Sneak peek: Recommended solutions to Colorado’s affordable housing crisis

Lower income requirements for assistance programs, incentives for preservation of existing housing units among preliminary recommendations

By: - June 17, 2021 5:30 pm

A housing building in Denver’s Capitol Hill neighborhood on Aug. 7, 2020. (Moe Clark/Colorado Newsline)

A coalition of housing experts across Colorado has been meeting remotely for the last eight months to brainstorm long-term strategies for alleviating the state’s affordable housing crisis.

The Strategic Housing Working Group, convened by the state’s Department of Local Affairs, reviewed and workshopped preliminary recommendations during a public meeting on Thursday. Once the remaining kinks are worked out, a final report will be presented at the State Housing Board’s public meeting on July 13, and then to state lawmakers during the next legislative session, which convenes in January. 

“What the groups are working on is to create and advise on the best strategies to elevate, act on and maintain momentum for statewide affordable housing and attainable housing,” said facilitator Heidi Aggeler, director of Root Policy Research, a Denver-based community planning and housing research firm. “And things certainly have changed in the eight months that we’ve all been together.”

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Proposed strategies put forth by the strategic housing group span from incentivizing the preservation of existing affordable housing units — which is one-half to two-thirds less expensive than constructing new units — to adjusting income limits and providing gap funding for state and federal assistance programs that fall short of market rate housing prices. 

The preliminary recommendations come in the wake of a historic legislative session, where state lawmakers approved a laundry list of new legal protections for renters and allocated millions in state and federal funds to help bolster affordable housing efforts.

One bill approved this session allows cities and counties to require new rental developments to include some affordable housing units, a policy known as inclusionary zoning. Another bill will fund the creation of a “tool kit” for local governments wanting to implement land use changes to facilitate the development of affordable housing.

Main challenges identified by the group after statewide stakeholder process: 

  • Challenges qualifying for housing assistance for people with criminal records or bad credit, and for middle income households whose income exceeds program thresholds but are still too low to afford market rate housing
  • The negative effect of the housing crisis on employment and economic development
  • Lack of understanding of affordability challenges — and appreciation of needs — among policymakers and residents
  • Priority for people living and working in their communities
  • Concern about community displacement
  • Elimination of naturally occurring affordable housing, including that provided by mobile homes
  • Unique needs of vulnerable populations and importance of supportive services paired with affordable housing

Strategies to build ‘capital and capacity’

On the accessibility side, the group proposed in its preliminary recommendations that the state incentivize developers to create more accessible affordable housing units by funding $5,000 per unit built.

“This would include features that allow limited mobility residents to access units without modifications and have one fully accessible bathroom,” Aggeler said. “So, not a mandate, but an incentive and it would also apply to retrofitted units.”

During the group’s stakeholder process in 2019, it heard concerns expressed from rural communities where local and small nonprofit organizations struggle to scale, finance and complete projects that are desperately needed due to systemic lack of access to resources. 

Some solutions proposed to build “capital and capacity” include providing higher subsidies for these projects; flexible funding sources that could be used to cover pre-development costs; and a pool of on-the-call consultants to help smaller entities navigate affordable housing developments.

Optimizing housing assistance programs, boosting supportive services

A subgroup of the larger strategic housing group looked at how to optimize rental assistance programs such as the federal Housing Choice Voucher program, also referred to as Section 8 housing.

The federal program has been decreasing for decades as rents have increased in much of the U.S., making it harder for tenants to find units outside of high poverty areas, according to the draft report. 

The group recommends allocating funding to “bridge the gap” between what the federal government will reimburse for vouchers and the price of market rents and providing funds to cover the administrative costs for smaller entities that administer the programs.

For example, Gunnison Valley Housing Authority stopped administering Section 8 vouchers after calculating a $40,000 annual loss, according Jennifer Kermode, executive director of GVRHA. The housing authority deemed the program unsustainable due to their size and inability to offset the administrative costs associated with offering the program.

Supportive housing services billed through Medicaid

Other recommendations include offering supportive housing service funds alongside the affordable housing programs so renters can access mental health and addiction services. 

“This is something that advocacy organizations, certainly Colorado Coalition for the Homeless and others, have brought up in the past,” said Jennifer Rodgers, a member of the working group and vice president and market lead for Enterprise Community Partners Inc. 

“What needs to happen is the state would need to ask Medicaid for a waiver or a change in the billing structure in order to allow housing providers to bill for supportive services,” she added. “Sounds like that is the most common model for funding services across the country.”

Other recommendations include expanding direct cash assistance programs for tenants, to help those experiencing a financial crisis or to help lift them out of poverty. The funds could be used for things like auto repair, repaying debt, or purchasing a computer, according to the draft recommendations.

Previous meeting notes and recordings can be found on Colorado’s Department of Local Affairs website.

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Moe Clark
Moe Clark

Moe Clark is a former Colorado Newsline reporter that covered criminal justice, housing and homelessness, and other social issues.

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