Facing dire affordable housing situation, Colorado task force works to finalize $400M plan

Most money would go to low-interest loans for developers; grants to nonprofits, local governments

By: - December 15, 2021 5:00 am
housing

A small housing complex in Lyons. (Moe Clark/Colorado Newsline)

The Affordable Housing Transformational Task Force, one of three state panels tasked with finding ways to spend federal COVID-19 relief money, is close to finalizing its recommendations for spending $400 million in federal money on increasing Colorado’s supply of financially attainable apartments and homes.

A tentative plan discussed Dec. 8 came from the task force’s 15-member subpanel, which included representatives of homeless advocacy organizations, housing nonprofits, landlords and developers. Much of what the plan calls for involves loans for affordable housing developers and buyers of existing affordable housing, as well as affordable housing grants directed to nonprofits and local governments.

Lawmakers on the task force helped direct the subpanel’s work and make decisions about which recommendations to include in the plan.

Nothing’s set in stone until long after the task force approves and finalizes a report with funding and policy proposals. Next spring, lawmakers in the Colorado General Assembly will have to vote on legislation appropriating the funding.

When it comes to affordable housing, the situation is dire.

GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX

Across Colorado, there is a shortage of more than 113,000 units for extremely low-income households earning less than $28,790 per year, according to the National Low Income Housing Coalition. That mostly includes households with people who work low-wage jobs, people with disabilities, and seniors on fixed incomes.

Many people who work in the hospitality sector can’t afford to live in the mountain communities where they work, a problem that local leaders say is exacerbated by the recent influx of second-home buyers and short-term rentals.

“We have a lot of small stores, small restaurants that can’t be open because they don’t have employees, and they can’t get employees because the employees can’t find any place to live,” Park County Commissioner Dick Elsner testified during a Nov. 30 meeting of the affordable housing task force. “That goes down to county workers in road and bridge, and our sheriff’s department. … It seems to me a lot of people in the metro area love to have a second home, and they think they can do that through renting it out (as a short-term rental) for a good portion of the year.”

The state’s $400 million for affordable housing came from the American Rescue Plan Act, which Congress passed in March to help states and local governments recover from the pandemic. Following the federal law’s passage, Colorado lawmakers created three task forces to determine how to spend big chunks of the federal money on affordable housing, behavioral health and economic recovery.

We have a lot of small stores, small restaurants that can’t be open because they don’t have employees, and they can’t get employees because the employees can’t find any place to live.

– Dick Elsner, Park County commissioner

The task forces will each publish reports on their funding recommendations before the General Assembly reconvenes in mid-January for the 2022 legislative session.

The funding amounts discussed Dec. 8 are still preliminary and could change, said Brian Rossbert, chair of the task force subpanel and the executive director of Housing Colorado, a nonprofit advocacy organization. Rossbert noted that the task force and subpanel still have meetings remaining before the end of the year.

Rossbert called the funding ranges a “starting point for the task force’s deliberations on funding recommendations that they will be making in their final report.”

Still, they provide a window into what’s coming.

Revolving loan funds

The highest-dollar recommendation of the affordable housing task force would direct between $146 million and $208 million to revolving loan funds for creating new affordable housing and preserving the existing supply. That funding range is based on a document summarizing the funding strategy, which was discussed at a Dec. 8 meeting.

One fund would provide low-interest or “below market” loans to affordable housing developers, helping them build apartments or for-sale homes in communities where the pandemic significantly impacted the housing market. Another fund would provide loans for the purchase of existing affordable apartments and homes, by entities looking to keep those units affordable.

Grants to nonprofits and local governments

According to the Dec. 8 summary, the task force and subpanel believe that somewhere between $110 million and $164 million of the federal money should be used for grants to help nonprofits and local governments add affordable housing and provide cash assistance.

This was a popular strategy for many of the local leaders and nonprofit workers who testified at the task force’s Nov. 30 meeting.

“Mountain migration driven by COVID, limited availability of buildable land, short-term rentals and infrequent or unavailable public transportation have driven our labor force away from our resort communities,” said Avon Mayor Smith Hymes. “The funding that’s made available to us needs to be significant, and it needs to be flexible enough to be tailored to each of our local conditions.”

Property conversion for transitional or long-term housing

The task force recommends the state dedicate $32 million to $48 million to develop housing for those leaving jail, prison, hospitals and homeless shelters. This can be used to buy and convert hotels, motels and empty storefronts into housing.

In her testimony, Eileen Doherty, the executive director of the Colorado Gerontological Society, noted that the Metro Denver Homeless Initiative recently counted 7,000 people experiencing homelessness who were 55 and older. Larger groups of older Coloradans may be on the brink of homelessness.

Doherty estimated that Colorado is home to 25,000 households of retired people living on a monthly income of less than $900 from all sources. An additional 100,000 to 200,000 households in Colorado are living on Social Security payments alone, Doherty said, and earning slightly more than $1,500 a month.

“Currently … there’s very limited transitional housing, which allows people to have a place to be for 24 to 36 months” as a stepping stone to permanent housing, Doherty said. Older adults experiencing homelessness often have complex medical needs, she added.

In addition to funding transitional housing, Doherty also called on the task force to fund programs that would help older adults “age in place” without having to live in a long-term care facility.

Smaller funding streams for housing

Other recommended programs would require smaller amounts of federal money:

  • Resident-owned communities, mobile home parks and land banking: $28 million to $44 million in direct funding for land banks and community land trusts. These funds would also provide support for residents of mobile home parks looking to own their communities.
  • Permanent supportive housing and supportive services fund: $28 million to $40 million for projects that house formerly homeless people and provide supports, such as health care for people with disabilities.
  • Modular housing: $32 million to $40 million to incentivize the construction of pre-fabricated and manufactured homes in areas of the state that lack access to affordable units.

Separate from those funding recommendations, the subpanel will put forward a set of policy recommendations for lawmakers. Those are still under discussion, but so far the most popular ideas include expanding state tax credits to help affordable housing developers finance new projects; updating and expanding a statewide housing needs assessment; and establishing a legislative committee on housing and homelessness.

Rossbert described his work on the subpanel as a “labor of love.”

“I couldn’t be more proud of the work that the subpanel did and the effort that each of the individual members put in to coming up with both funding recommendations and some policy recommendations to be considered by the General Assembly,” he said.

The work involved getting people who represent a wide range of interests — from landlords to low-income renters — to agree on the best ways to fix the housing crisis. It hasn’t been easy, and throughout the process, some task force members and policy makers have raised questions about whether the funding strategies will get the money to the people who most need it.

Some of those questions, such as income limits for people who get to live in the housing projects, and the amount of money that should be dedicated to emergency renter assistance, are likely to come up at the remaining subpanel meeting Wednesday, where members will discuss policy recommendations — and a draft outline of the final report.

The funding proposals are designed to pump federal money into new housing as soon as possible, Rossbert said.

“This is a pretty monumental and once-in-a-generation-sized pot of money that is being considered, so I think there’s going to be some far-ranging impacts,” Rossbert said. “It does take a while for a project to move from idea to concept to construction, but I think that there will be money flowing out the door relatively quickly.”

SUPPORT NEWS YOU TRUST.

Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.

Faith Miller
Faith Miller

Reporter Faith Miller covers the Colorado Legislature, immigration and other stories for Colorado Newsline.

MORE FROM AUTHOR