The Colorado House signed off Tuesday on Senate Bill 26-001 in a 53-10 vote, clearing a path for counties to steer property-tax revenue into workforce housing and to loosen rules on the middle-income housing tax credit. The bipartisan measure, approved after a round of floor amendments, now heads back to the Senate so lawmakers there can decide whether to accept the House's version.
What the bill would do
According to the Colorado General Assembly, SB26-001 would authorize boards of county commissioners to appropriate ad valorem (property) tax revenue from their general funds for workforce housing and housing authorities. It would also allow local governments to sell, lease or acquire public property for affordable housing development and extend a sales-tax exemption for construction materials used on county workforce-housing projects.
The bill tweaks the middle-income housing tax credit as well. It would make the credit transferable to taxpayers who do not own an interest in a qualified project and would add recapture language if a project's qualifying basis shrinks. Legislative Council Staff's fiscal note says no state appropriation is required and sets the tax-credit changes to take effect January 1, 2027.
Supporters say it unlocks local tools
Supporters are pitching SB26-001 as one piece of a broader push to bring housing costs back down to earth by giving local governments more ways to get homes built. In a joint release, Senate Democrats and the governor's office said the bills would help rural and mountain counties and free up underused land.
Speaker Pro Tempore Andy Boesenecker summed up the political ambition, saying, "We’re taking a big swing at Colorado’s housing shortage to drive down the cost of housing." The workforce-housing bill is tied to companion measures aimed at transit-oriented development and nonprofit builders, forming a larger package that Democratic leaders have been touting as their latest housing play.
Opposition on the floor
Republican lawmakers on the House floor warned that the changes could push housing decisions toward counties that may not actually want to ramp up new programs. Rep. Ken DeGraaf, R-Colorado Springs, argued that "we don't need that much more housing" and pointed to high vacancies in some counties.
Rep. Chris Richardson, a sponsor of the bill, countered that the measure "provides a tool" rather than a mandate and stressed that it does not require new taxes or fees, according to The Center Square.
How this builds on existing credits
The middle-income housing credit that SB26-001 would expand was established under 2024 legislation and is allocated by the Colorado Housing and Finance Authority (CHFA). Per the Colorado Department of Revenue's December 2025 update, the original HB24-1316 program is a capped pilot administered by CHFA.
Widening transferability of the credit is intended to attract more private investment into qualifying projects, giving developers one more financing lever to pull. How much new housing actually results will depend heavily on how CHFA allocates credits and on whether counties choose to lean into the new authority the bill provides.
Next steps and local impact
With the House vote in the books, SB26-001 returns to the Senate for consideration of the House's amendments; the General Assembly's schedule lists a Senate consideration for Wednesday. According to the Colorado General Assembly, prime sponsors include Sen. Dylan Roberts and Sen. Jeff Bridges in the Senate and Reps. Andrew Boesenecker and Chris Richardson in the House.
If enacted, counties would gain new discretionary tools to fund or enable workforce housing, from dedicating property-tax revenue to using public land and sales-tax exemptions to back projects. Any noticeable uptick in workforce housing, though, will hinge on how individual counties choose to use that flexibility and on continued CHFA allocations under the middle-income credit program.
