What is Colorado Proposition 123: Funding for affordable housing
Proposition 123, which gathered enough signatures to be placed on the ballot, would create a dedicated funding stream for affordable housing programs statewide. The measure would allow the state to set aside 0.1% of annual income tax monies each year, estimated to be $145 million in state budget year 2022-23 and $290 million in state budget year 2023-24. The money would go toward a down payment assistance fund, homelessness prevention efforts like eviction defense, and grants and loans so land can be purchased and saved for affordable housing developments. It would also give tenants in affordable housing developments a share of the development’s profits.
The case for: Housing stability and affordability is a top issue in Colorado, and Prop 123 would dedicate money toward addressing it in perpetuity, without raising taxes. It would keep new affordable housing units within reach of lower-income Coloradans while giving tenants equity and aid in meeting their down payments.
The case against: In years where residents would receive TABOR refunds, Prop 123 may decrease them; a state analysis said refunds would be $86 lower per taxpayer in 2024. The measure relies on local governments to voluntarily participate, and the funding would be set aside every year, regardless of how much tax money the state brings in.
The ballot question: “Shall there be a change to the Colorado Revised Statutes concerning statewide funding for additional affordable housing, and, in connection therewith, dedicating state revenues collected from an existing tax of one-tenth of one percent on federal taxable income of every individual, estate, trust, and corporation, as defined in law, for affordable housing and exempting the dedicated revenues from the constitutional limitation on state fiscal year spending; allocating 60% of the dedicated revenues to affordable housing financing programs that will reduce rents, purchase land for affordable housing development, and build assets for renters; allocating 40% of the dedicated revenues to programs that support affordable home ownership, serve persons experiencing homelessness, and support local planning capacity; requiring local governments that seek additional affordable housing funding to expedite development approvals for affordable housing projects and commit to increasing the number of affordable housing units by 3% annually; and specifying that the dedicated revenues shall not supplant existing appropriations for affordable housing programs?”
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