The Department of Local Affairs (DOLA) will host informational webinars on April 22 and 25 to provide guidance and clarity around the Proposition 123 requirement to expedite review of affordable housing.

Proposition 123 states that, in order to remain eligible for Proposition 123 funds in the next three-year cycle (2027 to 2029), local governments must demonstrate they have implemented an expedited review process for housing projects where at least half of the units are affordable. While the law states that expedited review must take place within 90 calendar days of a complete application submission, there are many additional details to consider.

DOLA’s guidance does not prescribe an approach but instead provides a list of strategies and approaches. Each community will need to determine which strategies are most effective for their local processes. Grant funding is available to support local governments with the implementation process.

Upcoming Webinars

• Monday, April 22, noon to 1:30 p.m.
• Thursday, April 25, 2 to 3:30 p.m.

Note that webinar registration has closed.

Introduction

Chaffee County has submitted a petition to the Division of Housing within the Department of Local Affairs to use different percentages of median income than those percentages specified in statute for the following programs: the Land Banking Program (C.R.S. 29-32-105.5 (3)(a)) and the Concessionary Debt Program (C.R.S. 29-32-105.5 (3)(c)). These programs are administered by the Colorado Housing and Finance Authority and overseen by the Governor’s Office of Economic Development and International Trade. Though the Division is not responsible for these programs, it is charged by statute (C.R.S. 29-32-105.5 (2)) to review petitions by localities that eligible projects within them be subjected to different income limits from those explicated in statute.

Scope of Petition

The increase of income limits for projects sited in Chaffee County receiving funds through the Land Banking Program and applicable activities within the Concessionary Debt Program* to 80% of Area Median Income (AMI), either on a per-unit basis or on average for all units in a project as allowable by statute. This does not include the Affordable Housing Equity Program. If approved, the petition will remain in effect from its approval date through December 31, 2026.

Current Area Median Income limits for these programs are as follows:

• Land Banking Program - 60% max AMI for Rental, 100% max AMI for Homeownership
• Affordable Housing Equity Program - 90% average AMI or below
• Concessionary Debt Programs - 60% average AMI or below

*In cases where debt financing is provided to low and middle-income multi-family housing rental developments, existing affordable housing projects, or preserving existing affordable multi-family rental units.

Process

The Division of Housing must follow the following process required by statute (C.R.S. 29-32-105.5 (5)):

The Division may approve the petition to use different percentages of area median income, but only if:

• The submitted housing needs assessment:
  • Is published by the state or is a local housing needs assessment that utilizes data from the state demographer or other publicly accessible sources, which in either case may be supported by other relevant and verifiable community data;
  • Has been completed within the past three years of the petition date; and
  • Is accompanied by a narrative description of why other funding sources cannot be utilized, are not sufficient, or are not accessible to meet the housing needs described within the petition; and
• The Division determines that the current eligibility standards would cause implementation of this article in a manner inconsistent with demonstrated housing and workforce needs within the jurisdiction, taking into consideration regional workforce commuting trends.

In the event that the petition is approved, the new income limits will be based on the average needs identified in the housing needs assessment (C.R.S. 29-32-105.5 (6)), and public comments will be considered in the review of the petition (C.R.S. 29-32-105.5 (4)). No recommendation will be made on approval or denial of the petition until the public comment period is complete and the comments are considered in the recommendation. If Division of Housing staff recommend the denial of the petition, then the petitioner may appeal the staff recommendation to the Division Director of the Division of Housing.

Implications

If the petition is approved then eligible affordable housing projects can make units available to households with higher incomes than would otherwise be possible.

If the petition is denied, then affordable housing projects currently under consideration may become financially infeasible in the event that they require higher revenues generated by higher income households. If demand for affordable housing is still present at lower income levels, they may be unable to afford the higher rents of these higher income units, potentially making less affordable housing units available for lower income households than would otherwise be required.

Basis of Petition

A housing needs assessment of Chaffee County, produced in 2022. In describing why other funding sources cannot be utilized, are not sufficient, or are not accessible to meet the housing needs described within the petition, the petitioner wrote: “[T]his project is funded through a mix of private investments, yet due to excessive costs for land and construction in our rural mountain community, requires grant support to achieve unit pricing that will allow for affordable housing offerings.”

Public Comments

Public comments will be accepted for 30 days, starting on the date that the Division of Housing posts notice that a petition has been filed on its website. The petition and relevant attachments will be included in the notice.

The Division of Housing's Office of Housing Finance and Sustainability has prepared four outlines detailing the proposed allocation and distribution of Proposition 123 funding to address homeownership.

The outlines are based on a two-pronged approach that expands on what works while also supporting new and innovative program ideas.

Review the Proposed Outlines and Take the Survey

The four initial guideline documents are:

• Down Payment Assistance (DPA)
• New Construction and Acquisition Rehabilitation
• Mobile Home Programs
• Single Family Owner-Occupied (SFOO) Rehabilitation

You can review the documents that interest you and provide your feedback through this survey, which will be open through April 26.

Join the April 17 Forum

You can also join the virtual Stakeholder Feedback Forum on Wednesday, April 17 from 12:30 to 2 p.m. Staff will review the outlines and take questions, comments, and suggestions.

Next Steps and Questions

Staff will post final homeownership program guidelines on May 31 and begin accepting initial applications on July 1.

If you have any questions, let us know.

The Division of Housing (DOH) will post proposed Proposition 123 homeownership program outlines on Engage DOLA on Friday, March 29, 2024. Stakeholders will be able to provide written feedback on the outlines between March 29 and April 26.

DOH will hold an online Stakeholder Feedback Forum on the outlines on Wednesday, April 17 from 12:30 to 2 p.m. Staff will review the outlines and take questions, comments, and suggestions from stakeholders. To join the forum, use this Zoom link or call +1 719-359-4580 or +1 669-900-6833 and enter the code 87970042641#.

Staff will post final homeownership program guidelines on May 31 and begin accepting initial applications on July 1.

If you have any questions, let us know.

Division of Local Governments has awarded $2.6 million in grant awards to 25 projects in the first round of Local Planning Capacity grants, a new grant program established by Proposition 123, the State Affordable Housing Fund. View a list of awardees and project descriptions.

The next round of applications will be open May 1 - 31, 2024 with an informational webinar for prospective applicants scheduled on April 11 from 12:30 - 2pm. Grant application materials will be posted in early April and interested applicants are encouraged to register for the webinar and book a pre-application meeting with the LPC Program Manager Robyn DiFalco to discuss your proposed project.

Local Planning Capacity grants support local government efforts to implement systems that fast track or expedite the development review process for affordable housing. These funds can also support local government capacity to achieve local affordable housing goals and local governments’ Prop 123 commitments. Most grantees will be exploring land use code amendments, implementing process improvements to streamline the development review process, or investing in permitting software as part of their strategy. Others will use grant funds to inventory potential properties for future affordable housing projects, designate a liaison to work with developers, implement a housing action plan, or work on other projects such as preservation of mobile home parks.

The Division of Housing was grateful to have over 100 community partners register to attend our Proposition 123 Homelessness Funding Proposal Feedback Forum held on January 24th.

Throughout the Forum, stakeholders provided thoughtful questions and insights about Division of Housing’s Strategy & Funding Approach for Proposition 123’s Program Serving Persons Experiencing Homelessness.

The Division encourages stakeholders to review slides from the session and the recording.

Feedback

Any additional feedback or ideas about the proposed approach to homelessness funding through Proposition 123, can be submitted through the feedback survey, which will stay open through January 26th.

The Division will share notes on what was learned from the Forum and the survey when available.

Introduction

The Town of Frisco has submitted a petition to the Division of Housing within the Department of Local Affairs to use different percentages of median income than those percentages specified in statute for the following programs: the Land Banking Program (C.R.S. 29-32-105.5 (3)(a)) and the Concessionary Debt Program (C.R.S. 29-32-105.5 (3)(c)). These programs are administered by the Colorado Housing and Finance Authority and overseen by the Governor’s Office of Economic Development and International Trade. Though the Division is not responsible for these programs, it is charged by statute (C.R.S. 29-32-105.5 (2)) to review petitions by localities that eligible projects within them be subjected to different income limits from those explicated in statute.

Scope of Petition

The increase of income limits for projects sited in the Town of Frisco receiving funds through the Land Banking Program and applicable activities within the Concessionary Debt Program* to 80% of Area Median Income (AMI), either on a per-unit basis or on average for all units in a project as allowable by statute. This does not include the Affordable Housing Equity Program. If approved, the petition will remain in effect from its approval date through December 31, 2026.

Current Area Median Income limits for these programs are as follows:

• Land Banking Program - 60% max AMI for Rental, 100% max AMI for Homeownership
• Affordable Housing Equity Program - 90% average AMI or below
• Concessionary Debt Programs - 60% average AMI or below

*In cases where debt financing is provided to low and middle-income multi-family housing rental developments, existing affordable housing projects, or preserving existing affordable multi-family rental units.

Process

The Division of Housing must follow the following process required by statute (C.R.S. 29-32-105.5 (5)):

The Division may approve the petition to use different percentages of area median income, but only if:

• The submitted housing needs assessment:
  • Is published by the state or is a local housing needs assessment that utilizes data from the state demographer or other publicly accessible sources, which in either case may be supported by other relevant and verifiable community data;
  • Has been completed within the past three years of the petition date; and
  • Is accompanied by a narrative description of why other funding sources cannot be utilized, are not sufficient, or are not accessible to meet the housing needs described within the petition; and
• The Division determines that the current eligibility standards would cause implementation of this article in a manner inconsistent with demonstrated housing and workforce needs within the jurisdiction, taking into consideration regional workforce commuting trends.

In the event that the petition is approved, the new income limits will be based on the average needs identified in the housing needs assessment (C.R.S. 29-32-105.5 (6)), and public comments will be considered in the review of the petition (C.R.S. 29-32-105.5 (4)). No recommendation will be made on approval or denial of the petition until the public comment period is complete and the comments are considered in the recommendation. If Division of Housing staff recommend the denial of the petition, then the petitioner may appeal the staff recommendation to the Division Director of the Division of Housing.

Implications

If the petition is approved then eligible affordable housing projects can make units available to households with higher incomes than would otherwise be possible.

If the petition is denied, then affordable housing projects currently under consideration may become financially infeasible in the event that they require higher revenues generated by higher income households. If demand for affordable housing is still present at lower income levels, they may be unable to afford the higher rents of these higher income units, potentially making less affordable housing units available for lower income households than would otherwise be required.

Basis of Petition

A housing needs assessment of Summit County, produced in 2023, that utilizes data from the state demographer, other publicly accessible sources, and is supported by other relevant and verifiable community data. In describing why other funding sources cannot be utilized, are not sufficient, or are not accessible to meet the housing needs described within the petition, the petitioner wrote: “[a]ll available funding sources accessible to the project, which meet individual DOLA/CHFA program guidelines are being requested. Due to the project's economic proforma, to meet the community's AMI need a higher AMI exception is requested.”

Public Comments

Public comments will be accepted for 30 days, starting on the date that the Division of Housing posts notice that a petition has been filed on its website. The petition and relevant attachment by the Town of Frisco will be included in the notice.

The Division of Housing’s Office of Homeless Initiatives has prepared a new document detailing the proposed allocation and distribution of Proposition 123 funding to address homelessness.

• The Strategy & Funding Approach for Proposition 123’s Program Serving Persons Experiencing Homelessness

The document draws from Proposition 123, stakeholder input, Governor Polis’ priority, and Colorado’s Making Homelessness History Playbook. It aims to adhere to Affordable Housing Support Fund guidelines, focusing on Coloradans facing homelessness.

It covers the strategy, application methods, funding allocations for the present year, and plans for the second year.

Provide Feedback

Feedback Survey

Stakeholders are encouraged to share input and feedback on the proposed plan through this survey by January 12, 2024.

Feedback Forum

This meeting will provide an opportunity for participants to preview the Colorado Department of Local Affairs, Division of Housing (DOLA/DOH) strategy for the utilization of Proposition 123 resources for persons experiencing homelessness. Community partners and stakeholders are encouraged to attend and share their feedback on the proposal.

Register to participate in our upcoming meeting on January 24, 2024, at 3:00 p.m.

Questions

If you have any questions please let us know.

As part of Proposition 123, local and tribal governments must first file a commitment to the Department of Local Affairs to increase their affordable housing by 3% per year over three years, for a total of 9%.

Filing a commitment makes a local government or tribe, along with entities operating within their jurisdiction, eligible to apply for funding through the programs implemented by the Colorado Department of Local Affairs (DOLA), the Office of Economic Development & International Trade (OEDIT), and/or the Colorado Housing and Finance Authority (CHFA). Organizations and developers are only eligible for this funding if their project or program takes place in a municipality, county, or tribe that has successfully filed a commitment to increasing their affordable housing stock above a baseline amount.

Filing a commitment does not immediately designate funding to a local government or tribe. Once a jurisdiction becomes eligible for funding through the filing of a commitment, they must submit an application for the respective program to OEDIT/CHFA and/or DOLA.

The commitment filing period for 2023 expired on November 1, 2023. New commitments will be accepted in summer 2024.

The Division of Housing (DOH) saw a tremendous response from local governments and received Prop 123 commitments from more than 202 of the 336 jurisdictions throughout Colorado. These jurisdictions account for 87.7% of the state’s population. A list of jurisdictions that have made this commitment can be found here. For a project to be eligible for Proposition 123 funding, the county, municipality or tribal government was required to file a commitment by November 1, 2023, to increase affordable housing within each jurisdiction by 3% per year, for three years, for a total of a 9% increase.

Passed by Colorado voters in 2022, Proposition 123 created the State Affordable Housing Fund, dedicating 40% of funds to the Affordable Housing Support Fund administered by the Department of Local Affairs (DOLA) and 60% to the Affordable Housing Financing Fund overseen by the Office of Economic Development & International Trade (OEDIT) to fund housing programs.

The three Affordable Housing Support administered by the Department of Local Affairs (DOLA) are:

• Affordable Home Ownership - up to 50% of the Support Fund and administered by DOH
  • $32 million in Year 1 and estimated to be $63.6 million in Year 2
• Program Servicing Persons Experiencing Homelessness - up to 45% of the Support Fund and administered by DOH
  • $28.8 million in Year 1 and estimated to be $57.24 in Year 2
• Local Planning Capacity Development Program - up to 5% of the Support Fund and administered by the Division of Local Government (DLG)
  • $3.2 million in Year 1 and estimated to be $6.36 million in Year 2