Can Colorado cities prevent thousands of apartments from losing affordability protections?

The veto spurred supporters to narrow their approach this year. They focused on preserving the state’s existing subsidized housing stock, which is in danger of shrinking in coming years, said Rep. Andy Boesenecker, a Fort Collins Democrat.

Colorado is home to roughly 111,000 subsidized units with affordability requirements, according to Colorado Housing and Finance Authority data. It’s expensive and complicated to build subsidized housing projects, and developers lean largely on federal tax credits to make the financing work.

Those tax credits include requirements that rental rates be capped based on certain income levels.

But the requirements are time-limited, often lasting at least 30 years. In the coming decade, 15,000 affordable units here will no longer be subject to the caps that keep them within reach for lower-income Coloradans.

That doesn’t mean those properties will immediately be sold or switched to market-rate rents or prices. But the looming expirations are a warning sign for housing advocates as they scramble to protect the state’s affordable housing stock.

When subsidized properties with expiring affordability requirements are purchased by private companies, “we see quick and significant increases in rent — we see less of an investment in maintaining the property and caring for residents,” said Kinsey Hasstedt, the senior program director for state and local policy at Enterprise Community Partners. “So we are trying to disrupt that.”

Preserving housing or chilling markets?

Opponents and skeptics, representing business groups and property owners, have argued that the bill would hamper development in the state.

“Our biggest fear all along with this has been: Are we going to create a chilling effect on capital and the markets, and then we won’t get the results that we want, which is more housing in the marketplace?” said Ted Leighty, the CEO of the Colorado Association of Home Builders, in testimony during an initial committee hearing in February.

But supporters say preserving subsidized housing is particularly important now — not only because of the expiring affordability requirements but also because of Polis’ preferred solution to the housing crisis: more housing, built more densely, across Colorado cities.

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