Colorado lawmakers have taken a key first step toward reshaping how cities and counties qualify for statewide affordable housing dollars, advancing HB26-1313 out of the House Transportation, Housing and Local Government Committee on a 10-3 vote after several people testified at the Colorado State Capitol.
The Colorado Department of Local Affairs reported that Ashley Weesner, the Proposition 123 community support manager, testified on behalf of the Division of Housing and that HB26-1313 cleared the committee on a 10-3 vote, according to the department’s Facebook post. The post underscores the Division’s support as the bill moves to the House floor; see the department’s update on Facebook.
How HB26-1313 Would Rewrite the Rules
Right now, jurisdictions that want money from Colorado’s statewide affordable housing fund are tied to a flat 3% annual increase in affordable housing units. HB26-1313 would scrap that one-size-fits-all benchmark and replace it with a "target increase number" tailored to each jurisdiction’s recent building history and local job growth.
Under the proposal, a jurisdiction’s target would be calculated using its average annual housing permits over the past three years, multiplied by a factor that depends on the county's job growth. The bill sets three multipliers: 0.10, 0.15 and 0.20, depending on whether a county’s job growth is significantly lower than, close to, or significantly higher than the statewide median. It also offers extra credit for donated land, units developed for sale and deeply affordable rental units.
The measure further allows the Division of Housing to grant waivers and to let certain tax-exempt developments count as up to 1.15 units once they reach vertical construction, according to the Colorado General Assembly.
Why Cities and Counties Are Watching Closely
Proposition 123, which voters approved in 2022, created the statewide affordable housing fund and required local governments that want access to the money to commit to increasing affordable housing units by 3% each year. Some municipalities have struggled to hit that mark.
Backers of HB26-1313 argue that tying goals to actual permitting activity and local job growth would set more realistic expectations for slower-growing counties while still keeping pressure on faster-growing places to build. Skeptics counter that loosening the rigid 3% requirement could dilute the ambition that Proposition 123 originally promised. Background on Proposition 123 and the commitments it created is available from Colorado Public Radio.
What Happens Next at the Capitol
After the committee vote, HB26-1313 was referred to the Committee of the Whole and placed on the House second-reading calendar for Monday, March 30, according to the Colorado General Assembly.
If it advances on the House floor, the bill would overhaul how local governments calculate and claim affordable housing units when they apply for statewide grants, with the Division of Housing responsible for administering waivers and guidance under the new framework. Department staff and the bill’s sponsors say they plan to keep briefing legislators and local officials as the measure works its way through the Capitol process.
