Bill to make Colorado housing development easier on state-owned land clears committee
Democratic Sens. Dylan Roberts and Rachel Zenzinger speak in front of the Senate Local Government and Housing Committee about Senate Bill 23-1 on Jan. 24, 2023. (Sara Wilson/Colorado Newsline)
A major housing bill focused on facilitating private development on land owned by the state cleared committee on Tuesday, as Colorado lawmakers work to find solutions this legislative session for the state’s housing concerns.
“This bill is a great continuation of our efforts to address the affordable housing crisis in Colorado, because it addresses one of the biggest barriers to building more affordable housing, and that is the cost of land,” Sen. Dylan Roberts, a Democrat from Avon, told the Senate Local Government and Housing Committee on Tuesday.
“As we look to further increase our housing access across Colorado and reduce the cost of housing, state-owned land is a key asset we should look at,” he said.
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Senate Bill 23-1 would transfer $13 million — $5 million from the general fund and $8 million from the Housing Development Grant Fund — to the Unused State-Owned Real Property Fund to support public-private partnerships that seek to build affordable housing on state-owned land. That modest dollar amount would support just a few projects in order to test the concept.
The bill would empower the Public-Private Partnership (P3) Collaboration Unit, which was created through legislation last year, to broker real-estate transactions between the state and developers.
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It is sponsored by Roberts and Democratic Sen. Rachel Zenzinger of Arvada in the Senate and by Democratic Reps. Shannon Bird of Westminster and Meghan Lukens of Steamboat Springs. Democrats enjoy substantial majorities in both chambers of the Legislature.
The idea of building more housing on state-owned land has been brought up multiple times by Democratic Gov. Jared Polis, who touted a proof-of-concept project near Vail that includes plans to build 80 units of workforce housing on land owned by the Colorado Department of Transportation.
Funding from the bill would let CDOT clear the land so developers can begin work.
“This is a great way to empower local governments to continue making their own land use decisions, their own zoning decisions on housing, but frees up some land and really lowers the cost of affordable housing projects in their region,” Roberts said.
Housing is typically a local government issue, and one major expected theme for the current legislative session is the role the state can — and should — play in encouraging affordable housing development.
“Many people are a little credulous about the role of state government with regard to housing. But I think this is one of those solutions that finds the sweet spot, because it allows local governments to still be in the driver’s seat with regards to these projects and allows the state to be a valuable parter for the part of the puzzle that sometimes is the most expensive or most problematic,” Zenzinger told the committee.
The bill would not mandate local governments to take any action, but simply enable them to pursue these types of projects.
“If the conditions are right for you, and we are able to utilize the P3 office to bring together public-private partnerships in such a way that benefits the community, then great. We will help enable that process and put some guardrails on it,” she said.
Bruce Eisenhauer, the legislative liaison at the Department of Local Affairs, and Bill Ryan, the director of the Colorado State Land Board, spoke in support of the bill and used an apartment complex down the street from the Capitol as an example of a successful public-private partnership.
The Land Board leased land to a developer, who tore down existing “dilapidated” buildings and built 103 units of affordable housing, using a variety of funding sources to support the project.
“This is just an example of what can be done using this model,” Eisenhower said.
Karen Kallenberg, the executive director of Habitat for Humanity of Colorado, said one of the biggest obstacles and costs in the organization’s work is the cost of land.
“Now is the time to leverage the inventory (of vacant state-owned land) and put the systems in place to provide more affordable housing. That’s what SB-1 does,” she said. “In order to meet the need, we need every creative solution possible.”
Other supporting organizations include the Colorado Municipal League, the Denver Metro Chamber of Commerce, the Colorado Association of Realtors and the Colorado Chamber of Commerce.
The bill won committee approval on a 6-1 vote and now heads to the Appropriations Committee. Republican Sen. Byron Pelton of Sterling was the lone opposing vote.
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