Miripol.

Sara Reynolds, executive director of Housing Colorado, said it is projected that 70 percent of the new jobs created in Colorado over the next 10 years will have starting salaries of less than $36,000 annually.

It takes an estimated $17.61 per hour, or $36,628.80 a year, to rent a market-rate apartment in Colorado. It’s estimated the average renter earns $14.60 per hour, 17 percent below the needed income to rent a typical two-bedroom apartment that carries a monthly market-rate rent of $916.

Affordable housing is a critical issue for Colorado’s economy, and not just for the renters, she said.

“Without investments in housing for working families, we put our continued progress and our economic future at risk,” Reynolds said.

Dick Taft, president and CEO of Rocky Mountain Communities, a nonprofit dedicated to developing affordable-housing projects, said HB 1384 as a step in the right direction.

“Although the funding pales in comparison to the hundreds of millions needed to provide for Colorado’s current shortfall of affordable housing, this bill will expand the impact of the funding Colorado has received over the last four years from the national mortgage settlement, the disaster relief funding and the state housing tax credit,” Taft said.

Have a story idea or real estate tip? Contact John Rebchook at JRCHOOK@gmail.com. InsideRealEstateNews.com is sponsored by 8z Real Estate. To read more articles by John Rebchook, subscribe to the Colorado Real Estate Journal.