As explained, the bill would use $50 million to help promote more developments of affordable homes that are for sale.
A bill that will be introduced at the start of Colorado’s Legislative session on Wednesday intends to use $50 million in existing state funding for affordable home ownership-focused projects, as lawmakers in Denver balance a desire to address affordability and what is currently estimated to be a $750 million budget crunch.
Sen. Dylan Roberts, who represents Senate District 8, which includes Routt County, said Monday that the bill, called “Driving it Home,” was worked on with groups on the Western Slope including Habitat for Humanity.
“Affordability and tackling the rising cost of living that particularly impacts rural and mountain communities is a top priority for us,” Roberts said, referring to fellow Democratic lawmakers on a press call on Monday. “We want to put a focus on people being able to buy a home in Colorado by bringing down those construction costs and making those projects more attractive to developers.”
According to a summary of the legislation from Roberts, the bill would create a pilot program with $50 million in already allocated dollars in an effort to provide low-interest construction and acquisition financing to developers. This aims to reduce the total development cost.
The summary says the bill would help support 175 to 200 new homeowners initially. After five years, the bill would create a revolving loan fund that is estimated to help originate around 200 mortgages each year in perpetuity, according to the summary.
Mortgage financing would be available to qualifying households making under 120% Area Median Income, or AMI. In Routt County, 120% AMI is just over $100,000 a year for a single person or nearly $143,000 a year for a family of four, according to the Colorado Housing and Finance Authority.
The summary says the bill hopes to drive affordable homeownership opportunities in a similar way to how Low-Income Housing Tax Credits have helped fuel the development of affordable rental housing.
“There is not a lot of financing available at all, but it’s heavily tilted toward the rental market and there’s not a lot of financing available for homeownership,” Roberts said. “A healthy mix of homeownership and rental is how you kind of keep a workforce in a community.”
Roberts said he didn’t anticipate this bill would pit rental project proposals against ones looking to sell new units, rather that it could help a project get off the ground in general. The funding could also be paired with other sources as well, Roberts added.
“This is also something that could help smaller projects, you know, a couple units rather than the larger projects that you kind of hear about more these days,” Roberts said. “$50 million can go a long way, certainly more than a few projects.”
As currently drafted, Roberts said the bill does not require any specific ongoing affordability measures, such as a deed restriction. Still, that doesn’t mean projects that include plans for maintaining affordability into the future wouldn’t be looked at more favorably to receive Driving it Home dollars.
“Our thought is that we don’t want to dictate that from the state level,” Roberts said. “Each individual community across the state can decide how to facilitate that.”
Roberts said he intended to introduce the bill when the legislative session starts on Wednesday.
Another housing bill in the works would reform construction defect liability for developers, a proposal that Roberts said passed the State Senate last year but failed in the House.
“There just not a lot of condos being built in Colorado right now because the liability insurance is so high,” Roberts said. “The thought is that if we can do some construction defects litigation reform, we can help address those insurance costs.”