Being advocates for projects that might be difficult to build offers possible solutions
Just as affordable housing is a concern nationwide, so too is it in Colorado.
“Right now in Colorado, an estimated 315,000 households are paying more than 50% of their income toward housing,” notes Brian Rossbert, Executive Director of Housing Colorado, a statewide membership organization committed to providing advocacy, professional development and issue expertise for the affordable housing community.
“Because so much of the fabric of our communities is tied to housing, this means that households are unstable, leading to instability in the communities in which they reside,” Rossbert adds. “These households are often one financial hiccup away from becoming unhoused, which impacts the social services infrastructure significantly.”
Rents and home prices continue to rise, putting an increasing number of households into the category of being severely cost burdened when it comes to their housing, he notes.
One driving factor is the deficit in overall housing faced in Colorado, says Rossbert.
“Following the Great Recession, housing construction dropped 40% compared to the decade before, meaning there were fewer homes built for a growing population,” he adds. “When demand outstrips supply, we see rising costs for housing.”
In addition to the supply and demand problem, increased costs for building and competition for land has meant projects aimed at addressing the housing needs of low- to moderate-income Coloradans aren’t getting built or when they are, these projects are smaller in scale than previously, Rossbert says.
“The federal Low Income Housing Tax Credit (LIHTC)—the primary tool used to create new housing for these households–isn’t able to go as far as it once did,” he notes.
One challenge in providing affordable housing in Colorado that is especially prevalent is the deficit in subsidy to build more affordable housing, Rossbert says.
“It costs the same amount of money to build affordable housing as it does market rate,” he adds. “In order to build affordable housing, subsidies in the form of direct funding or equity in the LIHTC program need to be available in order for most projects to move forward.”
Rossbert adds the LIHTC program is oversubscribed.
“Need is outstripping the resources available to make projects pencil,” he says. “We have had increased state subsidy thanks to the vendor fee that goes to the Division of Housing to help close the funding gap on projects, but it is not enough to meet the demand.”
Another funding challenge for homeownership projects is that there is not a program similar to the LIHTC that helps defer the costs of building projects for homeownership, leaving those projects to work extra hard to make the numbers work out, Rossbert notes.
“There are challenges for projects—especially those serving the lowest income households—that have to do with zoning and building codes,” he says. “Oftentimes, zoning changes and/or variances are required to be able to build multifamily affordable housing. That can mean facing local opposition to the creation of these types of projects.”
To mitigate the challenges, Rossbert says for LIHTC, changes need to be made at the federal level to address the shortage of tax credits available to states to allocate to projects and other technical details of the program.
Additionally, “we need more money that is available to go directly to projects meeting the needs of the whole spectrum of housing in the state,” he says.
Pew Research published in January indicates prospective U.S. homebuyers and renters have seen prices surge and supply plummet during the COVID-19 pandemic.
In an October 2021 survey, 49% of Americans indicated affordable housing availability in their local communities is a major problem, up 10% from early 2018. Among those most concerned: younger Americans, urban residents and those with lower incomes.
Another 36% of U.S. adults indicated affordable housing availability is a minor problem in their community, while 14% said it is not a problem.
For those who say affordable housing is a major problem, they rank that concern higher than other local issues, including drug addiction, the economic and health impacts of COVID-19 and crime.
Pew Research found opinions differ according to a number of demographic factors.
Most adults living in lower-income households (57%) say availability of affordable housing is a major issue in their community, compared to 47% in the middle class and 42% in upper-income households.
Pew Research found 57% are Black adults, 55% Hispanic and Asian American adults and 44% of white adults indicated the availability of affordable housing is a major problem where they live.
Adults under 50 are more likely than their older counterparts to say affordable housing availability is a major problem locally, Pew indicates.
In both age groups of adults ages 18 to 29 and 30 to 49, 55% indicate concerns over affordable housing, compared with 44% and 39% of those 50 to 64 and those 65 and older, respectively.
Six out of 10 U.S. adults living in urban areas say the availability of affordable housing in their community is a major problem compared with 46% of suburban residents and 40% of those living in rural areas.
Regardless of income level, city dwellers generally tend to view affordable housing availability as a bigger issue than those living in the suburbs or rural areas, according to Pew Research.
Sixty-six percent of urban adults with lower household incomes say affordable housing in their area is a major problem compared with 56% of suburban dwellers with lower incomes and 52% of those with lower incomes living in rural areas.
Among upper-income adults, 58% of those living in urban areas say housing affordability is a major problem, compared with 43% of upper-income Americans living in suburban places and 25% of upper-income rural residents.
Responses indicated regional differences with 69% living in the West indicating affordable housing availability is a major problem locally, compared with 49% of Northeasterners, 44% of Americans in the South and 33% of those living in the Midwest.
There are political differences as well. Fifty-nine percent of Democrats and independents who lean to the Democratic Party said in 2021 that affordable housing availability is a major problem in their community, compared with 36% of Republicans and GOP-leaning independents.
Americans living in urban areas are more likely to see affordable housing availability locally as a major problem, regardless of party affiliation, Pew Research notes. Partisan differences remain when looking separately at those who live in urban, suburban and rural communities.
ColoradoHousingSearch.com is a free housing locator service jointly sponsored by the Colorado Housing and Finance Authority and the Colorado Division of Housing in collaboration from multiple agencies. The site offers various criteria and mapping features to help users locate desired affordability parameters.
Rossbert notes the entire housing industry is needed to be on the side of affordable housing development.
“This means being advocates for projects that might be difficult to build and working with those developing affordable housing to meet the unique needs and challenges of these sorts of projects,” he says. “Builders are a critical part of the development of all housing in the state and the affordable housing community welcomes their participation in solving our affordability crisis.”