Measure aimed at creating hundreds of for-sale affordable homes in Colorado passes at the Capitol
Senate Bill 6, championed by Frisco Sen. Dylan Roberts, would unlock $50 million in state-issued, low-interest bonds to help developers build units
Ben Roof/Special to the Daily
A measure that proponents say could lead to more than 200 individuals and families buying affordable homes passed the Colorado legislature on Wednesday and now heads to the governor’s desk.
Senate Bill 6 would direct the state treasurer’s office to invest up to $50 million in state-issued bonds to affordable housing developers.
The bonds — a type of loan — would come with below-market interest rates to help developers “create or finance new affordable, income-restricted, for-sale housing in the state that, without such investment, would not otherwise be available at similar rates and terms,” according to an analysis of the bill by the nonpartisan Legislative Council Staff.
The funding would only go to homes sold at or below 140% of the area median income.
Sen. Dylan Roberts, D-Frisco, the bill’s lead sponsor, said the initiative will serve as a pilot program that could pave the way for further investments. He said the bill’s focus on homeownership addresses a desperate need across the state, including in rural resort areas where the cost of homes can easily hover in the millions.
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“We’ve put in a lot of efforts, and we see a lot of affordable housing rental products being built but not enough ownership opportunities,” Roberts said, “which I think is especially crucial in Western Slope communities where people want to stay and continue to be a part of their community.”
While Roberts estimates the bill could lead to the construction and mortgage assistance of around 200 homes, he hopes the true number will be even greater if the bonds can also stimulate private investment.
To get around a tight budget, the bill would pull money from reserves in the state treasury rather than the general fund, which is the legislature’s discretionary spending account and the source of deep cuts this year.
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Roberts said using treasury money is “an incredibly smart investment, because these are loans that will get paid back, but they will also build homes that mean people will stay in Colorado and continue to be a part of the economy.”
Along with Senate Bill 6, Roberts is also sponsoring a measure to overhaul the state’s construction defects laws in an effort to boost the development of more homes.
House Bill 1271 is the legislature’s second attempt in two years to pass such a measure, and proponents point to the decline in condo development in recent years as a driver behind the state’s deficit of affordable homeownership options.
A report last year by the Colorado Common Sense Institute found that between 2007 and 2022, the number of active condo developers in the state decreased by 84%. It cites Colorado’s strict defects laws, which create a “higher risk of costly litigation and potential liabilities” and make condo development a “less appealing investment option compared to other types of housing developments.”
“Condos have historically been the least expensive homeownership option,” said Rep. Shannon Bird, D-Westminster, a House sponsor of the bill, in an interview last month. “Incentivizing condo construction is also really important, particularly in mountain areas where you don’t have a lot of remaining developable land, and that’s also a common issue that’s happening in some of our Denver-metro and suburban areas where we are nearing buildout.”
House Bill 1271 passed the House in a 59-5 vote last month and is still being debated in the Senate. The bill is a top priority of Gov. Jared Polis.
“Senate Bill 6, in combination with the construction defect reform bill and other efforts, I think, are putting more emphasis on the ownership side of the conversation,” Roberts said.
