Gov. Jared Polis signs law helping local governments preserve affordable housing

Colorado’s local governments will soon have the right to be first in line to purchase subsidized housing units and keep them affordable before a building or complex is sold to a private buyer.

The first-of-its-kind housing bill was signed into law Thursday by Gov. Jared Polis.

“The cheapest affordable housing is housing that already exists,” Sen. Faith Winter, a Broomfield Democrat who co-sponsored the bill, said during a signing ceremony.

Passed as House Bill 1175, the law will allow local governments to step in and preserve subsidized housing projects. It covers developments that were built using tax credits or other incentives in exchange for leasing units at reduced rents to lower-income residents.

Under the new law, local officials can match accepted offers made by a third-party buyer to the building’s owner. The law also gives city and town leaders a weaker right-of-first-offer privilege on market-rate apartments that are headed for the auction block, but those offers don’t have to be accepted.

The main goal, supporters have said, is to ensure that the millions of dollars of tax credits invested in subsidized housing properties don’t go to waste — and that their tenants aren’t displaced because of increased rents — once their affordability requirements expire.

Colorado has roughly 111,000 subsidized housing units with affordability protections, but 15,000 of them will lose those requirements in the coming decade. Advocates fear the expirations will result in more private sales, higher rents for tenants and another closed door for lower-income residents.

“This bill is about preserving affordable housing, and we know that we have an incredible opportunity before us,” said Rep. Andy Boesenecker, a Fort Collins Democrat. “When it matters, it matters. And we know for the folks who live in those units, who rely on that affordability, (that) it can be a matter of being able to keep their kids in their school, being able to keep your job, being able to be near your family.”

The bill is among the first of its kind in the United States, advocates said. Some cities and counties — including Denver — have passed a similar right of first refusal.

Still, it’s not permanent: The bill’s provisions, which mainly take effect in August, will expire by the end of this decade.

A stronger version of the new law, a bill that would’ve extended the right of first refusal to a larger slice of market-rate apartments when they come up for sale, was vetoed controversially by Polis last year, sparking sharp criticism from Democratic sponsors.

Those sponsors — Boesenecker and Winter, plus fellow Democrats Rep. Emily Sirota and Sen. Sonya Jaquez Lewis — returned this year with a more limited proposal focused on existing affordable housing. Still, amid opposition from for-profit developers and property owners, it took nearly the entire session for the bill to clear the Capitol; it passed on May 8, the final day of legislative proceedings.

“Sometimes it takes two years to get across the finish line,” Polis quipped before he signed the bill into law during a ceremony in Broomfield.

The governor would know: His own preferred solution to the housing affordability crisis — a suite of land-use reforms intended to improve the state’s housing supply in exchange for leapfrogging local zoning rules — collapsed last year, only to pass this time around.