Nobody s home free: A closer look at Colorado s housing crisis. We all need to be educated about the high cost of housing in our state. Let s work together for affordable solutions that boost our economy, while keeping our residents safe and thriving. Here is your guide to the issue. LiveAffordablyColorado.org
A pricey place to live. Colorado is one of the fastest growing states in the nation, and our housing prices are escalating exponentially. In 2015, the median home price in Colorado grew by more than 12% to over $280,000 and Denver-metro area median home prices increased over 15% to nearly $300,000, the highest gain in the country.* Meanwhile, Denver metro area wages have grown only.6% over the same time period.** Recent estimates from the Colorado Department of Labor show that over 70% of new jobs created in Colorado over the next 10 years will have starting annual salaries of less than $36,000 well below the income required to afford the average two bedroom apartment. Source: Out of Reach 2014: Colorado, Mar. 2014. National Low Income Housing Coalition A salary of $36,000 falls below therequired $36,623 annual earnings required to afford an average Colorado two-bedroom apartment at fair market rent and associated utilities without paying more than 30% of income on housing. *Colorado Home Prices & Values. Accessed Feb. 2016. www.zillow.com ** The Economics Daily, Percent changes in average hourly earnings for largest metro areas, June 2014 to June 2015. April 2016. U.S. Department of Labor The gap continues to grow. By 2025, Colorado s population is projected to reach 6,454,860, up roughly one million from today s estimate of 5,456,574. At the current rate of building affordable housing, it will take more than 100 years to bridge the current gap between supply and demand, not accounting for the increased demand that population growth will inevitably bring. Unlike other states, Colorado lacks a dedicated and permanent source of funding for affordable housing. Two of the most important federal funding sources for affordable housing, HOME and Community Development Block Grant (CDBG) programs have been cut by more than 50% and 30% respectively in recent years. In 2015, Colorado Housing and Finance Authority received a total of $28.5 million in requests for federal 9 percent Low Income Housing Tax Credits, more than double the amount available for allocation. Source: Driving a Vibrant Economy: Housing s Role in Colorado s Economic Success, Dec. 2014. The Piton Foundation and Colorado Futures Center at CSU > $36,000 RECENT ESTIMATES FROM THE COLORADO DEPARTMENT OF LABOR SHOW THAT OVER 70% OF NEW JOBS CREATED IN COLORADO OVER THE NEXT 10 YEARS WILL HAVE STARTING ANNUAL SALARIES OF LESS THAN $36,000.
Who s affected? One out of every four renters in Colorado pay more than 50% of their income on housing 50% Source: Housing Landscape 2014, Feb. 2014. National Housing Conference Due to rising prices and lack of inventory, housing costs are overwhelming for hundreds of thousands of Coloradans. Among those who are struggling are working families, service employees, seniors, veterans, disabled citizens, and at-risk populations. First responders, magazine editors, city clerks, waiters, chemists, and other college-educated workers are also not immune. Colorado s housing crisis casts a wide net across the state and is a burden that affects us all. 30% Colorado households that spend more than 30% of their monthly income on housing account for $2 billion less spending each year on consumer goods. 30% Source: Kids Count Data Center. Annie E. Casey Foundation One out of every three children in Colorado live in a household with a high cost burden, spending more than 30% of their income on housing. Source: Housing Affordability s Impact on Local Government Finance: An Adams County Case Study, Dec. 2014. The Piton Foundation and Colorado Futures Center at CSU Affordable housing boosts our economy. economic impact Housing plays an important role in our collective economic vitality. Continued development of affordable housing stimulates Colorado s economy through local income, tax revenues, and job creation. Our local economy suffers when Colorado households spend more than 30% of their monthly income on housing - this accounts for $2 billion less annual consumer spending in other areas. What s the state and local economic impact of building and rehabilitating affordable housing during one year? The one-year combined state and local economic impact of building and rehabilitating subsidized housing in Colorado include: $113.1 MILLION IN STATE AND LOCAL INCOME $20.9 MILLION IN TAXES AND OTHER REVENUES FOR ALL STATE AND LOCAL GOVERNMENTS 1,657 FULL-TIME EQUIVALENT JOBS Source: Driving a Vibrant Economy: Housing s Role in Colorado s Economic Success, Dec. 2014. The Piton Foundation and Colorado Futures Center at CSU
Existing and proposed policies. A range of policy solutions have been proposed to help fill this gap in supply and meet the growing demand for affordable housing. Two of these in particular the State Low Income Housing Tax Credit and Housing Development Grant are currently in place. State Low Income Housing Tax Credit (LIHTC) The LIHTC incentivizes private investment in affordable housing development by providing reductions in investors state tax liability. In 2015, this state tax credit generated a return of nearly $9 in private investment and economic activity for every $1 of public investment. Housing Development Grant (HDG) The HDG line item within the Department of Local Affairs (DOLA) budget is the only source for affordable housing development grants in the state. In FY14-15, the state leveraged $163,861,982 in public and private funds, creating 1,606 jobs and generating $20,310,661 in tax revenue through state housing development funding, including the HDG. Funding Strategies Despite the enormous impact of the LIHTC and HDG, securing more resources will be crucial to addressing Colorado s affordable housing need. The majority of states in the country have what Colorado lacks, a dedicated and permanent source of funding for affordable housing development. Many strategies to establish a funding source have been explored, including accessing a portion of the state s Unclaimed Property Fund and establishing a modest documentary fee on real estate transactions. Source: Colorado State LIHTC 2015 Allocation Report, Dec. 2015. Colorado Housing and Finance Authority Source: FY 2016-17 Staff Budget Briefing, Nov. 2015. Colorado Assembly Joint Budget Committee
You can make an impact. Here are the three key ways you can make an impact on housing issues: Educate yourself. Learn more about housing in Colorado at LiveAffordablyColorado.org and HousingColorado.org. Get to know your community s housing economy. Meet with your local housing providers and supportive services agencies that serve residents. If you need help, contact Housing Colorado for a list of providers in your area. When elected, support proposals that promote the development and preservation of long-term, reliable affordable housing that meets your community s needs. Who is Housing Colorado? We re a statewide, multi-sector membership association representing the affordable housing industry. The organization is recognized throughout Colorado as a valuable resource providing important information, education and advocacy. Housing Colorado s mission is to be a unified voice promoting the preservation and production of quality affordable housing for low and moderate income Coloradans through statewide education and advocacy in order to build a strong economy and healthy communities. For more information, please contact: Sara Reynolds, Executive Director sara@housingcolorado.org (303) 863-1024 HousingColorado.org LiveAffordablyColorado.org