Colorado Democrats on Tuesday introduced a bill that would send millions of dollars to cities that agree to encourage denser housing near transit — and withhold state highway funding from those that don’t.
The measure, House Bill 1313, is a key piece of Democratic Gov. Jared Polis’ plans to address the state’s housing shortage and combat climate change. It relies heavily on financial incentives, such as affordable housing tax credits and infrastructure funding, to coax cities into developing transit-oriented communities — a departure from last year’s failed attempt to force cities to zone for apartments and townhouses.
But it has a punitive side, too: Affected cities that don’t take steps to meet housing goals laid out in the bill could see cuts to state highway funding they currently receive.
“Low-density housing creates sprawl, forcing Coloradans to live farther from their jobs, grocery stores, and schools,” said Rep. Iman Jodeh, D-Aurora, one of the measure’s lead sponsors along with Rep. Steven Woodrow, a Denver Democrat. “It doesn’t have to be this way. We can change the status quo to create a more affordable Colorado that works for its people.”
The bill would apply to 30 local governments, mostly along the Interstate 25 corridor and in and around Grand Junction. Mountain communities and rural areas that fall outside of metropolitan planning organizations would be exempt, as would places with minimal existing transit service and communities with fewer than 4,000 residents.
The measure would create a $35 million infrastructure grant fund to support transit-oriented development and set aside another $30 million in affordable housing tax credits for qualifying cities.
Last legislative session, a sweeping housing and land use package brought by Polis and his Democratic allies collapsed on the final day of the legislative session, amid fierce resistance from local officials who complained that the measure, Senate Bill 213, was crafted behind closed doors with no input from affected communities.
This time around, local government advocates say they’ve been included in the discussions for months, alongside housing groups and environmental advocates.
Nonetheless, Kevin Bommer, who leads the Colorado Municipal League, said the proposal might actually generate more outrage from local officials than last year’s attempt to override local zoning rules.
“It’s inappropriate to try to punish anyone by withholding those (highway) dollars,” Bommer said. “Once that door is opened, it just creates a bunch of opportunities for future mischief.”
Jodeh said she knows local governments are upset about the provision in House Bill 1313 that could cost them transportation dollars — “CML will always have their feelings about the bill,” she said — but she argued that the legislation is crafted in a way that gives municipalities plenty of time and options to prevent that from happening.
Cities could meet the proposed housing goals in a number of ways, including increasing allowable building heights, allowing townhouses in places zoned for single-family housing or allowing apartments in light-industrial or commercial zones.
“For us, it’s not so much punitive as a way to say ‘we’re giving you a really long runway to meet these housing goals,’” she said.
State vs. local control
Polis has long viewed denser housing near transit as essential to reducing housing costs and alleviating traffic congestion, which contributes to climate change.
“What it comes down to is creating a Colorado where people from all backgrounds can live in homes that they can afford near accessible and reliable transportation options — buses, biking, walkable neighborhoods,” Polis said in his State of the State address in January.
“Transit-oriented and connected communities can create a better future for our state and drive our prosperity and our enjoyment with less traffic, more housing people can actually afford, better air quality.”
The need for housing is indisputable. More than half of all U.S. renters — 22 million households — are now considered rent burdened, meaning they spend more than 30% of their income on housing, according to a new study from Harvard’s Joint Center for Housing Studies.
The affordability crisis is particularly acute among low-income households. In Colorado, there are just 44 affordable rental units for every 100 households making below 50% of their area’s median income, according to the National Low Income Housing Coalition. Landlords filed evictions against a record 53,000 households last year.
Many cities, including Denver, promote denser housing near transit already. And Bommer argues that the state could achieve its goals by partnering with local governments to address their housing needs rather than punishing those who don’t follow the state’s lead.
That locally driven approach is at the core of a forthcoming proposal from Sens. Rachel Zenzinger, D-Arvada, and Barbara Kirkmeyer, R-Brighton, that would offer state assistance to cities that conduct housing needs assessments in their communities.
Those who work with the state to do so would be more likely to receive funding through a variety of state grant programs. But there would be no mandate that cities follow through with the administration’s vision for denser development, a nonstarter for some housing proponents.
“From our perspective, that bill essentially maintains the status quo which we know is failing hard-working Coloradans,” said Austin Blumenfeld, the executive director for Centennial State Prosperity, a nonprofit that supports Polis’ land use plans.
In an interview, Zenzinger acknowledged that some cities may still refuse to allow more housing.
“That’s a tough pill to swallow. But it’s also democracy,” Zenzinger said. “There’s a certain level of determination — communities get to set their vision.”
Some housing advocates argue that state incentives aren’t enough to overcome neighborhood-level resistance to the most affordable types of housing.
“There’s a strong NIMBYism component to it — the ‘not in my backyard’ sentiment,” said Cathy Alderman, a spokeswoman for the Colorado Coalition for the Homeless. “We want to give local governments the tools to overcome that. But oftentimes I’m afraid that they succumb to it.
“That’s why there needs to be some state requirements that say all right, you actually have to (allow denser housing) if you want better transit.”
Other housing bills
Another major housing measure recently introduced by Democrats in the legislature is House Bill 1304, which would prohibit a local government in a metropolitan planning organization from enforcing minimum parking requirements starting in 2025.
Then there’s House Bill 1175, a reincarnation of a measure the governor vetoed last year that would give local governments a right of first refusal to purchase multifamily housing buildings that are put up for sale.
Rep. Andrew Boesenecker, D-Fort Collins, said he rewrote the measure to address the governor’s concerns.
“This bill represents a very narrow and tailored approach to preserving affordable housing in the state of Colorado as compared to last year’s (measure),” he said.
Colorado Sun staff writer Jesse Paul contributed to this report.