Proposition 123 - Colorado Affordable Housing Fund
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 Colorado Office of Economic Development and International Trade (OEDIT) to fund housing programs.
The funding created by Prop 123 is available to local governments, subject to a few requirements they must meet in order to qualify. These requirements include:
- Establishment of a Fast Track process enabling it to provide a final decision for projects where at least 50% of the proposed units are held affordable within ninety calendar days of submission of a complete application. (Note: there are extensions outlined for various circumstances, such as for a review period required by another agency.)
- Commitment to increasing affordable housing by 3% on average annually.
CCI has created this resource page to share the latest updates on Prop 123 implementation and provide resources for counties interested in pursuing Prop 123 funding. You can find further information on these requirements and more below.
WHO PLANS TO QUALIFY?
In February 2023, we conducted a survey in partnership with DOLA to understand where counties currently stand in their plans to qualify (or not) for Prop 123 funding. Some of the results are shown below.
Do you intend to establish a housing commitment and Fast Track review process for affordable housing to qualify for grant funds under Prop 123 by the November 1, 2023, deadline?
If you answered “Uncertain,” what is the cause of uncertainty? What do you still need to know in order to make a decision?
If we are already functioning within a Fast Track review process in which most permits are reviewed in under 90 days, what adjustments do we need to make to qualify?
What exactly does “Fast Track process” mean? What are the definitions of the components of the process (ex. 90 days)? (See below.)
What is the baseline that the 3% increase will be calculated against, and is it measured cumulatively year over year? (See below.)
What methodology should I use/what considerations should I take into account when determining my baseline? (See below.)
ESTABLISHING THE BASELINE
Local governments (municipal or county) are responsible for setting their own baseline and communicating it with DOH. Proposition 123 clarifies that a county’s baseline is only applicable for the unincorporated areas of the county. In order to assist local governments, DOH has tabulated an estimate of what the affordable housing baseline for each jurisdiction may be. This information is a starting point and may be used as reference materials as localities consider their upcoming affordable housing commitments and determine their own baselines.
Click the DOH webpage link below to view more information on determining a baseline, finalizing and communicating the baseline, finalizing a commitment, opportunities for feedback and collaboration, compliance, timeline, and next steps.
THE FAST TRACK PROCESS
We are expecting more information about the Fast Track process, as a number of components (like the 90 days) are yet to be defined.
However, it’s worth noting that the Fast Track process must make it feasible that a completed application could be reviewed in 90 days, but it does not require that all completed applications actually be reviewed in 90 days. The language includes extensions for various circumstances. These extensions include:
- Additional 90 days at the request of a developer.
- Additional 90 days for compliance with state law or court order.
- Additional 90 days for a review period required by another local government or agency, within the local government or outside, for any component of the application requiring that government’s or agency’s approval.
- Extension to allow for the submission of additional information or revisions to an application in response to requests from the local government, not to exceed the amount of time from the request to the submission of the applicant’s response plus 30 days.
ALL RESOURCES
DOLA Prop 123 Implementation Discussion
In early January, DOLA led an implementation update and discussion. You can access the slide deck, which provides an overview of the framework and timeline, below.
Prop 123 Administrator Selection
OEDIT has been keeping the public updates on the selection of the fund administrator.
DOH Prop 123 Webpage – Baselines
The Division of Housing webpage on Prop 123 currently provides information on the baseline measurements that local governments must establish in order to make their 3% commitment.
