Colorado Lawmakers Propose Cutting $130 Million from Affordable Housing Fund

$130 million — that's what's on the chopping block for Proposition 123, a fund dedicated to addressing Colorado's housing crisis. This cut would reduce Prop 123 funding by 40%, with a 75% reduction in funds for affordable rental development. Make no mistake, this will hurt local families on the Western Slope.

The housing crisis is real here — folks around Delta, Montrose, and Grand Junction are struggling to find affordable homes. Employers can't hire because workers can't find places to live. This crisis affects everyone, from low-income families to seniors and workers commuting long distances.

Prop 123 uses a small share of existing income-tax revenue to fund affordable housing projects. It doesn't raise taxes, and it has a mechanism to reduce funds when state revenues fall. In fact, this mechanism has already returned over $100 million to the general fund this year. The program also uses loans and equity investments, which are repaid and recycled to fund future projects.

It's working, all 64 counties, including those on the Western Slope, have opted into Prop 123. In just two years, the program has invested nearly $502 million in 10,377 homes and supported 87,603 households. That's a significant impact, especially considering the program's focus on affordable housing. But lawmakers are proposing cuts, citing a $1.5 billion budget shortfall. However, these cuts would come at a time when Prop 123 is starting to show results. Data from Denver shows that new construction, some of it funded by Prop 123, has driven rent declines of 10% in affordable apartments. That translates to over $2,000 in annual savings for renters with middle and lower incomes.

An economic impact analysis by ECONorthwest reveals that each dollar invested through this program has drawn roughly seven additional dollars of private and federal capital. The report also indicates that awarded funds have supported over 13,000 construction and supply chain jobs, with average wages and benefits of $93,000. These investments are projected to generate between $26 million and $40 million in ongoing tax revenue for the state government.

The community is not in favor of these cuts; a Colorado Polling Institute survey shows that housing and homelessness remain top priorities for Coloradans. These cuts will decrease the state's ability to address the housing crisis, reducing the resources available for affordable housing initiatives.

The short version: cutting support for affordable housing will hurt local families and undermine efforts to address the housing crisis. Read that again - $130 million is a significant reduction, and it will have real consequences for people in the valley.

In the Western Slope, this cut will be felt deeply. Local organizations and developers rely on this program to create affordable housing projects. Reducing the available funds will limit their ability to provide homes for those in need. Worth watching: how lawmakers will balance the state's budget without sacrificing critical programs like Prop 123.

The fact remains, the housing crisis is not going away. In fact, it's getting worse. Cutting funding for programs that are working will only exacerbate the issue. That's what's at stake here, the ability to provide affordable housing for those who need it most. Make no mistake, this is a critical issue that requires careful consideration and a commitment to finding solutions that work.