Most Cost-Burdened Residents Should Be Colorado Housing-Policy Priority, Report Says

By Lindsey Toomer, Colorado Newsline

April 7, 2023

A new report from the Colorado Coalition for the Homeless outlines trends in Colorado’s housing landscape and proposes policy changes intended to better help those with the highest need for affordable housing.

Cathy Alderman, the coalition’s chief communications and public policy officer, said the 29-page report, called “Colorado’s Affordable Housing Crisis: It’s Time for Strategic Investments,” addresses the main concern that the limited amount of public money available for housing is frequently invested in middle- and higher-income housing. She said that while there are market solutions that could support this housing population, the market is “completely failing” people with the lowest or fixed incomes.

Housing is considered “affordable” if the total cost, including rent or mortgage and utilities, is no more than a third of the household’s income. The report says Colorado only has 29 affordable housing units for every 100 “extremely low income” households, which includes people earning up to 30% of area median income. Of the households that fall in this category, 74% are “severely cost burdened,” meaning they spend more than half their income on housing.

The National Low Income Housing Coalition ranks Colorado as the eighth most unaffordable state for housing in the country.

Considering the recent approval of Proposition 123 which dedicates an additional $300 million in state funding to affordable housing programs, Alderman said the Coalition for the Homeless wants to ensure the new state money actually goes to those who need it most, and the report offers strategies coalition leadership believes can reach this goal.

“We really want to make sure that those funds get to the households that voters said they wanted it to get to, and we’re hearing that there are efforts to change that to maybe target those funds for middle income households in some areas of the state,” Alderman said. “We just think voters approved making these funds available for those households most in need, and so we want to honor that.”

"If we’re not building budget housing and different housing forms below what the current market rate is, housing costs will continue to go up and we’re going to continue to have more homeless people."

– Benjamin Dunning. of Denver Homeless Out Loud

Alderman went to the Colorado Capitol Thursday to ask legislators at a land use bill’s committee hearing to consider greater affordability requirements in the bill, as she said housing supply alone “is not going to solve the affordable housing crisis.” The land use bill, if approved as is, would aim to increase Colorado’s housing stock by allowing denser development in residential neighborhoods of many cities in the state.

“What we’re really hoping is that folks will read the report and they’ll understand why we keep showing up to testify to the fact that we need strategically targeted interventions for low-income and fixed-income households,” Alderman told Newsline.

More housing alone said to be not enough

The report argues that if zoning changes allowing greater density don’t include requirements for affordable housing, it will only lead to additional displacement and unaffordable housing. It also says studies show that increasing housing costs directly correlates with increasing homelessness.

Any incentives related to increased density, the report says, "should be directly tied to affordability, anti-displacement and accessibility to effectively help the communities where these incentives are in place." Another section of the report outlines why research shows that “trickle-down housing” doesn’t work. Trickle-down housing holds that over time, homes depreciate and become available at lower price points over time, but this process can take decades to actually be effective.

“We analyzed a bunch of studies on this idea of trickle-down housing, and we found that even in the long run, it doesn’t really open up housing for low-income families,” Alderman said. “It might help middle income families, but the only thing that helps low- and fixed-income households is targeted resources and interventions specific to those household level incomes.”

The report’s conclusion offers a list of questions the Coalition for the Homeless wants policymakers to consider when making decisions on the use of public funds for housing solutions. It also calls on elected officials to commit to using public funds to support those who have faced the most significant barriers to housing, prioritizing mixed-income development and keeping publicly funded development proportional to a community’s needs.

Benjamin Dunning, a founder of Denver Homeless Out Loud, agreed that just building more housing won’t help those who need it most unless it is price-controlled for the lower income populations more burdened by housing costs.

“If we’re not building budget housing and different housing forms below what the current market rate is, housing costs will continue to go up and we’re going to continue to have more homeless people,” Dunning said. “You never hear in the discussion, ‘We’ve got a big plan to build a whole bunch of budget housing.’ What they choose instead is to give us the false expectation that ‘affordable housing’ will fix this.”

Dunning said most “affordable housing” code requirements are met by targeting higher area median incomes rather than the lowest and most vulnerable populations under 30%. He said more publicly owned and operated housing is what would benefit these populations most outside of the private market.

“If we built this 20 years ago when we should have instead of building football stadiums, we wouldn’t be here right now,” Dunning said.

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