As the cost to live in Colorado continues to rise, a bill passes out to the House Finance Committee, aiming to inspire more development of affordable housing units.
The bill would create a state grant program giving out up to $40 million per year to encourage development of affordable housing. The money would come from the unclaimed property trust fund, or a collection of tax refund money that the state uses if the money is still unclaimed after three years.
“We are very interested in doing everything we can to encourage the development of additional affordable housing here in the community,” said Steve Posey, the Director of the Housing and Urban Development program for the city of Colorado Springs.
Posey said around 400 to 600 affordable units have been created within the city in the last two to three years. Mayor John Suthers has set a goal of developing 1,000 units each year over the next five years to meet the growth of the city.
“As the city continues to grow, there will be an increased need for housing,” Posey said. “We’ve got a lot of projects that are either in the pipeline or under construction.”
Because affordable housing projects are less profitable than other developments, state and local governments often have to create incentives to push developers in the direction of building more affordable units.
In Colorado Springs, the city defines affordable housing by units, by setting a price for the number of bedrooms and requiring rents to stay within that price range for a number of years.
For example, the city would like to see two-bedroom apartments from around $900 to $1,100 per month to be considered affordable.
Posey said the typical going rate can be $1,600 per month, and newer units can be even more pricey.
“Right now, if you’re trying to find an apartment in Colorado Springs for $1,000 a month, that is really really tough,” he said.
A large section of the jobs created in the city, Posey said, are hourly and pay around $15 to $20 an hour.
A study released in 2018 shows Colorado Springs had the highest cost-of-living increase of any city in the United States, increasing over $17,000.
The study defined what it takes for a “comfortable” cost of living, meaning 50% of income going to necessities, 30% for luxuries, and 20% for saving.
In 2017, it says, a comfortable cost of living in Colorado Springs was $49,415. In 2018, it increased 35.61% to $67,041.
The trend continues north to Denver where a comfortable cost of living increased more than $15,000 in the same time frame — from $62,561 to $77,562.
“Any additional revenue streams we can bring to the effort are going to be welcome,” Posey said. “Those legislative efforts may turn out to not accomplish the thing they were originally meant to do.”
The bill passed out of the House Finance Committee Wednesday and will now go to the House Appropriations committee.