OUR PLATFORM
Policy Responses to Colorado’s Housing Affordability Challenge
CHAP recognizes that providing affordable housing solutions requires several policy responses, from eliminating regulatory barriers that prohibit the development of affordable forms of housing—such as townhouses, condominiums, apartments, and others—to providing dedicated funding streams for the development of income-restricted affordable housing units.
Tackling all of the problems that contribute to Colorado’s high housing costs is a big task. Therefore, we have chosen one area of focus: removing zoning barriers to the development of affordable forms of housing.
Much of our state’s affordable housing challenge is driven by inadequate supply. Between 1996 and 2006, Colorado added around 48,000 housing units each year. This volume tracked with net migration and employment growth. Since 2007, new housing units have averaged 26,500 units per year—55% of the volume prior to 2007—even as employment and net migration continued to grow. That is at least 21,000 homes each year that didn’t get built. Based on the CHAP volunteer team’s 150 years of collective experience in land use, zoning, and housing, we believe that land use and zoning regulations are in part to blame for our supply shortage.
The CHAP proposals would:
- Make a big difference in the ability of the private market—the sector that supplies the vast majority of housing—to deliver affordable housing units.
- Apply in cities and towns in counties with more than 50,000 residents, and only to those cities and towns with more than 10,000 residents. These municipalities have more capacity to apply the platform. Smaller municipalities could voluntarily adopt the elements that are most appropriate for their size and needs.
We Believe That Larger Cities and Towns Should Be Required To Do Both Of These:
PROPOSAL 1:
Planning for Realistic Housing Needs
Require every covered city and town to adopt a housing plan, or a comprehensive plan housing element, using reputable data to determine affordable housing needs, develop action for how those needs will be addressed over a 20-year period, and to update that plan at least once every five years.
Colorado law currently does not require local governments to analyze housing affordability or affordable housing needs. Developing and understanding data on housing demand is critical to ensuring that our communities are meeting demand generated by economic development, and providing a supply of housing that is affordable to a variety of income levels.
This proposal would require local governments to analyze housing needs in their communities, which could be done as part of their already-required comprehensive planning efforts. Given the close relationship between land use planning and providing sufficient housing to meet needs, it is critical that local governments have good, consistent information to plan and zone for the most appropriate types of housing development.
PROPOSAL 2:
Transit-Oriented Development
Require every covered city and town to zone all property within 1/8 mile of each fixed rail transit or bus rapid transit station to allow a minimum residential development density of 40 dwelling units per acre, subject to requirements for the production of affordable housing units in new residential projects.
Transit-oriented development (TOD) is the development of a mix of land uses around public transportation systems. TOD reduces dependence on cars—which account for 90% of all transportation spending in the United States. The average American spends 13% of his or her income on transportation, meaning that TOD saves households money that would otherwise be spent on cars, and thus reduces the overall cost of living.
Under this proposal, every city or town would be required to zone all property within one-eighth of a mile of a fixed transit station to allow residential uses of at least 40 dwelling units per acre. That’s roughly equivalent to allowing three- or four-story apartment or condominium complexes in an area within a five-minute (or shorter) walk of a rail or bus rapid transit station. The proposal does not prohibit office, retail, or other uses near these transportation nodes, but would ensure that residential uses are allowed in these areas.
Moreover, the proposal requires local governments to place requirements on new transit-oriented developments to produce affordable housing units. Because the required density levels would increase the value of properties near transit stations, the requirement for affordable housing units would allow some of this value to be recaptured for public benefit. Under this proposal, local governments would have flexibility to set the percent of units required to be affordable, and the affordability limits for these units.
We Believe That Larger Cities and Towns Should Be Required To Do At Least Three Of These Things, and that The Choice of Which Three Things Should be Left up to the City or Town Council:
PROPOSAL 3:
Accessory Dwelling Units
Allow accessory dwelling units to be developed by-right in every agricultural, single-family, or two-family zoning district, or in any portion of a planned unit development that allows agricultural, single-family, or two-family uses, in the state, exempt from maximum density limitations.
Accessory dwelling units, also called “granny flats,” “carriage houses,” or “garage apartments”—and known as ADUs in shorthand—are housing units located on property that already contains a home. They can be incorporated into the same building as the house on the property, or may be located over a garage or in a separate cottage. ADUs can provide affordable housing while allowing the property owner to earn rental income, with little effect on traffic or neighborhood character.
Under this proposal, ADUs would be allowed wherever agricultural or single- or two-family residential units are allowed, and would not count against limits on the number of housing units per acre in those zoning districts.
This proposal also encourages programs that subsidize the cost of ADU development for low and moderate income households in exchange for income-restriction commitments.
PROPOSAL 4:
Reforming Single-Family Zoning
Allow four or more primary residential dwelling units per parcel in each residential zoning district that previously permitted only single-family dwelling structures.
Single-family zoning allows just one detached house per lot. Over 60% of Colorado’s housing consists of single-family detached units. This development is significantly mis-aligned with our decreasing household size and growth in small households, including those occupied by single senior residents.
Attached forms of housing, such as rowhouses, townhouses, or condominiums tend to be far less expensive than single-family houses. The median price of a single-family house in the Denver metro area was $600,000 in June 2021, meaning a family would need to earn more than $150,000 per year to afford a median-priced house. In contrast, the median price of a condominium was just $380,000. Renters and owners across the income spectrum are less likely to be housing cost burdened if they occupy attached forms of housing: In 2019, renters earning between $50,000 and $75,000 were more than twice as likely to be cost burdened if they lived in a single family detached home or a large apartment complex than if they were living in a three- or four-unit building. Owners earning $50,000 to $75,000 living in a single family detached home were twice as likely to be cost burdened as those living in a small condo complexes.
Attached housing—such as rowhouses, townhouses, and condominiums—provide a path to homeownership for younger households, are more affordable workforce, provide low-maintenance living to older households, and accommodate those seeking an environmentally conscious housing type.
Under this proposal, four or more dwelling units could be allowed where only one single-family home is currently allowed.
PROPOSAL 5:
Faster Approvals for Affordable Housing
Allow administrative, non-discretionary development approvals to all multi-family dwelling projects that provide at least 25% of units at sales prices or rents affordable to low-to-moderate income households.
A 2018 study found that regulatory costs—including the costs of delay associated with permitting processes—comprised nearly 20% of the cost of building a single-family home, and over 32% of the cost of building a multi-family housing project. These delay costs are particularly challenging for developers of affordable housing, which generally have tight project budgets.
Under this proposal, a project that provides at least 25% of its units at affordable prices would be allowed to proceed with only administrative approvals, reducing the overall permit processing time.
PROPOSAL 6:
Reduced Parking for Affordable Housing
Reduce minimum vehicle parking requirements by 50% for any income-restricted affordable housing units.
Providing vehicle parking is costly. Minimum parking requirements require a housing developer to acquire the necessary land to construct parking. On top of that, a 2018 study indicated that surface parking lots cost approximately $5,000 to $10,000 per space, and garage parking costs between $25,000 and $50,000 per space. These costs make supplying affordable housing difficult, if not impossible. At the same time, higher-income households generally have more vehicles than lower-income households, and owners are more likely to have vehicles than renters.
This proposal would require local governments to reduce minimum parking requirements by 50% for any units that are designated affordable units.
PROPOSAL 7:
Reduced Fees for Affordable Housing
Reduce utility connection fees and development impact fees by at least one-third for all residential developments that provide at least 25% of units at sales prices or rents affordable to low-to-moderate income households.
Utility connections and impact fees can cost a housing project hundreds of thousands—or even millions—of dollars. These fees are particularly challenging for projects that have affordable housing units, which generally have tight project budgets.
This proposal would require local governments to reduce utility connection fees and impact fees by at least one-third for projects that provide at least 25% of their units as affordable units. These fee reductions will incentivize projects to deliver more affordable housing units in response.
PROPOSAL 8:
Medium-Density Housing
Allow development of a minimum of 10 dwelling units per acre in at least 10% of the land area of the city or town without the need for conditional use approvals or rezoning.
Ten dwelling units per acre is roughly equivalent to a two-story attached townhouse or row house community. Townhouses and row houses—which fall within the category of “missing middle” housing—are important housing types in every community, as these types of homes are often “starter homes” for young families and “downsize” homes for older residents.
This proposal would require every city or town in larger counties to zone at least 10% of their land area for these types of housing, ensuring that more affordable forms of housing are available to accommodate Colorado’s growing workforce in urban, suburban, and rural settings. This proposal also ensures that every community contributes to providing housing for a diverse group of renters or buyers and contributes to housing their workforce.