Middle Income Housing in Colorado, with a Closer Look at Jefferson County
Housing is Expensive, Even for Middle-Income Households in Colorado
Housing affordability is undeniably a concern for all households. The percentage of cost-burdened rental households nationally and in Colorado has been increasing among middle-income households. This growing unaffordability has led to the development of middle-income housing programs, often called “missing middle” or “workforce” housing. These programs target households that earn too much to qualify for traditional affordable housing programs and still struggle to afford market-rate housing. Many of these households include teachers, nurses, first responders, and other essential workers who find it difficult to secure homes near their workplaces. This issue is central to the Jeffco Housing Blueprint, a regional plan for increasing affordable middle-income housing in Jefferson County (Jeffco) for those between 60 and 120 percent of Area Median Income (AMI).
Housing unaffordability for middle-income families has wide-ranging impacts. For example, when missing middle or workforce housing is unavailable, local businesses and public services face staffing challenges, families lose access to community networks, and housing inequities deepen. This explainer summarizes the landscape of middle-income housing programs in Colorado and provides best practices and considerations for Jeffco based on available research.
Current Landscape of State Middle-Income Housing Programs in Colorado
Several recent pieces of statewide legislation have created new opportunities for middle-income families.
- Proposition 123 (2022) establishes a dedicated funding stream for housing programs that supports households earning up to 60 percent of AMI for renters and 100 percent of AMI for homeowners.
- Middle-Income Housing Access Program (MIAP) (2017), created by the Colorado Housing and Finance Authority, offers financing to developers building rental housing for middle-income households. Since its expansion in 2022, the program has funded over $37 million in projects, supporting 1,200 rental units in communities like Denver, Breckenridge, Steamboat Springs, and Commerce City.
- Middle-Income Housing Authority (MIHA) (2022), created by state lawmakers and amended in 2023, is a public entity that funds and manages rental housing for middle-income households across the state. MIHA supports public-private partnerships and provides incentives like property tax exemptions and access to lower-cost financing.
- Middle-Income Housing Tax Credit (MIHTC) (2024), the first in the nation, is a five-year pilot program providing $40 million in state tax credits through 2029 to support middle-income rental development. The first application cycle began in 2025. Projects are capped at $1.65 million per year.
Together, these initiatives reflect a growing acknowledgment by state policymakers that middle-income workers require stable, affordable housing.
Local Government Initiatives to Support Middle-Income Housing in Colorado
Local governments have also responded to their communities’ rising housing needs across income levels. Communities like Breckenridge and Boulder are examples of local governments providing middle-income housing programs and policies.
In 2022, Breckenridge launched its updated Workforce Housing Five-Year Blueprint, which will dedicate $50 million to workforce housing initiatives, including constructing deed-restricted units and preserving existing housing stock over time. The revenue for this project comes from various sources, including short-term rental fees, sales taxes, and impact fees. Four of the 18 completed projects focus on middle-income renters, totaling 131 units. These four middle-income rental projects have varying restrictions; three are income-restricted to the middle-income limit, while the fourth imposes no income cap. All four projects in the county require any renters who work in their relative locations a minimum of 30 hours per week. Breckenridge aims to boost its middle-income housing stock by 974 units by 2027.
The city of Boulder aims to make 15 percent of all housing permanently affordable by 2035. The city’s Inclusionary Housing Program mandates that 25 percent of all new residential units be permanently affordable, with 80 percent reserved for a mix of low/moderate-income households (up to 80 percent of AMI) for rental units, the other 20 percent are restricted for families earning less than 50 percent AMI. Boulder’s inclusionary zoning also applies to permanently affordable units offered for sale, townhouses, and single-family homes, which are priced affordably for households earning 120 percent of the AMI. In 2023, the city also launched homeownership assistance programs: the Middle-Income Down Payment Assistance Program and the House to Homeownership (H2O) Program, serving households earning up to 120 percent of AMI. These programs are funded by several methods for affordable housing, such as the inclusionary housing program, commercial linkage fees, property taxes, cash-in-lieu, and other state, federal, and external funds.
Best Practices on Recent Research & Considerations for Jeffco
Recent research and state policy developments provide valuable guidance for Jeffco community members and interested parties pursuing middle-income housing solutions. In particular, the 2024 Harvard Joint Center for Housing Studies paper identified both the promise and pitfalls of middle-income housing programs. Their analysis shows that middle-income renters are more likely than lower-income renters to identify as non-Hispanic white, to be younger, to have a college education, and to be less likely to have a disability. The authors warn that these programs may perpetuate systemic racial and socioeconomic inequities. While these efforts can support workforce stability and economic mobility, they must be designed with equity in mind without diverting resources from those with the greatest need. These findings become significant when considering that Black households in Jeffco experience the highest cost burden rate at 45 percent, followed by Hispanic households at 39 percent.
As Jeffco develops its strategies to support middle-income housing, best practices from other localities suggest that the county may want to consider the following:
- Pursuing layered financing using state resources. Jeffco jurisdictions can leverage Proposition 123 programs alongside tools such as MIHA, MIAP, and the new MIHTC pilot. For example, Jeffco could explore partnership opportunities with MIHA while utilizing Proposition 123’s equity or debt programs to close financing gaps.
- Exploring local funding streams to supplement state funding and support. As seen in both Boulder and Breckenridge, local funding is important to support middle-income housing initiatives. Jeffco can explore creating similar funding mechanisms to complement the state’s funding resources.
- Design middle-income housing with equity at the forefront. Jeffco can prioritize race/ethnicity-conscious strategies to avoid reinforcing existing disparities. Existing funds for the most vulnerable populations can be preserved, while middle-income efforts can complement, not replace, lower-income programs.
By taking advantage of existing state programs and resources and by learning from other communities across the state, Jeffco can meet its middle-income housing goals and create sustainable communities that support all residents.
