April 23, 2026 · Local Government & Housing · 18,977 words · 19 speakers · 207 segments
Welcome, everybody, to the Senate Local Government and Housing Committee. I'm sorry for the little bit of a delay getting started, but we're ready to go. So would you call the roll, please? Senators Baisley?
Present.
Ball?
Here.
Lindstedt?
Present.
Liston?
Here. Rich? Here. Exum? Excused.
Mr. Chair. Okay, well, we'll get right to it. Our first bill up to be heard today is House Bill 1114. And I see our sponsor, Senator Ball, is getting set up at the table. So whenever you're ready, we'd love to hear all about House Bill 1114. Senator Ball.
Thank you, Mr. Chair, and thank you, members of the committee. House Bill 1114 is a pretty straightforward bill. It would require that lot sizes for single-family homes be no greater than 2,000 square feet. Research shows that smaller lots can lower costs and boost housing diversity, and large lot sizes, on the other hand, can drive up housing costs and provide less housing options for Colorado. We have in Colorado some of the highest minimum lot size requirements in the country. We also have the fifth highest home prices and the sixth highest rent costs. In Denver alone, where I represent, residential land costs are now about $1.2 million per acre. And those costs are just not sustainable for my constituents in my district. So we'll have a number of witnesses to testify on this bill, but I do want to say at the outset, that we'll hear witness testimony in this bill and then I will be postponing it indefinitely at the end of witness testimony. Do you want to give the coalition behind the bill just some opportunity to explain the issue because I think it's a good issue for us to talk about and learn about here in local government. I know we've got some folks signed up and opposed, so I do just want to make it clear to everybody out there, either in person or remote, that this bill will not continue on past this committee. So if you'd still like to testify in opposition, of course you're welcome to. But we'll hear some panels to talk about it, encourage members to ask any questions, and then at the conclusion I will be PI-ing this bill. I'm happy to take any questions from the committee.
Thank you, Senator. Committee, do we have any questions for this bill's sponsor? Not seeing any. Thank you very much. And with that, we will jump right into the witness testimony phase. And I see we have an order here. This is our first panel. Yes, first panel, I believe, are folks that are in a support position. So let's go ahead and call up Kipland Kolkmeyer, Scott Cox, and Chase Stillman. I don't know if anybody's remote or all in person, but they're remote. Well, I see we have somebody at the table, so why don't you kick us off as you'll introduce yourself and who you represent. We'll start your three minute testimony clock.
KIP KOKMEYER, Thank you, Mr. Chair. My name is Kip Kochmeyer. I'm a retired land use attorney and the former chair of the Lakewood Planning Commission I been a land use lawyer for a long time I just representing myself today This is an incredibly important public policy that at some point the state going to have to deal with Housing affordability is a crisis. Everybody knows that. There's only two things that go into the cost of a home, the building cost and the land cost. we have to find a way to reduce land cost and this is the best way to do it. I will tell you as having worked in land use and working on the Planning Commission, people are clamoring for this. This is what your constituents want. They want smaller houses on smaller lots. So if you want to promote single family home ownership, this is an important way to do it. I will also tell you that this is not just a good public policy. It affected me personally. My wife and I lived in Lakewood for years. It came time for us to downsize. We had a ranch house, 12,000 square foot lot, 2,400 square foot home. Too big for us. Our kids are off and living their own lives. We sold and could not find an affordable, downsized, single-family home in Lakewood. We had to leave our community. And I hear this story over and over and over again from folks. We have older folks that want to stay in the community, and they can't do it unless there is that diversity of housing. And smaller lot sizes is one of the major tools you could use in order to provide that for your constituents. Happy to answer any questions. Thank you.
Thank you. And if you'll stand by, we'll hear from our other witnesses and open it up for questions. With that, Scott Cox, if you're ready to go, we're ready to start your clock, sir.
Thank you. Surveys show that 70 to 80 percent of adults prefer single-family housing. Where they would like that housing to be has changed over time, but not the type of housing they prefer. The recent apartment building boom has helped reduce our housing deficit in Colorado, although we still have an estimated shortage of 100,000 or more homes. Economists estimate that for single family housing to be in balance with job growth, there should be roughly one new house for every two jobs created. In Colorado over the last decade, it's been roughly one house for every 2.8 jobs. If we used 2000 as kind of a pre bubble benchmark for homeownership rate and maintained it, we'd have 62,000 more owner occupied units today. The bulk of recent legislation, both locally and the state level, has been for solutions that will largely be for rent, not for sale. Ongoing construction defect issues mean that high density housing will primarily be for rent, as will 80 years, absent any lot split or minimum lot size legislation. If we do not find ways to allow more single family housing, we are guaranteed that those prices will continue to rise faster than the majority of the population's ability to pay for it. detached homes will become simply become a luxury good. There are a number of good reasons to approve this legislation. You can approve it if you believe in private property rights and the ability of builders to risk their capital meeting consumers needs. If you believe in efficient use of existing and new infrastructure, if you want to facilitate a variety of creative housing solutions, and if you believe in homeownership as a path to stability and wealth building. We will not be able to fix our affordability and especially our homeownership challenges by waiting for interest rates to drop more creative financing or state and local incentives The only thing that will turn the dial on affordability is more housing made more affordable through medium density product and land plans That means using land more efficiently. We would not be breaking any new ground here or experimenting. It's not a theory. you would be approving something that has worked over decades in Houston and created 34,000 additional for sale, detached units, infill units, in a 13-year span. It's the single best housing reform that's been tried in the U.S., and it works. Thank you.
Thank you. And if you'll stand by, we'll hear from Chase Stillman now. Mr. Stillman, if you're ready to go, we'll start your clock.
Thank you. I'm a Colorado housing developer and a guest lecturer at the University of Denver where I focus on how lot splitting and minimum size lots shape our neighborhoods. My goal is to create attainable homes for first-time homebuyers in places that people already live, work, and play. Many neighborhoods across the Front Range contain homes built in the 50s through the 70s. These homes are often 900 to 1200 square feet and they represent some of the naturally more attainable housing stock in our communities. Unfortunately, current regulations often create an incentive to demolish those homes. Across many jurisdictions, subdivisions, and zoning rules effectively require one home on one lot even when the land could reasonably support additional smaller homes. So, when a builder evaluates a property with a modest older home on it, the planning process is straightforward. The only viable redevelopment option under the current regulations is to demolish that home and replace it with a much larger one, often 4,000 to 5,000 square feet. That outcome is not driven by demand necessarily, but by the regulatory framework. In my research and guest lecturing at the University of Denver, I study and teach the redevelopment scenarios that a small local builder or developer faces when evaluating a typical infill lot. When we model options under current regulations, the incentives often push towards demolition and replacement with larger homes. But when we model that same lot under a scenario where splitting is allowed, the economics change dramatically. Instead of demolishing the existing home, the builder often has strong incentive to preserve the existing structure and add an additional modest home on the remaining land. That approach produces more attainable homes, preserves existing housing stock, and allows incremental infill that fits the scale of the neighborhood. This type of housing is often referred to as an urban cottage or missing middle housing. Modest homes built on smaller lots that provide more attainable paths towards ownership. This bill is actually quite modest. It allows jurisdictions to administratively approve splitting and smaller lots and creating additional lots where smaller homes can be built. That policy change helps correct the unintended incentive that currently pushes redevelopment towards larger, more expensive homes. Instead of encouraging demolition, it allows the builders to preserve existing homes and add smaller starter homes alongside them. I believe that Colorado needs more housing options between large single-family homes and large apartment buildings. Policies like these make that kind of incremental infill housing possible. Thank you, and I'm happy to answer any questions.
Thank you, Mr. Stillman. Committee, this is our first panel. Do we have any questions? Senator Bazley.
Thank you, Mr. Chairman. Mr. Kochmeyer, I appreciate your refining down the cost of housing to just those two items. land and building costs. Would you include the regulation costs and the building costs That said to be about 25 of the cost of a new home is government regulation So would you throw that in there in that category Mr. Korkmeyer?
Thank you, Mr. Chairman, and thank you for the question. I would question a little bit the percentage, but you are absolutely right. You know, one of the things that we can do is find ways to lessen the regulation and more reasonably allow housing to be built. And, you know, I have never considered myself a property rights first person, but this really crosses partisan lines. If you believe that people should have the right to do more with their property, lessening that government regulation is the right thing to do. It also happens to be the best thing to get more affordable housing. Thank you.
Thank you. Any committee, any other questions? I do have a question, I guess, for any one of the witnesses. one of the big pushbacks we hear are from local governments that think they have a very vigorous regulatory scheme in place. And, you know, people buy into neighborhoods with a certain expectation that it's going to be single-family homes with, you know, plenty of off-street parking and what have you. made a lot of changes in for as allowing for adus to be developed relieving or eliminating uh off street parking requirements i'm just wondering if this is a one size fits all so it would be a state preemption and anybody that met their criteria would be eligible it's a lot split um i'm just wondering how do you how do you feel about maybe the expectations of the local jurisdiction or certainly the neighbors who bought into a community thinking it was going to stay a certain way. And this could have a potentially a radical change on that. I'm wondering if you've given any thought to that, Mr. Kulkmeyer.
Thank you, Mr. Chairman, and thank you for the question. You know, we hear a lot about how if we make these sorts of changes, things will dramatically be altered. That is simply not reality. Very small numbers of lots actually change hands over time. The things you are looking at today will have an effect decades down the road. And I think that that's an important thing to remember. There's an awful lot of fear that changes like this are going to have an immediate impact. The other thing to keep in mind is that a lot of the folks that are concerned about that are very strong supporters of single-family homeownership. And it is, in fact, an incredibly important tool for people to build wealth, family wealth, generational wealth. Well, this is all about, this sort of change is all about single-family ownership, giving people a chance to buy a home and have the American dream that they don't currently have because they cannot purchase the 5,000-square-foot house on the 12,000-square-foot lot. The other thing to note on this particular bill is, on local control, is it would not go into effect for many years. And that sort of phased-in process is more of an incentive, I would argue, to locals to look at whether this tool works for them. It is not an immediate change even from the local control issue. And the last thing I would say, having gone through a comprehensive plan process in Lakewood over a Two-year period of time and two years to do a zoning code change. This is a very deliberate process that you should see as the involvement of the citizens who are making these sorts of decisions rather than it being mandated from the General Assembly. Thank you.
Mr. Cox or Stillman, did you hear the question? Want to give a response? Yeah, I'll add something. I agree, I think. Mr. Cox, yes, please. Go ahead.
I think the point that was made is highly valid when you look at other cities, when they have a lot smaller lots like Houston. You know, a lot of units spread over a very, very big geographic area is not as impactful to people as they think when they hear numbers. But, you know, I would also say a couple of things. The people who don't want anything to change, first of all, it's unclear whether they are a majority. There's clearly a much more vocal anti-growth movement that shows up for government hearings. There's an asymmetry to it for a variety of reasons, and it's well documented. Second, quite frankly, when they moved into their house, there was somebody probably nearby who wasn't very happy about the change. This has been a consist of cities from forever. And the idea that at some point you simply lock it in because it's perfect and you don't change, I don't really think bears a whole lot of scrutiny. The other issue you deal with here is the prisoner's dilemma, which is if all the cities were separated by wide swath of distance, I think it would be a more valid argument to say, hey, let them make their own decisions. If they don't build enough housing and it kills their job growth or causes issues, you know, that's their choice. But the reality is when cities grew together, it did become a prisoner's dilemma. Cities are capable of supporting whatever they perceive is in their interest jobs, being against housing and letting their housing issues become somebody else's problem. So now that most of our cities have grown and melded together, the ability to make it somebody else's problem is frankly how we got into this mess. And there's really no evidence we're going to get out of it if people can still make that choice.
Thank you. And Mr. Stillman, did you have a response?
I'll echo Mr. Cox. I think he's correct in pointing to history where this has been done and proven before. And the thing to consider is we're watching under current regulations our neighborhoods change already. Many of these communities did support small craftsman-style starter homes that are being wiped out and replaced with large lot line to lot line, 5,000 or 6,000 square foot. In the industry, we call them McMansion, which is a bit of a derogatory term. but this would allow for the prevalence and the retention and the duplication of smaller homes that would meet a lot of the neighborhood character of our existing communities. There's always change no matter what we do. If we don't pass this bill or we do, our neighborhoods will continue to change, but this would allow for change for the better for homeownership and attainability. Thank you.
one final ask is they may a committee have any questions for these fine witnesses not seeing any thank you gentlemen for sharing part of your afternoon with the local government and housing committee So we move on to our next panel These are folks that have signed up in opposition So we'll start with Mayor Jason Gerzee. Ray. Mayor Jason Gray. Kevin Walker, remotely. Ryan Johnson, also remotely. in person, Bev Stables and Janine Rustett. Ms. Stables, it's always a pleasure to see you here in the Local Government and Housing Committee, a frequent testifier. So if you would introduce yourself and begin your testimony, we'll start your clock. Thank you, Chair.
It's always wonderful to be here. Appreciate the opportunity to testify today. My name is Bev Stables. I'm here on behalf of the Colorado Municipal League and our 270 members. I'm testifying today in opposition to House Bill 1114. While we certainly do appreciate the intent behind this bill to address housing supply and affordability, we have serious concerns about its impact on community planning and local land use authority across the state. Land use planning is one of the most fundamental responsibilities of local government. Cities and counties are closest to the people that they serve. They understand infrastructure capacity, water availability, transportation systems, fire risk, environmental constraints, and community character in ways that a statewide mandate simply cannot replicate. Minimum lot sizes are certainly not arbitrary. They are often tied directly to water and wastewater system capacity, stormwater management and drainage, wildfire mitigation and defensible space, school and transportation planning, and much more. A one-size-fits-all statewide mandate undermines decades of careful land use planning and public engagement. Local governments, in partnership with special districts, are responsible for maintaining roads, utilities, emergency services, and schools. Changes to minimum lot sizes directly impact density, which in turn affects service demand and capital investment planning. When the state mandates zoning changes without providing funding or infrastructure support, local governments bear the costs. That disconnect between decision-making, authority, and fiscal responsibility is problematic. In some communities, reducing lot sizes may not meaningfully reduce home prices. In others, it could create infrastructure strain without delivering affordability benefits. Local governments are best positioned to tailor solutions to their specific housing markets. We are concerned about how this blanket change will conflict with other land use laws as well that are already in effect, increasing density near transit, allowing ADUs, reducing park minimums, just to name a few, that are already putting a strain on our infrastructure in planning efforts. House Bill 1114 is not just about minimum lot sizes, but it's about who makes land use decisions in our state. Local communities deserve the ability to shape their own growth in ways that are responsive to local conditions. Thanks for your time and consideration.
Thank you, Ms. Stables. And if you'll stand by, we'll hear from the other witnesses and open it up for questions. Ms. Rustad, please.
Thank you. Good afternoon. My name is Janine Rustad, and I am the Planning and Business Development Director for the City of Aurora. I have over 30 years in land use planning, policy, and law. Like the first witness, I was a land use lawyer for about 11 years. Aurora strongly supports building of attainable housing, especially for sale products. However, we oppose this bill as it usurps the ability of communities to meet local needs to build sustainable and livable communities. Aurora has worked collaboratively with residents developers and our council for over two years to amend our code to increase allowances for small lots to meet market demands to provide attainable ownership housing Our efforts have been centered on livability principles embraced by our community, including street and pedestrian connectivity, a strong public realm and streetscape design, mix of housing types, access to usable open space, and proximity to mixed-use activity centers. These five principles, developed through conversations with our community through open houses and town halls, have been the foundation for our engagement with the development community, people that have the expertise on what the market will support. Multiple developer roundtables have involved technical conversations on what code amendments will be effective in achieving the principles while meeting market demands and constraints. We have worked with our review teams to test concepts on actual projects, including pilot projects. Through these roundtables and other efforts, community conversations, and monthly presentations to council committees, we are almost completed with revising our code, the result of which will increase the ability to develop small lots throughout our city, all while maintaining Aurora as a place we are proud to call home. I should mention I'm also a resident of Aurora, so very proud of what we do. We want to thank Senator Ball and the bill's sponsors and appreciate the postponement of this bill for additional work during the interim. And we are eager to be part of these conversations and efforts, and I'm happy to answer any questions.
Thank you, Ms. Rostad. If you'll stand by, we'll hear from our online witnesses, starting with the esteemed Kevin Walker. Welcome, Mr. Walker.
Thank you, Senator Snyder, esteemed Senator Snyder and members of the committee. My name is Kevin Walker, and I am the City Planning Director for the City of Colorado Springs, and I am here to voice our objection to this bill. Let me make it perfectly clear, though, we are very supportive of providing more affordable housing in our community, more attainable housing. We just are not in support of this particular tool. And there are several reasons for that opposition. First, our current code and our processes allow for lots as small as a thousand square feet. And we did that without the legislature requiring it. And that is what home rule can do for local governments. For that style of development, though, with that type of density to be built in the public's best interest requires thoughtful planning for stormwater facilities, utility access, fire access, utility capacities. That is what our zoning and subdivision codes are written for. And simply allowing this type of lot configuration without requiring thoughtful review is not responsible planning. Second, we all have a NIMBY problem. The way to deal with NIMBY sentiment is not just to jam new subdivisions into their neighborhoods. It is to work the issues with the neighborhoods. may not get the answer that you want all the time, but for sure we do not make NIMBY issues go away by making them accept the power of the state to allow land uses that are disruptive to their neighborhoods at least in their opinion Another way to decrease credibility in managing zoning and subdivision regulations is to make our codes so disjointed that they are not easily explained or understood An example in this particular piece of legislation is that it exempts common interest communities or HOA properties. Our zoning code states completely out of designating properties whether there is an HOA or not. Similar uses that are not treated the same in our code is fundamentally in opposition and to good planning. Something across the street, just because one's in an HOA and one is not, they should have the same regulations if they're essentially the same product. This piece of legislation finds a new property right where the rules were previously understood and accepted in a neighborhood. If our local city council and our mayor think this is a great idea, let us work it out ourselves with our residents. This is legislation that's not needed in our community and we ask that you vote no. Thank you. Thank you,
Mr. Walker. If you'll stand by, we'll call up Ryan Johnson.
Thank you, Mr. Chair. My name is Ryan Johnson. I am the Assistant Town Manager for the Town of Frederick and I've been there for a little over five years and I oversee all of the development related disciplines, but also bring over 20 years of development related work experience. We respectfully also ask for a no vote on this bill for a variety of reasons. As one of the fastest growing regions in Colorado, we're very aware and in tune with the housing needs and the accessibility issues that exist throughout the state. That's why we adopted Dr. Cog's housing needs assessment last year, which very clearly underscored that. And Dr. Cog has actually been a great partner to help bring communities together to help solve some of these issues in the past and going forward. This year, we're applying for several grants to further study how and where it makes sense to apply these types of approaches throughout the community. The concern we have with this bill, and I think it's been mentioned earlier, is sort of the one size fits all approach. One of the things that we learned in the process of updating our land use code, which by the way, was just adopted last month after a three-year process and soliciting input from over 2,000 residents in the community over that timeframe, is they're not opposed to these types of concepts if it's applied appropriately throughout the community. Where there's opposition is if we start to put these types of tools in place in inappropriate locations adjacent to existing development where it looks like it's incompatible or inconsistent. We learned this lesson last fall, actually, through a land use application where an applicant in our historic downtown area had applied to rezone the property, subdivide it, and add several homes on it. We ended up taking between two and three hours of testimony, almost exclusively in opposition on that measure for all the reasons that you're hearing today. And ultimately, the rezoning application failed. Lot size was definitely one of the concerns that they had, given the historical context of the surrounding neighborhood. I think it's also been stated some of the access to utilities is one of the concerns as well. We adopted a completely new comprehensive plan two years ago and our 30-year modeling for population growth contemplates a variety of different adaptable neighborhoods, smaller lots, larger lots, multifamily housing and senior housing in appropriate places, but our water portfolio also is based off of that and that's one of the things that's difficult. Water portfolios take decades to be able to realize the amount of water that you need to provide for your community. And in northern Colorado, where water is about $70,000 a share, that makes that really challenging to be able to do. So with that, I respectfully ask for
a no vote on this bill. Thank you so much. Thank you, Mr. Johnson. And we did call up earlier, but I didn't see him. Mayor Jason Gray, is he online or in the room? Apparently not. So then we have four witnesses who testified. Committee, do we have any questions for these witnesses? I do have a question for you, Mr. Walker. You mentioned that having a local control home rule city like Colorado Springs, you're already being proactive in this area. I think you mentioned lot sizes can be as small as 1,000 square feet in certain conditions. Let's take the example of a property that's zoned R4, which I believe is residential 4, meaning it could sustain four separate units on there. And there's already a 100-year-old home on that house. When a redeveloper comes in, scrapes off that existing house, and puts up two duplexes, is that property then divided into four separately titled individual estates? I'm hoping you can maybe explain that. Something I see happening a lot down in Colorado Springs, and I've often wondered how that's exactly accomplished.
It can be accomplished in a variety of different ways. You can do a subdivision that has, as long as the lot sizes are appropriate, I think our lot sizes in R4 for a duplex would be 3,500 square feet. So that's a little bit smaller, not as small as 2000, but but smaller than a than a standard lot. So you can do that through just a regular subdivision or you can own all four of those lots and you can you can use that as a condominium. You could do a variety of different ownerships. What you can't do is subdivide that into a 2000 square foot lot because it doesn't meet the lot size minimums. You could do that, though, that particular product in a variety of different places, just so long as we have the proper planning and the proper processes to make sure that we have adequate public facilities for those. Great. Thank you.
Committee, any questions? Senator Liston, please.
Thank you, Mr. Chair. I don't have a question. I was just going to say greetings to Kevin Walker. I appreciate his testimony and the good work he does for the city of Colorado Springs. Just say hello.
Thank you, Senator Liston. Nice to see you. Okay. Final ask for any further questions for these witnesses. Not seeing any. Thank you all very much for joining us this afternoon. Thank you. Yellows are already tested. Okay, our next panel will be tomorrow. are Whitney Josh Campbell Jeff Howell and Dan Larson So tomorrow, Whitney is not present. Okay. And you're Mr. Campbell? Okay. And you're Mr. Larson? Okay. So Jeff Howell? Okay. Thank you, Ms. Staples. Okay, let me see. Let me get a couple more people here. If you'll pull up remote. Gordy and Anna and also John Goldman and Mike Rolick. No? Okay. Just have one out of those four? Okay. Who was the first one? Anna? Okay. Thank you. Okay. What about Mrs. Patty McKernan? Okay. Great. And Ms. Jody Nicholson? Okay. Great. Great. That would be a good panel. Okay, we'll start with the folks we have in person. Mr. Campbell, thanks for joining us. Please introduce yourself, who you represent, and we'll start the clock for you.
Mr. Campbell, I am the Senior Strategic Planner with the Town of Erie, and I'm here to speak on behalf of the Town and our requesting of voting no on HB 261114. I believe this takes an overly broad, one-size-fits-all approach that risks at creating unintended consequences for communities across the state. First, the bill significantly limits local control over land use decisions. Local governments are best positioned to determine appropriate lot sizes based on infrastructure and long-term plans. A statewide mandate undermines the abilities of municipalities to plan responsibly for growth. Second, the requirement that jurisdictions cannot use setbacks, frontage, open space, or lot coverage standards in ways that effectively prevent building on new lots raises serious concerns and infrastructure strain and quality of life. These standards exist for important reasons, including ensuring adequate light, air, drainage, emergency access, and neighborhood compatibility. Weakening them could result in negative consequences for the community and could create life and safety issues. Addressing housing affordability is critical, but solutions should be flexible, locally informed, and comprehensive, not imposed upon municipalities through statewide mandated bills. For this reason, I encourage you to reconsider a no vote on this bill. Thank you for your consideration.
Thank you, Mr. Campbell. Mr. Larson, thanks for joining us.
Good afternoon, Mr. Chairman and members of the committee. My name is Dan Larson. I reside in Wheat Ridge and I am a member of the Wheat Ridge City Council having been elected in November 2023 I here today to respectfully confirm the City of Wheatridge Council opposition to House Bill 1114 allowed minimum lot size for subject jurisdictions. It is our understanding the Bill's intent is to support the creation of additional affordable housing opportunities. The City of Wheatridge supports housing opportunities and has been recognized for our comprehensive approach to balancing creation of new housing with the concerns of existing neighborhoods. In 2023, Council approved an affordable housing strategy and action plan. We have met our commitment to grow the city's affordable housing stock by 3% a year. And this year, Wheat Ridge was awarded a $4.5 million TOCI grant. This grant will go toward infrastructure improvements associated with a Foothills regional housing development at Ridge Road. This important new project combines affordable housing and classroom space for Red Rocks Community College and is within the Transit Oriented District along the RTD G Line Corridor. Our Council has approved changes to parking minimums and we have allowed accessory dwelling units. For new affordable housing developments, we have waived parkland in lieu of fees and we have expedited plan reviews. We have added a senior housing program manager to our city staff and provided grant money to support naturally occurring affordable housing efforts in our neighborhoods. In a nutshell, we have clearly shown that we support additional affordable housing in Wheat Ridge. Our concern with HB 1114 is that minimum lot size decisions belong in Wheat Ridge and not through a state mandate. In addition to a clear disregard for local control, this bill would discount local knowledge about neighborhood history, setbacks, water availability, stormwater capacity, and a host of other details that are ignored with this blanket approach to land use policy. Last year, Wheatwood City Council approved our city plan, a roadmap for the next 15 years. The city plan includes our approach to incentivizing affordable housing while monitoring and making course corrections as we go. We believe a top-down mandate on minimum lot sizes that overrides our local knowledge and ignores our community concerns is bad policy and just a plain bad idea. We respectfully ask that you do not support HB 1114. Thank you and good afternoon.
Thank you, Mr. Larson. We'll go on to people online now. Is it Karen Gordy? Am I saying that right? It's Karen Gorday.
Yes.
Karen Gordak. Okay, thanks, Ms. Gordak. Please introduce yourself and who you represent. We'll start the clock.
Okay, thank you. My name is Karen Gordak. I'm a resident of Lakewood, Colorado, and I'm here on behalf of the Lakewood Citizens Alliance. Just weeks ago, voters in Lakewood participated in a citywide election on zoning. This was not low engagement, and this was not confusion. More than 22,000 residents voted to repeal high-density zoning changes. That was 62% of the vote, and more people voted for repeal than voted for our current mayor. That is not ambiguity. That is a mandate, and now this body is considering a bill that would override that outcome. HB 26-1114 does not support housing. It strips local governments of the ability to set basic zoning standards, including minimum lot sizes and setbacks, and replaces them with a one-size-fits-all state mandate. Let's call this what it is. This is not about partnership with local communities. This is not about flexibility. This is the state stepping in to override voters when it does not like the result. Lakewood is a home rule city Our residents have a constitutional right to govern local matters like land use That is not a suggestion and that is not conditional And yet this bill tells our voters that their decisions can simply be overridden at the state level. We're hearing a lot about a No Kings Act at the Capitol, but overriding local voters on something as fundamental as land use is exactly what it looks like when the government acts like it knows better than the people it represents. That should concern every member of this committee, especially those who claim to support local control. Because if the state can override local zoning decisions today, it can override other local decisions tomorrow. Thank you.
thank you Anna Burton Bertenzelli I get that right you did thank you good good afternoon
mr. chair and members of the committee my name is Anna Burton Zetti and I'm the deputy city and county manager for the city and county of Broomfield and I'm here today to ask you to oppose house bill 26 1114 the city and county of Broomfield understands the need for increasing housing across the state. However, we just cannot support this bill. Our opposition centers on the bill's mandated minimum lot size of 2,000 square feet. That figure is dramatically smaller than Brimfield's existing single-family residential lots, and applying it uniformly community-wide would represent a significant and unplanned increase in residential density. There is no geographic focus and no connection to where infrastructure capacity actually exists. By By significantly reducing single family lot size to this degree, Brimfield loses the ability to anticipate and plan for future impacts such as stormwater, sewer, and transportation. We recognize that the bill tries to address this infrastructure concern, but incremental change is the hardest kind to manage. One lot split is manageable, hundreds of them scattered across the city with no geographical pattern overwhelm our ability to track impacts, update our models, and plan capital investments. The bill's infrastructure provisions place the burden of analysis on individual homeowners applying for a single permit, but a single lot split may be perfectly fine while 10 of them in the same neighborhood exceed capacity. The homeowner who applies first gets to build. The neighbor who applies later may find the capacity no longer exists, and local governments will be left explaining to residents why their application is denied when their neighbors was approved, not because the standards changed, but because the cumulative demand was never visible until it was too late. In recent years, Brimfield has prioritized and expanded the housing stock
within its boundaries. Since 2020, we have implemented an inclusionary housing ordinance, established an independent housing authority with over $4 million in funding, and approved more than 6,500 residential units. Of those, 893 were income-aligned units. Just last year, Broomfield updated our medium and high-density residential zoning district, modernizing our zoning standards, creating a new higher-density district, and streamlining the development process. The work was grounded in community engagement and connected to our infrastructure capacity. We remain committed to increasing housing stock for residents of all income levels. However, this bill is not the path forward to accomplish this goal. We urge you to oppose 1114. Thank you. Thank you. Ms. Kerman?
It's McKernan, yes.
McKernan, Ms. McKernan, thank you. Thanks for joining us. Please introduce yourself, who you represent, and we'll start the clock.
Thank you, Mr. Chair and members of the committee. My name is Patty McKernan, and I'm here in opposition to HB 26114. I live in Centennial. I represent myself. Centennial is a city with a home rule charter. I attended city council on Tuesday night, and I and others asked our city council members if they opposed this legislation. They assured us that they did. In fact, some of them submitted written testimony for this particular matter. They ran on honoring the Home Rule Charter. And I'm not a lawyer, but I have stayed in the Holiday Inn before. Let's just start with the proper role of government. 10 to 12 of you deciding how private property should be divided throughout the state is not the proper role of government. In fact, the only role you have in this discussion is to protect our right to private property, not to tell us what to do with it. I am all for deciding to move into a community with covenants or prior zoning because I'm free to do so. But to invest in and to move into an area and then have politicians determine after the fact that I have to accept new rules for my private property is not okay. What kills me is that many of you have tried everything you can to depopulate society, starting with abortion up till birth and now sterilizing children in the name of transgender ideology. And yet you still think we need more housing units? Centennial has 41,000 households and 42,600 housing units. We're good. We don't need any help. And with Colorado losing population now because you've made it unaffordable by regulating or taxing or should I call it feeing everything that moves, why are we still trying to pave every patch of grass and put up buildings? Enough of this. I don't know what wounds you carry that make you want to lord over the citizens, but let's address those wounds and leave the people of Colorado to live free of government overreach. Thank you for pulling this bill. It deserves to die.
Thank you, Ms. McKernan. Carl Onsager, are you in person? Carl Onsager? No? Okay. We'll go to our final person online, Ms. Jody Nickerson. Thanks for joining us.
Thank you, Chair and Committee, and I want to say thank you for that compliment when you started and said this is a good panel. I'm retired in the construction industry and I retired from the Denver Housing Authority Construction Division. The House Bill 26, I'm a Lakewood resident. House Bill 26114 sounds like a great idea. It promises cheaper homes by letting builders use smaller lots, but it's not that simple. This bill takes away the power from local communities to decide what's best for their own streets and neighborhoods. It says every town must allow single-family homes on lots small as 2,000 square feet no matter what. Well, that's about the size of a tennis court. What works in a big city might not work in a small town, and this bill doesn't let us make those decisions ourselves. If we suddenly allow much smaller lots everywhere, we could see more crowded neighborhoods, obviously more cars on the road and more strain on our water sewer schools utilities in general These are all going to have to be affected by the multitude of many more units in one area Voters did repeal by 62 the same issue this month in Lakewood There are other cities that this has also been addressed to. The promises of cheaper homes is nice, but there's no guarantee. Smaller lots could mean more houses packed together, but without careful planning, this is is going to affect everything around it. On your own fiscal page, page three, you state the local government is going to be affected. And if you read that carefully, I don't have too much time to read it for you. The bill is estimated to impact 67 jurisdictions, although some of these local governments already limit the size, but many will be affected by this. If you read this paragraph, you're saying yourself how the local governments are going to be affected. You're saying yourself, and do these local governments really have that much time when they're already, we're already in the hole in Lakewood with our budget. Are we going to be able to have that cushion and be able to have that impact? I don't think so. We need solutions that fit each community. Not a one size fits all. Let's keep the power to make decisions local so we can protect the character and quality of life in our neighborhoods. Please vote no on this and let yes, indefinitely postpone it. Thank you so kindly.
Thank you, Ms. Nickerson. Committee, is there any questions for this panel? Seeing none, thank you all for your time. Before we call our final panel, those that are in favor of this bill, is there anyone else in opposition? Okay, excuse me. Okay, our final panel of those there in favor of this is Matt Fromer, please pros to dice, David Pardo, Tim Pegg, and Sophia Mayotte-Gorel. And Mr. Ted Lighty, you want to come up and pull up a chair? Thank you, sir. Okay. We'll start with Ms. Mia Guerrero. Thank you.
Hello. Thank you. And wonderful job on that pronunciation. I am Sophia Mia Guerrero, and I am here in support of House Bill 1114. I'm here representing myself as a resident of Colorado and of Liquid, but also I bring a background in government affairs and public policy, including work on land use and transportation with Conservation Colorado, leading the housing and homelessness portfolio at the ACLU of Colorado for several years, and serving as a Lakewood City Council member and the chair of the City's Housing Policy Commission in years past. And so you've heard a bit, and I'm sure all of you have heard outside of this committee, about the urgency and scale of the housing affordability crisis here in Colorado And from my perspective I have a recent local elected I a woman in my 30s I hoping to continue to live here in Colorado and in the metro This bill really helps reset the conversation so that cities can focus on real tailored solutions. I also will say another perspective is that I did grow up in Alamosa, Colorado, and I still have a lot of connections in the southern part of the state. and that is still a space that is struggling with housing affordability. The scale and the numbers are different across the state but the issues are very very similar and somebody was just speaking to the capacity that it can take from a local government to try to really create good thoughtful policy. So why would we ask overworked local electeds to try to deal with something that is this simple and this small and this directive when they can really be working to problem solve in ways that are more specific for those localities. Housing is not confined by these municipal boundaries. It is regional and it is statewide and it is national, just as water is, just as electricity is. And some of these regulations need to be being dealt with at that level. Additionally, this in no way would bypass any of those other components. It would not change the city's ability to have overall land use control. It would not change a water district's ability to deny development based on water availability and infrastructure. I also ask, of all these opposition, who has been housing insecure or homeless? Who doesn't already own? This is really such a fascinating conversation at this moment because we know that we're in the situation where there is the majority of people in the state are burdened by the cost of their housing, rent or mortgage, but that is not the majority of who is able to make it into this building to speak with you all. I do finally want to address the question of local control because I am somebody who is very in favor of that. I've sat on CML boards and I've worked with them on various policies over the years, but if local control alone were sufficient to solve this crisis, we just would not be here today. In many communities, decision-making structures allow a very small number of voices to block changes that would benefit the broader public. The election in Lakewood was not just about lot sizes. It was about a 400-page zoning code. And so I want to encourage us to think about the way that this body's obligation is to ensure that those local governments can focus on more specific things in those communities and get some of these bureaucratic items out of the way of the housing crisis. Thank you.
Thank you. Mr. Pick. Thanks for joining us.
Thank you. My name is Tim Pegg. I'm here on behalf of YIMBY North Metro. That's, yes, in my backyard, North Metro. I am here in support of this bill because it reduces local regulatory burdens on the construction of more affordable housing. To put a number on that, using the Jeffco assessor's numbers, the extra square footage on my lot, I own a 6,500 square foot lot, comes out to about $115,000 in the price of my home. That works out to $23,000 that you need to come up with in a down payment to buy that land. For my partner and I, that was the better part of a year saving up. But we're a relatively high income household. For even folks close to the median household income, we're now talking about more than a year delaying home ownership over 4,500 square feet a yard that, frankly, we don't even want that much. And so that makes it really galling to hear the opposition say things like oh well we can plan utilities and we can plan fire access Yes, you can. Fire access comes down to street design, not lot size. Denver itself, where we sit today, is proof of that. As far as utility planning, I can find multiple privately owned water and power utilities that use various fees to make sure that everybody is paying their fair share. These are privately run, so we know they're not hemorrhaging money. They run just fine. So when local officials say they can't plan, the existence of private utility markets really demonstrates that it's their failure. It is not some other inherent constraint on them. And so local property owners should not be burdened with their inability. Finally, we often hear that this is a top-down mandate and that cities are the most local decision-maker. They're not. Cities are cool with top-down mandates as long as they're the top. But the most local decision-maker is the landowner. And so I'm asking the state to protect landowners from overzealous local regulation that artificially drives up the cost of homes and lowers people's quality of life. Thank you.
Thank you, Mr. Pick. Mr. Pardo, thanks for joining us.
Hello. My name is David Pardo. I am one of the policy leads with EMB Denver. and on top of that, I also work in real estate development and spent the last about 15 years in property management. I can talk all day about water and how it gets used and all of those pieces, but the reason I'm here today is much more near and dear to me. I'm a renter here in Denver. I live in a building with almost 400 units. Almost everybody in that building, over 90% of the occupants are under the age of 45. And I have lived there for the last four and a half years since the building first opened. In that time, there have been, including turnovers, close to 1,000 residents in that building. In the last four and a half years, there has been one baby born in that building. One to 1,000 residents. The reality is that the product that we are seeing produced today, the type of housing product, is wonderful for reducing rents. I'm all for building more apartments. Like I said, I'm with Yimby Denver. But the reality is that we are not producing the types of homes that children are born in, that children are raised in. This bill, more than anything should be renamed the Grandchild Legalization Act. What this does is it allows people to build houses that work for families. It allows and re-legalizes what we used to see built all over the state of Colorado, which are starter homes. Small houses that are affordable to people in their 20s and their 30s looking to buy and looking to start a family. The reality is that my generation, by the time we're capable of buying homes, won't be capable of having children. So we are losing out on thousands of potential Coloradans that won't be born in this state because there is no home that works for a family that's just starting out, that doesn't have one parent working in tech and the other working in as a doctor. So to me, as I said, this is not just a question of policy. This is a question of our future. Does Colorado make itself a state where families can have children, where parents can raise their children and then have grandchildren? Or will we be a place where people my age live in apartments until we're past child-rearing age, finally moving into houses when the future generation is gone. So I know this bill won't be going to a vote, but I hope that it does come back because this is critical to the future of the state of Colorado. Thank you. Thank you,
Mr. Parton. Mr. Frommer, good to see you. Thanks. Good afternoon, committee. Mr. Chair,
My name is Matt Fromer. I work on land use, transportation, and climate policy with the Southwest Energy Efficiency Project, or SWEEP. And I'm here in support of 1114. Allowing Coloradans to build smaller, more affordable homes on less land is a key strategy to reduce costs and add supply in existing walkable neighborhoods. It's a win for affordability, the economy, and the environment. I also want to commend the legislature for staying focused on housing affordability. Recent polling shows that three of the top issues facing Coloradans are the cost of living, housing, and homelessness. House Bill 1114, along with House Bill 1308, which is on the calendar next week, are key pieces of the housing puzzle. While recent state reforms have focused on ADUs and larger multifamily projects, those are mostly rentals, and there has been less progress on expanding homeownership opportunities and enabling small-scale incremental development in existing lower-density neighborhoods. Over the past decade, residential land prices in Colorado have risen six times faster than inflation. In Denver, land averages about $1.2 million per acre, and in Boulder, that number is $1.69 million an acre. When land is expensive, how we regulate it matters, and minimum lot sizes dictate the amount of land required per home. Colorado's lot sizes are unusually large, which forces each home to absorb the cost of a large, increasingly expensive piece of land. The result of these regulations, older homes are often replaced with much larger, more expensive ones. In Denver, the average 2024 scrape replaced a 1,300-square-foot home with a 4,400-square-foot home, and 80% of those new homes were priced at $1.4 million or more. This is because smaller, more affordable starter homes have largely been regulated out of existence. The vast majority of residential land in the state is locked up in single-family zoning, and without urban zoning reform, we're basically saying that none of the 106,000 homes we need to close the supply gap will be built in these areas. Instead, we'll see more and more sprawl outside the developed metro area, far from jobs, transit, schools, and other destinations. destinations. These large lot subdivisions consume more water at a time when we're strapped, and they put more people in high fire risk areas in the wildland urban interface. At the same time, household sizes or the number of people living in a home are shrinking. About 25% of Colorado households have just one person, and 36% have two. Many people don't need or can't afford a large home on a large lot, and this bill would help long-time residents downsize without leaving their communities while also making it easier for young families to live near jobs and schools. Communities across the state are already embracing more flexible housing options. By our latest count 61 local governments have legalized accessory dwelling units or ADUs in recent years to comply with the state law with many going above and beyond those minimum requirements ADUs are a great tool, but they are limited to rentals, not for sale. In other words, Colorado homeowners who have excess land are now allowed to build a small home or an ADU in their backyard and rent it. However, they are not allowed to sell that home and the land it sits on, and this bill would change that. with that I look forward to continuing the conversation on this important policy area
thanks thank you Mr. Frommer Mr. Lighty good to see you thanks for joining us no you're fine all right never done it from over here before
Mr. Chair committee members thank you Ted Lighty with the Colorado Association of Home Builders look we understand there's been a lot of policy in this area around preemption we all like local control my members and I prefer to work with our local partners to develop housing. But housing is far from the perfect world right now. When we're territorial about our ideas and power and processes, we're slow to make progress all the way around, not just in housing. But housing opportunity would benefit much better if we were agnostic from which level of government the good ideas come from. 1114 is a good piece of policy. It has the potential to encourage a lot more housing, a lot smaller attainable housing in the single family product types that are highly desirable that you heard about from other witnesses already 1114 is also one of the first policy proposals in a long time at either the state or local level to focus on home ownership many of the housing bills the general assembly has passed will only or mostly benefit rental housing further this represents one of the first proposals in a very long time to be truly free market oriented it says we're going to legalize a greater variety of housing and let the market determine where it works. It does not mandate smaller homes. It does not mandate smaller lots. While many of us proudly herald the free market and advance free market ideas, housing is one area where both state and local governments have determined we have to control it to the point of suffocation, and we are suffocating housing in this state. Let's not be afraid of the market. It does a great job of allocating resources when it's left to do so. As you've heard, this isn't a theory. Houston has proven that a policy like this works. The Houston area has more people than the entire state of Colorado, and its housing is more affordable. Its homelessness rate is actually less, in large part because of policies like this one. Houston doesn't have better stormwater technology. They plan for their housing as well. They aren't any smarter or better at operating their cities than our local governments are at running theirs. It just legalizes many more forms of housing. And since it's been raised by witnesses and committee members, this bill does not impact homes in common interest communities. So where there are covenants where homeowners expect a certain look and feel of their neighborhood, this bill wouldn't affect their community. So I appreciate the sponsors. Thank you, Senator Ball and the House sponsors for bringing this legislation. Thanks for your time today.
Thank you, Mr. Leidy. Committee, questions for this panel?
Yes, Vice Chair Snyder. Thank you, Mr. Chair, and thank you to all your witnesses. Mr. Lighty, the question's for you, representing the home builders. How do the home builders look at this minimum lot size? Is it a, does it facilitate additional construction? I mean, I'm assuming the costs would be considerably lower than buying a conforming lot. So is that something your association has analyzed?
Mr Lighty Thank you Mr Chair Great question Senator Thank you for it Yeah we analyzed it quite a bit You heard from a couple of our members earlier and one of the smartest consultants I known in any from the coast to coast that has counseled many home builders and developers on how to build, where to build, and what types of housing to build. Yeah, this will bring down the cost of housing. Land is a huge piece of housing. It's supposed to be 25% of the ultimate cost of housing. And it's much greater share in Colorado because our dirt is that much more expensive. When you bring down the car, we have, when ours is one of the biggest builders in the nation, they might be actually by volume right now, they have a product that is almost like a townhome. Small square foot, it can be two or three stories, one car garages. They can build it and sell it in the 200s in Houston and in areas of Texas where it's legalized to do so. They can't find cities that will accept that here in Colorado yet. And this is a new master plan community, right, where we're planning all of this together, as you heard from many of the cities. So, yeah, we've analyzed it quite a bit. This is one of the best bills that any level of government – I wish that the local governments would do this, and we weren't having this conversation here. Thank you.
Thank you. I'm seeing no further questions. Thank you for your time. I appreciate it. Is there anyone else in the room or online that is in favor of this legislation that would like to testify and have an opportunity to do so? Sin on the witness testimony phase is closed.
Senator Ball.
Thank you, Mr. Chair.
I'd love to make some wrap-up comments, but I don't know if you want me to do that after I move the bill or prior to.
What's your preference?
You can move the bill and then make your comments.
Great.
I move to indefinitely postpone.
There's the language I was looking for.
Indefinitely postpone House Bill 261114.
That's a proper motion. Final comments.
Thank you, Mr. Chair. Members, thank you for hearing the testimony on this bill. I hope this was thought-provoking, and I think we'll be hearing, you know, bills along these lines in the future, both a little bit next week with 1308, but also in the years to come. I would just conclude by saying, you know, I think a lot of what we've seen in the housing market in Colorado is just supply and demand. I grew up here when it was very cheap to live here, and Denver was sort of a cow town. And Colorado got really, really expensive because everybody discovered Colorado, and millions of people moved here, and we didn't have enough houses for everybody, and we couldn't build them fast enough. And so housing skyrocketed. But we've always had constraints on how much housing we couldn't build. I think, Senator Baisley, to the question you asked, I think you're spot on, that regulations greatly increase the cost of housing. And there are a lot of regulations that we've had on housing, and most of those are related to land use. You cannot build on your own property, depending on your zoning, the house that you would like to build. There's lots of restrictions on how many units, as we talked about with this bill, how large that lot can be. And those are the artificial constraints that, again, restrict the property owner These are restrictions on your property rights on your own land that ultimately drive the cost of housing up And when that happens not only does the cost of housing go up but it actually does not preserve neighborhood character It just contorts the market. My favorite constituents, my parents, live in a tiny little house that is in Corrie Merrill. and it used to be the same as all the other houses on the block, but now the land is so valuable and everybody wants to live near Wash Park. And so they buy the neighboring houses and they tear them down and they build these huge scrapes that take up basically the whole square footage of the lot. And it has completely changed the neighborhood. And it's not because anything happened with the change of zoning. I think people are always a little bit scared of what happens when you change the rules around land use because things will change. There is no change to the land use. It's just that the market became so contorted and the price became so high that the only people who can now afford to live in the neighborhood are upper middle class professionals who have not only millions of dollars to buy those houses, but also to tear them down and build things that look a lot differently. So I think the idea that we can either stay the same and keep our neighborhood character and make no changes or make changes to land use that threaten the character of the neighborhood, I don't think that's right. I think that things will change either way depending on what the market looks like. And I think we've done a good job, frankly, as a legislature in trying to manage this line between the free market and local control. I've worked in local government. I am just first principles very in favor of local control. But the truth is when every locality has rules that restrict growth, the net impact of that is that the cost of housing just goes up and up and up. So thank you for hearing this bill.
Like I said, I hope it was thought-provoking, and we may revisit it in future years. Thank you, Senator Ball. Motion is on the table. Well, before we vote, I just want to thank you for your work and your willingness to continue to work on this policy. Ms. Alanzaro, please call the vote.
Senator. Yes.
Yes, I'm sorry. The motion is to postpone indefinitely.
Senators Baisley. Aye.
Ball. Aye.
Lindstedt. Aye.
Liston. Aye.
Rich. Aye.
Snyder. Aye. Mr. Chair. At the sponsor's request, aye. And that's a unanimous vote to postpone indefinitely. And we will move. If you're ready, Senator Ball and Senator Fritz will, Frizzell, I'm sorry, will move right into House Bill 1313.
Who would like to begin?
Senator Ball.
Thank you, Mr. Chair, and thank you, members of committee. nearly four years ago Colorado voters approved Proposition 123 which dedicated over $300 million annually to affordable housing. That has resulted in what the voters wanted. Since then Colorado has built more than 11,000 affordable homes and supported nearly 100,000 households. Prop 123 in short is working but the formula that Prop 123 included when initially passed needs to be adjusted because the economy has changed and there are local governments that are doing their best to build affordable housing and meet the 3% growth requirements that were in Prop 123, but simply can't do it based on economic ventricle that are out of their control. So House Bill 1313 is really just about adjusting the Prop 123 formula so that local governments who are trying to comply, trying to get access to the state money that the people voted for, can have access and aren't harmed by economic factors that they simply can't control. So I'd like to thank everybody behind the bill. Thank my co-prime sponsor for running this bill and encourage an aye vote.
thank you thank you Mr. Chair and committee members
greetings from health and human services all is well downstairs in the old Supreme Court chamber where I will hasten to after I provide these opening statements thank you to my co-prime sponsor on this I agree since voters approved prop one two three in 2022 it has really become a cornerstone of colorado's response to our housing shortage empowering local governments across the state with resources and structure i know in my hometown of castle rock we have had two different housing projects one of which is an affordable senior housing project completed using one two funds, and that has been really important, especially to our senior community. And I want to be clear, I didn't support Prop 123. I didn't vote for it. I didn't support it. But I believe it's our shared responsibility to respect the wishes of the voters, and they did support it. So, since then, I have, since I got to the House a few years ago, and then since being in the Senate, I have worked on a few different housing bills, one of which I worked on our first year with Senator Lindstedt. just trying to make it easier for, especially for sale, affordable housing to be built, working with organizations like Habitat for Humanity, and try to be creative. Because I think that our housing shortage and creating affordable housing, it is super tricky. It's hard to make deals pencil, especially right now. And one thing that I worked on a lot that I was really happy to see in this bill is the concept of local governments being able to donate surplus land that they may own.
I know that Douglas County, the town of Castle Rock, the town of Parker, they own property. and this actually incentivizes them to utilize some of that excess property rather than just kind of sitting vacant to use that towards affordable housing projects, whether for rent or for sale, and they get credit towards that, towards their baseline. So that was one of the reasons why I wanted to be part of this legislation. I think that it really important that we and I really encouraged that we have reopened the original enacting bill and we revisiting it so that we make sure that we can utilize these funds in an appropriate way that works for our municipalities and counties and works for our citizens So I urge your aye vote Thank you Committee questions for our bill sponsors Yes, Vice Chair Snyder.
Thank you, Mr. Chair, and thank you to the bill sponsors. I actually have a couple of questions coming from Colorado Springs down where I reside in that area. So if it's okay with you, Mr. Chair, I can just ask the questions and dialogue maybe?
Yeah, please do.
Thank you. So I know we have a HUD provision in here. Are HUD-funded projects counted regardless of deed restriction status?
I don't know. I think we'll have to have, maybe we have somebody else, one of our witnesses.
All right.
I'm sorry. Thank you for the question. I'm not sure, and I would defer to our witnesses, who I know will be able to answer that question.
Okay. Thank you.
Well, if I may.
I notice I think there's a 15-year requirement currently in the bill. I know you were thinking about some amendments, so if any of these amendments address these questions, please let me know.
So we have that 15-year requirement.
if you can't include all HUD properties, is there a thought about adopting a tiered affordability requirement based upon investment level rather than the 15-year hard requirement?
So I just had a phone a friend. So in an answer to your first question, there will be an amendment that allows for any development with any affordability mechanism.
Okay.
And L14 will be addressing that deed restriction issue.
My second question deals with NOAA's, naturally occurring affordable housing, which I don't believe is accounted for in your bill. And I understand that it's not something DOLA tracks, so they have no information on that.
Does your amendment do anything to recognize
or incorporate that into the calculations?
Thank you, Mr. Chair. So I'll again defer to our future panels to answer this, but I believe this is the area where DOLA does not currently track some of this information and there would be some significant compliance costs if it were to account for this. So I don't believe that is covered by L14, but I'm also going to plead ignorance if I've said that wrong because I know we'll have some panelists who can speak more in depth to L14, which I think directionally does address this and your previous questions.
If you don't mind, I'll just throw these questions out so when the witnesses come up, maybe they'll have an answer prepared. Something about a good faith waiver for jurisdictions demonstrating significant effort but are facing structural constraints. Is there anything in the bill or in the amendment that would recognize that? I know it's a pretty vague and squishy thought.
Can you repeat the question? I'm not sure I understand.
Somehow allowing good faith waivers for jurisdictions that are showing sincere and strong effort but are just unable to meet the goals facing due to structural constraints I not sure what that implies Yeah I mean I think I would say that I think that the intent of the bill overall right
But, you know, we're trying to put some metrics around what good faith means, right, if you aren't able to hit the current 3% requirements. But the whole point of the bill is to discount, for instance, what local governments are asked to do to have this funding available to them so that governments who are making good faith efforts but have economic headwinds still qualify. So there's no sort of good faith exemption written as such because I think that would be difficult to administer, but the way that this changes the formula is sort of intended to be a good faith exemption for local governments that are making a best effort.
And finally, is there any alternatives provided for jurisdictions who are unable to contribute land? It's got to be a tough question. The answer is a tough question to ask. I'm not sure.
Can you explain just a little bit about what you mean by unable to contribute land?
Well, a lot of these affordable housing projects rely upon maybe surplus properties or properties that are owned and unused by a city, a home rural city or something. But in a case where they don't have that ability, are there any alternatives in the bill for jurisdiction that doesn't have that option?
Not that I know of. again, I'll defer to future witnesses to state, but I will say, I mean, you know, my district is maybe the densest district here at the state. And, you know, Denver does not struggle with availability of, you know, buildings or units to make affordable. So I would be surprised if there's a local government where there's like literally no place to build affordable housing or to make housing affordable. Maybe that's the case. I just haven't seen it. It's not an issue where I am, but I'd defer to witnesses maybe to give you a more in-depth answer there.
Sure. Well, I can tell you, my little town in Manchu Springs, we're pretty much built out. So our only options are redevelopment, scraping off a falling-down 1950s motel property and redoing that. So I think that was the thought.
Yeah, and just to be clear, I think what it has looked like in my district is very much conversion, right, not necessarily new build. So, yes, I think there's certainly places where new build would be difficult. That's probably true in Denver. But I know in Denver we've had success with converting existing units to affordable, for instance.
Thank you very much. Thank you.
Any further questions for our bill sponsors?
They can donate money.
Seeing none, we'll go into our witness testimony phase. Our first panel, Ashley Wiesner, Katie McKinnon, Kinsley Halstead, and Zach Martinez. Please come to the dice. and we will start with manager Wiesner
thanks for joining us good afternoon and thank you Mr Chair I Ashley Wiesner Proposition 123 Community Support Manager at Dole Division of Housing here to represent the division in support of HB 261313 Thank you to the sponsors, Senator Ball, Senator Fizzle, Representative Baisnecker and Stewart, for bringing this important bill to the committee. We also thank the affordable housing stakeholders and Colorado voters who supported Proposition 123's creation. This fund has seen great success with 217 jurisdictions opting in and over 100 jurisdictions have now implemented fast-track processes. Prop 123 has also served over 89,000 households with 10,956 units. However, Prop 123's 2022 unit goals, based on a 3% growth target, are now unrealistic due to high construction costs, rising interest rates, and labor shortages. The inflated baseline uses census data requiring an unachievable 3% annual statewide increase that doesn't align with community needs. The current baseline is limited by outdated census data. However, the methodology proposed in 1313 uses a layering of new residential building permits and local job growth. This approach more accurately reflects actual building activity and workforce housing demand. The final unit count results in a number adjusted for local conditions. The bill further enhances flexibility through an incentive structure to support the development of hardest to create units through flexible and additional credits, unit credits. Key amendments will also refine the language by focusing on formal affordability restrictions instead of a more limited deed restriction and including greater flexibility for the affordability period in both new construction and conversion projects. 1313 grants DOLA discretion for an adjustment waiver if a jurisdiction's new commitment is significantly higher and meets other requirements, offering flexibility while maintaining Prop 123 stretch goals. The bill also allows a good faith effort waiver for the 24 to 26 cycle. This prevents exclusion for jurisdictions demonstrating meaningful progress and engagement with DOLA while recognizing the original laws and flexible metrics. 1313 ensures our affordable housing strategy is data-driven, economically realistic, and equitable across every corner of Colorado, and I urge you to support this important bill. Thank you.
Ms. McKenna, thanks for joining us. It's on the table there. Sorry about that, newbie.
Thank you, Mr. Chair and members of the committee. My name is Katie McKenna, and I'm here today on behalf of Archway Communities in support of House Bill 1313, including all of the amendments that are being brought today, but especially L016. Archway is a nonprofit affordable housing developer. We're an owner, an operator, and a service provider, and we've been working in Colorado for the last 50 years. I want to thank the sponsors, Senator Frizzell and Ball, and Representatives Basenecker and Stewart, as well as the Governor's Office and Department of Local Affairs for their leadership and the thoughtful and collaborative stakeholder process that went into this bill. Colorado is truly leading the way nationally with Proposition 123. It's become one of the most important affordable housing resources for us in Colorado, and at Archway, we've had the opportunity to utilize all three programs for rental housing, so that's land banking, concessionary debt, and equity. And they're helping us move forward projects that we wouldn't be able to do otherwise. A resource this significant is also going to need ongoing care and evaluation, and that's what you're doing today. Updating the baseline requirements and moving forward towards a more achievable framework where more communities can access these funds in a predictable way helps affordable housing developers like me be able to bring projects online without taking risks that nonprofits aren't able to. We're also encouraged by the bill's incentive structure, particularly the focus on supporting housing for the lowest income households and those who've had experiences of homelessness. These households face the greatest barriers to accessing stable housing, and to date just 17% of the homes created with Proposition 123 have served these households. Strengthening the incentives for deeply affordable and supportive housing is a great step toward better aligning these resources with the areas of greatest need. I urge you to support the bill and I look forward to continuing to work with you all and with sponsors and partners to ensure that Proposition 123 reaches its full potential and continues to be a very valuable resource in Colorado. Thanks for your consideration and I'm happy to answer any questions.
Thank you, Ms. McKenna. Ms. Halstead, thanks for joining us.
Thank you very much, Mr. Chair, members of the committee. My name is Kinsey Hasted, and I'm the Director of State and Local Policy for Enterprise Community Partners here in Colorado. Enterprise is one of the nation's leading affordable housing organizations, seeking to increase the supply of homes affordable to folks living on low incomes and housing stability through programs, capital investments, and policy work at all levels of government. I'm here to share Enterprise's support for House Bill 1313, with thanks to the sponsors, the administration, and lead proponents for their commitment to making Proposition 123 work for those who need it most and for their continued engagement of many stakeholders. Enterprise appreciates that Proposition 123 provides funding for a range of affordable housing needs, housing stability, and homelessness interventions, and particularly that beneficiaries of financing for rental housing explicitly include Coloradans living at 60% of their area median income or less. Even as recent housing supply increases in some areas of the state have provided more choice and lower costs for renters with incomes at 70% or 80% their area median income and higher, lower-income Coloradans continue to struggle to find and sustainably afford a home. This includes working people like many of our teachers, health care providers, construction laborers, social workers, janitors, and service industry employees. It also includes people living on fixed incomes like older adults and people living with disabilities and those exiting chronic homelessness. It simply takes more public subsidy to make rental homes affordable for these Coloradans. Enterprise, therefore, particularly supports the incentivization structure in House Bill 1313, particularly incentivizing income-restricted units affordable to extremely low-income residents. We further appreciate the bill's clarification that units in mixed-income properties count toward a local government's affordable unit goal only if they're in a property with formal affordability restrictions. Enterprise also cares deeply about preserving existing affordability. We're therefore thankful for House amendments now in the bill that clarify that units whose affordability is saved from expiring and instead safeguarded for at least another 15 years will count toward the local government's unit goal. And while I defer to Zach Martinez or our colleagues from the state I would also be happy to speak to the 15 questions from Senator Snyder I will also say that we had the opportunity to review and back the amendments you will consider today. So Enterprise urges your yes vote, and I appreciate your consideration. Thank you.
Thank you. Mr. Martinez, thanks for joining us.
Thank you, Chair and committee members. Thank you for the opportunity to testify in support of House Bill 1313. My name is Zach Martinez, and I'm the Director of Policy and Advocacy at Gary Advocacy, a Colorado-based policy organization committed to making Colorado the best place to raise a family. Our organization has been working in affordable housing and homeownership in Colorado for decades, but most notably, we were the lead proponents of Proposition 123 back in 2022. Since its passing, Prop 123 has financed over 11,000 affordable homes, served nearly 90,000 Colorado households, and supported 120 local governments with planning and capacity grants. Similarly, a recent economic analysis by ECHO Northwest found that Prop 123 resulted in nearly 14,000 jobs created, $6 billion invested in Colorado's economy, and for every $1 invested in Prop 123, the state receives 25 cents in additional state revenue. Prop 123 is the largest housing financing program in the state and produces thousands of units that do not have to rely on federal funding. And at the same time, it needs a little adjustment. The original Prop 123 language used crude structures using dated data that wasn't designed for this purpose. 1313 will be more dynamic. It relies on data local governments collect themselves, the number of new units permitted. And it focuses affordable housing in communities that have job growth and can build housing. This leads to a structure where we are holding local governments to building only when the economics makes sense to build and where the housing will be needed in the future. This new process will also create additional incentives for home ownership, permanent supportive housing, and deeply affordable housing units, all of which are notoriously hard to build. Additionally, this process also recognizes local governments that go above and beyond by incentivizing local governments when they donate land for affordable housing and work in partnership with other jurisdictions and when they exceed their target numbers in prior cycles. Accountability is hard. Housing markets are dynamic and complex. This new process takes into consideration these realities and is a true representation of a lot of stakeholdering to get to a good solution. Simultaneously, this process upholds the goals of Prop 123 for local governments to take ownership over the building, the affordable housing their communities need. It's also important to note that without this bill, most local governments would be disqualified from Proposition 123 for one year because they're not meeting what even we as proponents of Prop 123 recognized was an unreasonable goal. That includes many of the jurisdictions that this committee represents. I won't name them all, but it's many. And I'm really proud of this new structure represented in 1313. It maintains accountability and is grounded in real data. It creates more transparency and it is reasonable. For those reasons, I urge a yes vote. Thank you and I'm happy to answer questions.
Thank you, Mr. Martinez. Committee, questions for this panel?
Yes, Vice Chair Snyder. Well, I have to ask Mr. Martinez. So you were a strong proponent of 123, but you recognized that maybe the goals were a little ambitious or aspirational? Was that a correct statement?
Mr. Martinez.
Thank you, Chair. Thank you, Vice Chair. Yeah, ambitious. Yes they were very ambitious The numbers were high I think the reality is most local governments will not meet their existing numbers which is why there both a good faith waiver for the current three cycle we in and we're reworking the future cycles. That way numbers will be more tied to actual economic development and housing development rather than numbers that are based off of census data that is not meant for this purpose.
Great. Thank you.
Vice Chair Snider.
Thank you, Mr. Chair, and I'm sorry I've lost your name. But you've offered to further elaborate on some of the questions I asked the bill's sponsors. Do you need those repeated, or did you have some thoughts to share? I'd love to hear them.
Ms. Hastett.
Thank you, Mr. Chair, and thank you for the opportunity, Senator Snyder. And I will again start by inviting any of my colleagues up here to add or correct anything I offer. On the question of so-called naturally occurring affordable housing or NOAA, I think there are two things that I would say about that. One, I believe the new structure of Proposition 123 and the ability for local governments to more accurately account for increases in their units is very helpful. and that part of the flaw of the existing structure for setting goals was that there was a requirement to include NOAA in baseline estimates of affordable housing. That's incredibly difficult to do. It is something, you know, enterprise is always pushing for consideration of NOAA and preservation alongside production. However, including NOAA in baseline estimates of existing affordable housing that is already in a community is difficult and artificially inflated baselines. So recognizing that. That will no longer be part of the process going forward. Secondly, I do appreciate that House Bill 1313 does provide for Proposition 123 to go to preservation activities, not exclusively new construction. So part of this would be, for instance, if a developer uses funding and goes and acquires an existing NOAA property and puts some kind of affordability restrictions on it. Those new affordability restrictions would be able to count toward new affordable units that the community has created because they have kind of either, in the terms of NOAA, they are maintaining and putting restrictions and formalizing the affordability of that property for at least 15 years to come rather than leaving it open to market acquisition and increase to market rents. House Bill 1313 also provides for a local government to be able to count the recapitalization or re-syndication of an existing deed-restricted or formally affordable property. So if, for instance, there was a tax credit property in your community and its last affordability restriction was set to expire during your three-year Prop 123 cycle, and that developer got financing and what it needed to be able to extend at least by 15 years formal affordability on those units that would have otherwise been lost in the three-year Prop 123 cycle. That extension of affordability that would have otherwise been lost would be able to count toward the local government's unit goal. Of course, all of this alongside new construction.
Great. Thank you.
Mr. Martinez, you want to weigh in?
Yes thank you Chair Thank you Senator Snyder for the questions I wrote them down That way I could respond to all of them I think L014 will address the deed restriction question you had The original language did say deed restrictions We moving it to just affordability mechanisms to make it broader because not all affordable housing does have a restriction attached to its deed So that will be more flexible Ms Hestet said on the NOAA thing perfectly, I think one of the big issues that this creates is there's no defined definition of what naturally occurring affordable housing is. One of the things that led us to being way too ambitious in our original Prop 123 numbers is that the census data uses cost-based analysis for whether a unit is affordable, which means if you've lived in your home since more than 10 years, your home is very likely to count as affordable, even if it's nowhere near affordable, just based off of the fact that your mortgage is based off of the cost of your home 10 years ago and not based off your cost of your home today. But those units are not naturally occurring affordable housing in the literal sense. and then there is a good faith waiver within the existing bill it starts on page 10 and i think is quite flexible and reasonable for local governments in the current cycle and then the last piece is that there are additional incentives for local governments that don't have land to donate including incentives for building units that are available for homeownership, units that are below 40% of AMI, and units that are built through a cross-jurisdictional collaboration.
Wonderful. Thank you. Okay, seeing no further questions, thank you for your time. Thank you for the information you shared. Okay, our next panel, Brian Roseburg, Katie First, Karen Kallenberg, and then Mr. Surratt, if you'll pull up Melissa Cook, Commissioner Pogue, and Commissioner Capelli. Okay, we'll start to my left, your right.
Hi, members of the committee. As you can tell, I am not Karen Kallenberg. She is home sick today, so she kept her germs to herself, but I'll give her testimony. My name is Karen Kallenberg. I'm the executive director of Habitat for Humanity of Colorado. Habitat builds affordable for-sale housing in 45 communities across our state. Habitat homeowners are teachers, health care workers, service employees, and other essential workers who contribute every day to the strength of our communities. Habitat for Humanity supports 1313 and the amendments being proposed and shares the bill's goal of ensuring that communities across Colorado can utilize Proposition 123 funding effectively to address the housing affordability crisis. Affordable homeownership development is hard, and we appreciate the sponsors' recognition of this and their innovative approach to incentivizing homeownership. In the communities Habitat serves, land costs have increased between 48 and 286 percent. So this bill will encourage local governments to donate land, helping to reduce the cost and spur development. I want to emphasize the impact of Proposition 123. Because of this investment, Habitat has doubled our production statewide. Through Prop 123, the state has increased its investment in Habitat's affordable homeownership programs by 217%. This has been very impactful. In Greeley, funding has been instrumental in increasing production from seven homes to 50 affordable for sale homes annually. In Pagosa Springs, Prop 123 funding has been the catalyst to triple their historic build capacity, and they have leveraged Prop 123 to complete modular homes equipped with net zero roof solar top panels. In Montrose, the funding is supporting homes for families like April, who is a veteran and works locally at a nonprofit. So Prop 123 funding translates into real families achieving economic stability, improved overall health and well-being, and these benefits are precisely what our state needs in the face of historically high cost of housing and supply shortages. We appreciate the sponsor's commitment to reducing barriers to successfully utilizing this funding source, and we respectfully urge the committee to support 1313 and ensure that Prop 123 works for all Colorado communities. So thank you for your time and your commitment to expanding housing opportunities across our state.
Thank you. Ms. Kellenberg would be proud of you. Thank you.
I hope she's listening from her sickbed and she can tell me I did a good job.
Ms. First, thanks for joining us.
Thank you, Mr. Chair, and good afternoon committee members, and thank you for a break from the PUC sunset downstairs. My name is Katie First. I'm the legislative director for Colorado Counties, Inc., the statewide association of Colorado's county commissioners. CCI is in support of House Bill 1313, and we are deeply appreciative of the work of Senator Ball, Representative Basnecker, Gary Advocacy, and the Department of Local Affairs in their tireless work on this bill. Many had identified the problem with the baseline calculation for Prop 123, but these groups are the ones who drilled down to identify solutions, and CCI is very grateful for their work. The proposed formula is much more responsive to actual community economics, whereas the current formula relies on data that often lags behind on-the-ground economics. And in the event a county or other local government still struggles, there is a new waiver process to account for local nuance while still ensuring the county is complying with the requirements of the program. I realize this is not exactly what voters approve through Proposition 123. However, this formula has identified data-informed methodology that keeps local governments accountable for their use of public dollars, and I do believe that that is still very much in line with voter intent. Generally, I know from this committee that there are concerns at times about government-subsidized housing. This program and many other programs that local governments use to promote affordable housing has been voter approved. And if we are stuck with the current baseline calculation and there becomes a perpetual problem, which we are anticipating where most local governments cannot meet their targets, then those local governments are not eligible for the funding for another year and cannot utilize the program. And I believe that that also very much flies in the face of the voter intent, which was to build more affordable housing. So with that, I hope you too will support House Bill 1313 today.
Thank you. Thank you, Ms. First. Director Rosebud, thanks for joining us.
Thank you, Mr. Chair and members of the committee. My name is Brian Rosberg, and I'm the Executive Director of Housing Colorado, a membership association representing organizations from around the state who are building, preserving, and operating housing for those on low and moderate incomes. I'm here to testify in a support position on House Bill 1313. We have worked with sponsors, proponents, and other affordable housing advocates on amendments you will consider later today, and we support this bill, and we believe these amendments will only make the bill better. Housing Colorado was a supporter of Proposition 123 when it was on the ballot in 2022 We have worked since then to help make it more equitable and better able to serve the intent that voters had in mind when they passed the initiative This year marks an important milestone in Prop 123's existence, and House Bill 1313 will improve upon the law in several important ways. As you've heard, it creates a waiver process for jurisdictions who have made progress toward their current goal or have met the new goal under the proposed bill. We hope that this process will ensure a large number of jurisdictions will remain eligible for Proposition 123 funding. Second, the move away from a 3% growth target for affordable housing units to be produced to one tied to a function of building permits and job growth
will more accurately reflect the needs of communities around the state. We believe this formula will lead to a more equitable distribution of resources and development of housing. Finally, in addition to the new formula, we are heartened by the incentives included in the bill for some of the hardest-to-build housing types. While we would have preferred to see an incentive for preservation included in the amendments that were proposed in the House, we are nonetheless eager to see if and how these incentives will help to build these housing types, while at the same time helping jurisdictions remain eligible for Proposition 123 funds in the future. We are very supportive of this bill and the amendments that you will consider today. We thank the sponsors for their responsiveness and openness, and we thank you for your time today.
Thank you, Director Rosberg. Now we'll go online to Director Cook.
Thank you for joining us. Thank you, Mr. Chair and members of the committee. My name is Melissa Cook, and I'm the Director of Housing and Citizen Services for the City of Pueblo. On Monday, March 23rd, the City of Pueblo Council signed a resolution in support of House Bill 26-1313, and I am here today to express this strong support. Under the current Proposition 123 framework, the City of Pueblo faces an unrealistic and unattainable requirement. We must produce 1,206 new deed-restricted or Proposition 123-funded affordable housing units over a three-year cycle. This is more residential construction than the City of Pueblo has produced in any three-year period and decades, let alone specifically documented affordable housing. This unworkable requirement stems from Pueblo's high concentration of low-income households and naturally occurring affordable housing within the community. As a result, without this bill, the City of Pueblo, local nonprofits, and every developer we partner with would become ineligible for Proposition 123 funding in 2027. This bill fixes the problem by replacing the rigid 3% mandate with a fair, data-driven and targeted approach based on actual permitting history and local job growth. For Pueblo, this new target drops dramatically to approximately 120 deed-restricted units over three years, which is a realistic goal. For comparison, Pueblo's current target is over 1,200 units, while similar-sized cities with higher average incomes, such as Centennial and Westminster, are required to only produce 108 and 271 new housing units, respectively. In 2022, Pueblo voters supported Proposition 123 with the understanding that it would help communities like ours increase affordable housing. What we could not have anticipated was the way it was written would unintentionally penalize Pueblo, not only because of our high poverty rates, but also because of our previous success in creating naturally occurring affordable housing, effectively blocking us from the very funding designed to support the communities most in need. The City of Pueblo has been making great progress in increasing our affordable housing stock and is committed to continuing this work Without this legislation and without access to Proposition 123 funding in 2027 the City will face significant barriers and a slowdown in affordable housing development. I respectfully urge you to give this bill a favorable recommendation,
and I thank you for your time. Thank you, Director. Commissioner Poe, thanks for joining us. Thanks for your patience.
Thanks for having me, Mr. Chair. Good afternoon and members of the committee. My name is Tamara Pogue. I'm a Summit County Commissioner and the Chair of Counties and Commissioners Acting Together. CCAT works to bring a unified county voice to the Capitol in support of opportunity, equity, and sustainability for our communities. I'm here today to express our support for House Bill 261313 and to thank the sponsors sincerely and the stakeholders for the particularly thoughtful engagement. CCAT staff, commissioners, bill sponsors, and partners have spent significant time working through the real-world impacts of these baseline adjustments, and that collaboration has been extremely meaningful to us. In particular, we are encouraged by the updated waiver language that allows local governments to demonstrate good-faith efforts through multiple pathways. This is a critical improvement in our opinion. It recognizes that a one-size-fits-all approach to housing production does not work in a state as diverse as Colorado. Counties vary dramatically in geography, workforce trends, land availability, and infrastructure capacity. Some of our communities experienced very large baseline increases, in some cases exceeding 50%, which can be extremely difficult to meet despite strong local commitment to housing. The waiver process, along with direction to the Department of Local Affairs to consider these realities, is an important step towards ensuring the program is both ambitious and achievable. We also appreciate the continued willingness from DOLA and sponsors to engage directly with counties on how this waiver process will be implemented on the ground. That level of partnership is essential to success. Just as importantly, the success of Proposition 123 depends on strong workable incentives for local governments to participate. Counties want to be partners in increasing affordable housing, and ensuring these incentives remain meaningful, attainable, and responsive to local conditions is key to achieving the outcomes we all share. At its core, Proposition 123 represents a shared commitment to addressing Colorado's housing challenges. HB 1313 moves us closer to a framework that maintains accountability while respecting local conditions and constraints. Thank you in advance for your support, and I'm happy
to answer any questions. Thank you, Commissioner. Commissioner Capelli, thanks for joining us. Thanks
for your patience. Well, thank you, Mr. Chair and members of the committee. My name is Jonathan Capelli. I'm the Executive Director of the Neighborhood Development Collaborative, which is a coalition of 25 nonprofit and public affordable housing providers and community development providers. So NDC was an original supporter of Prop 123, but we're speaking today to recommend a support position for AP 1313 because we believe it makes important changes to how we calculate the Prop 123 baseline. As you've heard today, you can kind of think of the baseline today as being tied to past historic housing efforts is one way of thinking about it. So meaning after calculating the number of existing affordable homes in a city or town, it then requires those jurisdictions to increase the number by 3% per year in order to stay eligible for future funding. So depending on the starting conditions of any given jurisdiction, something that current policymakers don't have that much control over or any control over, that 3% increase could be a very high number or a very low If you have a lot of affordable housing already, it's a high number. If you don't, it's a lower number, further complicated by the naturally occurring affordable housing that others spoke to. So in short it not quite the right incentive structure and it not really tied to or necessarily reflective to current needs or development capacity This bill tweaks this by looking at what affordable housing has actually been built over the last three years a measure of capacity and then multiplying it by jobs growth a measure of housing need It's straightforward, rooted in data, doesn't punish jurisdictions or reward them based on conditions they have no control over. That plus the proposed waiver process means that it's both capacity realistic and needs responsive. We also appreciate how 1313 goes a step further by incentivizing projects such as very low income and home ownership development, things that despite the high need for them are notoriously difficult to build. And finally, we support the amendments before you, particularly L016. As you all are probably aware, Prop 123 is going to be cut by $130 million this year. That's 40% of its total funding and 75% of its affordable rental funding. So this amendment spreads the impact of those cuts over three years, a move that we help mitigate an otherwise devastating loss of momentum that concentrating the impact of those cuts in just one year would represent. So Prop 123 has been incredibly impactful in communities across Colorado. So this bill allows them to continue to have access to those funds while also continuing to incentivize everyone to address housing needs as best they can. So with that, thank you for your time and humbly request that you support HB 1313 and its amendments. Thank you.
Thank you, Commissioner. Committee, any questions for this young veteran panel? Seeing none, thank you all for your time. Thanks for the information you shared. Is there anyone else in the room or online that would like to testify in favor of this legislation that had an opportunity to do so? Seeing none, the witness testimony phase is closed. And we'll let the sponsors get resettled and we'll move into the amendment phase.
Senator Ball. Thank you, Mr. Chair. We distributed three amendments, but we're actually just going to move two. We had some feedback actually during committee hearing on amendment L15, some small technical changes so it would be a little more complicated to amend the committee report on the floor so we're going to hold that today and then we'll bring a very similar amendment to L15 on the floor. We do have amendment L14 and L16,
so I will first move amendment L14.
That's the proper motion to tell us about amendment L14. Thank you, Mr. Chair. So we talked about this during the witness testimony at length, but this is the amendment that removes the deed restricted language and replaces it with formal affordability restriction for allowing more flexibility in what affordability mechanism is used as determined by DOLA. This amendment responds to stakeholder feedback to ensure that Prop 123 is not just limited to a deed on new construction and conversion projects. The amendment also collects language on the good faith effort waiver to provide clarity on the eligibility criteria. It simply adds and, and then renumbers and letters the subsequent paragraphs. I ask for an aye vote. Thank you.
Any questions, committee on amendment L014? And is there any objection to Amendment 14? Seeing none, Amendment 14, L14 is adopted.
Senator Ball. Thank you, Mr. Chair. I move Amendment L16.
That's the proper motion.
Tell us about the amendment. So Amendment L16 is an amendment that allows the Treasurer to spread the cut from this year into Prop 123 over three fiscal years so that it doesn't all hit at once. This is possible because of the way Prop 123 funds accrue into the state affordable housing fund. So in effect, this will make it so that OEDIT takes cuts over three years of $50 million, followed by $40 million, followed by $40 million, rather than a lump sum, which would have been much more disruptive if that all happened in a single year. And I encourage an aye vote. Thank you.
Questions on Amendment L16?
Yes, Vice Chair Snyder. Thank you, Mr. Chair.
So are we talking about the money that was taken back by the governor's office out of 123, which was in the ballot measure?
He said 40, 40, and 50.
So that was 130 million?
Correct.
So 130 is the total amount.
I believe off the top of my head that that's the amount that was transferred out of the fund this year to balance the budget.
So, yes, that's the same money that we're talking about here.
Right.
Vice Chair Snyder.
As a CHFA board member currently, we're intimately aware of the cuts that were taken away. But so we have a mechanism that will allow us to apply $140 million to the upcoming budget deficit, but only account for it over three years Senator Ball You can explain it better than I can Senator Ball is phoning a friend
I'm phoning a friend here. Sure.
Mr. Martinez, thanks for helping us.
Yes, thank you, Chair and Vice Chair. It's great to be up here. Yes, so the ways to make this the most simple is that the way in which Prop 123 collects revenue is it is a monthly transfer into the state affordable housing fund on the first business day of every month. That money sits in the account and accrues over a full 12 months and then is transferred to the financing fund and the support fund on July 1st, so the first day of the fiscal year. What this amendment would do is it says the first $80 million that hits the, what I'll call the parent fund, the fund that holds the money until July 1st, can go to the financing fund in the current fiscal year. So we are not taking away the $130 million cut that was used for general fund balancing in fiscal year 26. We're just saying let's take the first $80 million that accrues in fiscal year 27, allow the state to invest that money into affordable housing. So it functionally feels like a $50 million cut to CHAFA because $130 million minus $80 million becomes $50 million. And then it does it the next fiscal year as well. It says the first $40 million that accrues into the parent fund can go to the financing fund. That way, the $80 million you lost, you get $40 million that backfills it. So it feels like a $40 million loss for the next two years. And that is able to work without having any impact to the general fund. The best example of this is how the marijuana tax the marijuana cash tax fund works It works more like what we moving this to but this is just a temporary change in order to spread the negative impacts that will be experienced for affordable housing
Brilliant. Thank you. Thank you.
Okay. Any other questions on Amendment L-16? Is there any objection to Amendment L-16? I see it none. Amendment L-16 is adopted. Bill sponsors any more amendments?
No.
Okay. Blessings to you. Committee, any amendments? Blessings to you, too. The amendment phase is closed. Final remarks.
Senator Ball. Thank you, Mr. Chair. Good bill. Vote yes. I think this bill is important so that we can effectuate the intent of the voters when they voted for Prop 123 and allow for local governments to continue to make use of the funds that should be available to them. Senator Verza.
Thank you, Mr. Chair. Thank you, Committee, for your time today. I feel really good that this bill better reflects the real-world housing productions, and it supports stronger regional collaboration and expands participation. for Prop 123, we created a vehicle, the voters of the state of Colorado created a vehicle for promoting affordable housing and also trying to remedy our housing shortage. And it has not been as smooth from an implementation standpoint or from a utilization standpoint as one would have hoped I think you heard that today And this will just really promote access to these funds that were approved by the voters So I urge an aye vote
Thank you, Senator Vazelle. Senator Ball, the proper motion is to the Committee of the Whole as amended. Senator Ball.
Thank you, Mr. Chair. I move House Bill 1313 as amended to the Committee of the Whole with a favorable recommendation. That's a proper motion.
And committee, any other questions or comments before we vote?
Yes, Vice Chair Snyder. Thank you, Mr. Just a quick one. I'm very impressed. You know, sometimes we pass things, whether it's statutes legislatively or, you know, 123 in this case was voter approved. But then we become entrenched. And, you know, we spend too much time defending it and justifying it. And this is a really great example of recognizing that, yeah, I have yet to see the perfect bill. I've yet to see the perfect ballot measure. And I think if we took more of this approach, our operations in the state of Colorado would work better for everybody. So thank you for bringing this bill.
Well said. Thank you, Vice Chair Snyder. Seeing no other comments, Ms. Alanzaro, please call the vote. Senators Baisley?
A respectful no.
Ball?
Aye.
Lindstedt?
Aye.
Liston?
Pass.
Rich?
Aye.
Snyder?
Aye.
Liston?
Yes.
Mr. Chair? Aye. That passes on a vote of 6-1. Good luck on the floor. Committee of Great Work today. The Senate Local Government and Housing Committee is adjourned. Thank you.