Homeownership transforms families and communities. The stability and financial security provided by an affordable, safe home is a proven launching pad for homeowners and their families to realize their full potential, achieve greater levels of success, and build intergenerational wealth.
Lack of access to homeownership is a root cause of inequity: the typical white family has eight times the wealth of a typical Black family – a massive racial wealth gap in large part due to policies that excluded Black families from homeownership.
On a macro scale, higher homeownership rates increase the amount of community wealth that can be spent in the local economy, benefiting everyone.
Despite these benefits, homeownership is accessible to only a select portion of our state’s population. Average home prices in the state have continued to escalate beyond the means of working-class households, rising 57% from 2014-2020, and another 24% in 2021 alone, reaching an average of $509,000.
Homeownership has become unaffordable to any household making under $100,000 per year, an extremely concerning fact given that the average income of Black and Hispanic households in Colorado is $49,081 and $55,026, respectively.
Our BIPOC neighbors are not the only ones impacted by this rapid increase. For frontline professions hardest hit by COVID – teachers, healthcare workers, retail employees, hospitality, and first responders – homeownership is less attainable in 2021 than in 2019. The destabilizing effects of unemployment, income loss, illness, and death have exacerbated already substantial racial, wealth, and homeownership inequalities across the state.
Moreover, COVID decimated affordable housing options in Colorado’s rural communities — already at a critical shortage before the pandemic — as remote workers seeking refuge from urban centers have driven prices up, pushing locals further from their workplaces.
The government’s consistently lower investment in the development of affordable homeownership — compared to its promotion of affordable rentals — and a lack of creative financial instruments has left access to homeownership woefully unequal. It has closed the door to opportunity for thousands of families who, just one generation ago, could have purchased market-rate homes.
Colorado received more than $3 billion from the American Rescue Plan Act of 2021, of which state lawmakers allocated $400 million to affordable housing. This funding represents an unprecedented opportunity to transform the housing landscape through investment in affordable homeownership for Colorado families.
Equipped with this historic investment, the legislative task force and its appointed subpanel has a clear mandate: promote transformative and equitable solutions.
We call upon the General Assembly and our Governor to take this mandate to heart – to reject the notion of continuing to invest in the same systems that perpetuate the same problems, and instead prioritize the development and preservation of affordable homeownership opportunities for Coloradans so that they can invest in themselves and future generations.
Colorado has a robust network of affordable homeownership developers with the capacity to immediately deploy public resources to create affordable homeownership opportunities. With a $200 million investment of Rescue Plan funds, groups such as Habitat for Humanity and Community Land Trusts will be able to address the critical cause of the crisis: the supply of affordable for-sale homes in Colorado.
By securing these investments with long-term affordability instruments, 2,500 new homes will make homeownership possible for more than 5,000 households over 10 years, and for 15,000 over 25 years. Combined with the existing 2,000 permanently affordable homes that are already occupied, this investment will allow 20,000 Colorado households to build stability and opportunity through homeownership by 2046.
There can be no equity without equal access to homeownership and the associated benefits. By investing in affordable homeownership, the American Rescue Plan Act represents a historic opportunity to double the number of affordable homeownership opportunities available across Colorado. We must use this funding to implement thoughtful and creative investments to build community wealth now and into the future.
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