Proposition 123 and Jefferson County
In 2022, Colorado voters passed Proposition 123, dedicating approximately $300 million annually from the state’s TABOR surplus to support several programs to address housing affordability, including land acquisition for affordable housing projects, homeownership incentives, rental assistance, and homelessness assistance programs across the state.
The measure received over 65 percent support from voters in Jefferson County, highlighting widespread acknowledgment of the community’s housing issues and a strong consensus that action is needed. Affordable housing under the measure is defined by two key factors: household income and housing costs. Housing is considered affordable if it costs no more than 30 percent of a household’s income; households are considered cost-burdened if housing costs exceed that. For renters, this applies to households earning up to 60 percent of the area median income (AMI), and for homeowners, it applies to households earning up to 100 percent of AMI. Some programs may also benefit households at higher income levels depending on specific eligibility requirements.
Housing is foundational to the well-being and stability of all families, impacting essential areas such as healthcare, education, and financial security. In Jefferson County, the lack of affordable housing has a ripple effect, disproportionately affecting vulnerable populations and creating barriers for middle-income households. In Jefferson County (Jeffco), according to American Community Survey (ACS) data, 50 percent of renters are cost-burdened, with 25 percent extremely cost-burdened, spending over 50 percent of their income on housing. For homeowners, 20 percent are cost-burdened, and 7 percent are extremely cost-burdened. These challenges are amplified for communities of color, which are more likely to face housing instability. Furthermore, evictions have nearly doubled in Jeffco, increasing from 2,443 in 2021 to 4,142 in 2023, while homelessness rose by 73 percent in 2023, particularly among children and youth. Affordable housing addresses these challenges by providing families with stability, reducing financial strain, and opening pathways to opportunities in health, education, and workforce participation, all of which require significant investment and innovative approaches like those offered through Proposition 123’s targeted funding solutions for communities like Jeffco.
Proposition 123 allocates funding into two main categories:
- Affordable Housing Support Fund (40 percent): Provides grants for homeownership programs, homelessness assistance, and local government planning capacity. These funds are managed by the Colorado Department of Local Affairs (DOLA)
- Affordable Housing Financing Fund (60 percent): Supports land acquisition, equity investments for affordable rental developments, and concessionary loans for housing projects. These funds are managed by the Colorado Office of Economic Development and International Trade (OEDIT) in partnership with the Colorado Housing Finance Authority (CHFA).
Local Government Qualification for Funds
For non-profits, for-profits, and governmental entities to qualify for funding, their local government must commit to increasing affordable housing units by 3 percent annually for two to three years. In Jefferson County, nine jurisdictions have opted in, collectively committing to a 9 percent increase in affordable housing by 2026, equivalent to 2,144 new units: (see chart to right).
Jeffco faces a deficit of 20,000 housing units, underscoring the need for additional investments and long-term planning. Expanding affordable housing will help families reduce financial burdens, improve access to essentials like healthcare and education, and support workforce retention while fostering equity and opportunity for all demographics and incomes, including youth, older adults, and communities of color.
First-Year Funding Allocation Overview
In its first year (FY23-24), Proposition 123 allocated approximately $153.3 million statewide across seven program areas. It will fund 175 projects that will benefit over 48,705 households. These projects include creating or preserving 3,294 affordable units and supporting homelessness assistance programs anticipated to help 48,204 households, as well as homeownership support programs anticipated to serve 501 households.
Jefferson County in FY23-24 secured $502,357 across local planning capacity, homelessness assistance, and land banking programs, supporting 1,984 households and creating 14 affordable homeownership units in Evergreen. Golden and Wheat Ridge both received awards to streamline permitting processes, implement land use code amendments and training for staff. However, no funding was secured for homeownership support, equity investments, or concessionary debt programs for FY23-24.
Expanding into these areas will be critical for Jeffco to meet its 3 percent annual commitment and address its significant housing deficit. Examples of these programs in action in other counties include Fall River Village through the Estes Park Housing Authority, providing mixed-income workforce rentals, and the RidgeGate Senior Housing Project in Lone Tree, which adds 101 affordable units for older adults.
FY23-24: Proposition 123 Funding Distribution & Estimated Impact by Program in Jefferson County
The Value of Proposition 123 for Jefferson County
Proposition 123 represents a transformative step toward addressing Colorado’s affordable housing crisis by providing significant financial resources often missing at a local level. For Jefferson County, these funds offer a critical foundation to develop affordable housing, expand resources for vulnerable populations, and enhance local government capacity to implement innovative housing goals on a county level.
The goals of Proposition 123 strongly overlap with the Jeffco Housing Blueprint, a regional plan designed to tackle the county’s housing challenges by focusing on middle-income households earning between 60 percent and 120 percent AMI. While Proposition 123 focuses on households earning up to 60 percent of AMI for renters and up to 100 percent of AMI for homeowners, it also allows housing units at higher AMIs to be counted as affordable housing in two instances: petitions from rural-resort jurisdictions and from OEDIT projects where AMI is averaging is allowed. Together, Proposition 123 and the Blueprint share a commitment to fostering regional collaboration, reducing barriers to housing by incorporating land use/zoning changes and policy innovation, and empowering local governments and communities to take decisive action.
Affordable housing not only addresses rent and homeownership but also strengthens neighborhoods by fostering social cohesion, lowering crime rates, and improving school quality. Proposition 123, combined with strategic planning through the Blueprint, ensures that Jefferson County can move toward a future where all residents can thrive. By leveraging these resources and staying committed to its long-term goals, Jeffco can set a powerful example of how state and local collaboration can drive lasting, equitable housing solutions.
