https://www.theepochtimes.com/colorado-looking-to-fund-equity-and-affordable-housing-programs-by-reducing-tax-refunds_4801647.html

In September, the average sales price for a single-family home in Colorado was almost $670,000. That’s a number most first-time home buyers and lower-income families find difficult to swallow.

As a result of Colorado’s sky-high housing costs, state legislators have taken measures to increase affordable housing.

But Nov. 8 is the first time Colorado voters get to voice their opinion on the matter by either voting for or against Proposition 123, “Dedicate Revenue for Affordable Housing Programs.”

If passed, the measure will set aside tax revenue for affordable housing projects in Colorado and exempt the income from Colorado’s constitutional revenue limits, called the Taxpayer’s Bill of Rights, or TABOR.

But in exchange for the dedicated funds, Proposition 123 will reduce future tax refunds to Colorado residents and instead go towards government programs, like the one for homeowners to share home equity with their tenants.

Colorado’s Housing Problem

According to the latest U.S. Census Bureau data, from 2010 to 2020 Colorado’s population increased by 14.8 percent. In comparison, the national population increased by 7.4 percent.

If the state’s housing projects had kept pace with the increase in population, Colorado might have avoided a housing crisis. Instead, the rapid growth caused housing prices to skyrocket as demand quickly outstripped supply.

In September, the Common Sense Institute reported an estimated housing unit shortfall of 93,000 to 216,000 units.

Also in September, the Colorado Association of Realtors released its statewide report that found the year-to-date median sales price for a single-family home in 2022 was $570,000—an increase of almost 14 percent from the same time last year. As a result, housing affordability decreased by 32.4 percent.

Auburn Ridge Senior Apartments in Castle Rock, Colo. The 90 units of affordable housing serve a mix of incomes, and have paved the way for more affordable housing in Douglas County. (Housing Colorado)

That decrease in affordability impacts all would-be home buyers but has a more pronounced impact on first-time homebuyers and lower-income families.

Consequently, Colorado lawmakers proposed and passed several affordable housing initiatives, including Colorado House Bill 21-1117 “Local Government Authority Promote Affordable Housing Units,” and Colorado House Bill 21-1271 “Department of Local Affairs Innovative Affordable Housing Strategies.”

Additionally, Colorado allocated more than $1.2 billion from the federal American Rescue Plan Act of 2021 for affordable housing and services.

Proposition 123 differs from the above laws because it’s the first time Colorado voters get to decide on an affordable housing initiative. It also requires voter approval as it impacts the taxpayer bill of rights.

Proposition 123

According to Colorado’s 2022 state ballot information booklet, Proposition 123 sets aside 0.1 percent of taxable income each year to address affordable unit production shortfalls.

That equates to $145 million in the 2022-2023 budget year and $290 million after that.

Colorado’s government will use the money to create six separate government programs focused on “higher density, environmentally sustainable projects serving households with a range of income levels.”

Epoch Times Photo
The High Mar Senior Community is a 59-unit affordable apartment community for seniors and is the first senior community built in Boulder, Colo., in more than 30 years. (Housing Colorado)

The program to receive the most money under Proposition 123 is “Affordable Housing Equity.”

Specifically, it would set aside between $69.6 million and $121.8 million for just that program and provide renters with “a share of the money made on the development, called a tenant equity vehicle.”

The renter could then use that money on the future purchase of a home.

Additionally, if passed, Proposition 123 would be a “voter-approved revenue change,” meaning the measure would allow the state to keep tax revenue exceeding the TABOR limit, reducing the amount returned to Colorado taxpayers.

In 2022, Colorado taxpayers received a 2021 TABOR refund of $750 for individuals and $1,500 for joint filers.

Arguments For and Against

Colorado legislators have dedicated billions from the American Rescue Plan and passed several laws to increase affordable housing in Colorado, but proponents of Proposition 123 argue that the government isn’t “doing enough to keep Colorado affordable,” and the proposition will address that lack.

They further argue that Colorado’s housing and rent prices “make it too hard for many households to afford rent or to buy their own home,” and the proposition will make it easier.

Conversely, opponents of Proposition 123 argue that the measure does nothing to “address the underlying causes of high housing costs” and that passing it could worsen housing prices by “pumping money into the market.”

Opponents also point out that, in their opinion, the “measure is unnecessary and will reduce Coloradans’ future TABOR refunds,” as the state has already passed several laws to address affordable housing and set aside money from the federal stimulus funds.

For taxpayer impacts, Colorado’s 2022 booklet states, “Based on the number of income tax returns for tax year 2018, Proposition 123 is estimated to decrease the amount returned by $43 per taxpayer in tax year 2023 and $86 per taxpayer in tax year 2024.”

Katie Spence

Follow

Katie covers energy and politics for The Epoch Times. Before starting her career as a journalist, Katie proudly served in the Air Force as an Airborne Operations Technician on JSTARS. She obtained her degree in Analytic Philosophy and a minor in Cognitive Studies from the University of Colorado. Katie’s writing has appeared on CNSNews.com, The Maverick Observer, The Motley Fool, First Quarter Finance, The Cheat Sheet, and Investing.com. Email her at katie.spence@epochtimes.us

You Might Like
Learn more about RevenueStripe...