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Prop 123 Frequently Asked Questions

Baseline Amount of Affordable Housing

The State has developed the Baseline Assistance Tool as an option for localities to develop a baseline that complies with statutorily required definitions and data sources so that they do not have to find, process, and analyze data on their own. Before the Baseline Assistance Tool was developed, the State released its Local Government Affordable Housing Baseline Reference Data Table with its own tabulations of the potential baselines of local governments and tribes. Both of these resources are optional. Local governments and tribes may determine their baseline independently if they use the definitions and data sources required by statute. Learn more about setting a baseline.

No, all commitments to increase affordable housing and the baseline amount of affordable housing must be determined by referencing:

These are the only data sources that a baseline can reference for commitments filed in 2023, though successor surveys with updated data can be used in future years. Commitment filings containing a baseline that references a data source other than the two above will not be accepted.

The factors a locality should consider include the for-sale and rental unit availability, household size, inflation rate, median income, and mortgage interest rate. In selecting an income limit, local governments should select a limit that most appropriately reflects their economic condition and housing needs. Be sure to document these factors, their data sources, and explain how you used them in the narrative explanation section.

For example, useful publicly-available data that may be relevant to local communities can be found at some of the following locations (this list is not exhaustive and data from these sources can often be filtered for your specific jurisdiction or region):

If you need assistance with the baseline tool, please contact the Proposition 123 Team.
 

DOH must be able to recreate a jurisdiction’s baseline amount of affordable housing based upon the information provided in the submission. Jurisdictions should provide as much information as possible in its justification narrative, including:

  • All data sources used to calculate the baseline
  • The method used to calculate the baseline amount of affordable housing units
  • If the Baseline Assistance Tool was used, provide information on what values you used and their relevance to your jurisdiction

Jurisdictions may use an alternative income limit such as the area median income (AMI) of a Neighboring Jurisdiction or the State Household Median Income. If using an alternative income limit, jurisdictions must describe and provide supporting data for:

  • How the alternative income limit reflects local housing and workforce needs better than the Area Median Income
  • Why the Area Median Income is inconsistent with the housing and workforce needs of your jurisdiction

If your jurisdiction does not agree with the baseline amount from the State provided resources, they are highly encouraged to reach out to the Proposition 123 Team for further guidance. 
 

Compliance

If a local or tribal government does not meet its commitment to increase affordable housing and/or Fast Track requirements by the end of the 3-year funding cycle, they will be ineligible to receive Proposition 123 funding during the first year of the next 3-year cycle. There is no clawback of funding already received.

Newly constructed housing units are counted at the time that they are permitted.
Existing housing units are counted at the time that they are permitted and fully funded.

Further guidance on the counting of units will be available in the future. DOH will send out notification when updated guidance becomes available.

Affordable housing is defined in Proposition 123 as follows:

  • Rental housing at or below 60% Area Median Income (AMI), or
  • For-sale housing at or below 100% AMI, and
  • Which costs the household less than 30% of its monthly income.

Note: Proposition 123 allows housing units at higher AMIs to be counted as affordable housing in the following instances:

Statute outlines the following regarding the counting of units:

  • A new residential housing unit is to be counted at the time it is permitted rather than the time it is constructed.
  • An existing housing unit newly qualifying as affordable housing is to be counted at the time it is permitted and fully funded rather than at the time the conversion is completed.
  • Any new deed restricted affordable housing, newly constructed or converted to affordable, within a local government's or tribal government's territorial boundaries.
  • All units funded through OEDIT’s Affordable Housing Financing Fund (Land Banking, Equity, and Concessionary Debt).

Further guidance on the counting of units will be available in the future. DOH will send out notification when updated guidance becomes available.

Regional collaboration and partnership is encouraged. Local governments and tribal governments may enter into written agreements with other local governments and tribal governments that allow each jurisdiction to receive partial credit towards the local government's or tribal government's growth requirement. The sum of the total units credited to the local governments and tribal governments shall not exceed the total number of units produced through the collaboration.

Funding and Programs

Local governments, tribes, non-profit organizations, and private entities may be eligible to apply for Proposition 123 funds if their project is located in a jurisdiction with an approved commitment.

It is important to note that individuals do not apply directly for Proposition 123 funds. Instead, they apply for specific programs that are supported by these funds.

Programs from the Office of Homeless Initiatives are exempt from filing a commitment through Proposition 123. This means if your jurisdiction applies for funding for Homeless Initiatives, it is not required to have a commitment on file.

Local governments may apply for other funding opportunities that are not from Proposition 123 funding sources.

None, filing a commitment will not immediately make funding available to a local government or tribe. However, filing a commitment will make a local government or tribe, along with entities operating within their jurisdiction, eligible for funding originating from the State Affordable Housing Fund.

The list of funding opportunities can be found on the Proposition 123 Funding Opportunities page.

Filing a Commitment

A commitment outlines a jurisdiction’s intent to increase affordable housing stock above an established baseline, which equates to 3% annually until December 31, 2026. Filing a commitment makes a local or tribal government, along with entities operating within their jurisdiction, eligible to apply for funding through programs implemented by the Colorado Department of Local Affairs (DOLA) and the Office of Economic Development & International Trade (OEDIT), in partnership with the Colorado Housing and Finance Authority (CHFA). Additionally, committed local governments (tribal governments exempt) will be expected to implement an expedited review process for affordable housing development.

Learn more about filing a commitment.

No, a Resolution, Ordinance, or other Council approved items are not required by DOH in order for a local government or tribe to file a commitment.

Only authorized officials of county and municipal governments and tribes, or officially designated persons acting on their behalf, may submit a filing.

No, each municipality, county, and tribe must determine its own baseline amount of affordable housing and file its own commitment to annual increases in affordable housing. Counties cannot make a filing for municipalities within their jurisdiction.

View the list of Commitment Filings for 2023 and 2024.

Rural Resort Income Limit Petition Process

A Rural Resort Income Limit petition only applies to the following Proposition 123 funded programs administered by the Office of Economic Development and International Trade (OEDIT) in partnership with the Colorado Housing and Finance Authority (CHFA):

Statute requires DOH to establish the percentages of AMI based on the demonstrated average needs identified in an Housing Needs Assessment. DOH does this by calculating the weighted average AMI of demonstrated housing need.

An increase in income limits is only allowable if the average AMI of need is above the current income eligibility limit, which a rural resort community must demonstrate. Additional common issues DOH has seen from past petitions include:

  • The housing needs for commuters, future workers, and residents are not assessed by Area Median Income (AMI)
  • Distribution of current resident income is assumed to be the same as the distribution of need

The Housing Needs Assessment:

  • Must have been completed within the last three years.
  • Must be based upon State Demographer data or other reliable and verifiable data sources.
  • Must include an assessment of the demonstrated housing needs within the community by AMI bracket AND the overall average housing need AMI.

View the Proposition 123 Specific Housing Needs Assessment Checklist for more information.

Yes, a rural resort community may petition for multiple or all programs at once. A project must be planned for at least one of the programs.

Yes, a rural resort community will need to re-petition for each three year funding cycle.

No, because this process is closely tied to the committed baseline and unit increases, a county’s petition will only cover the unincorporated county, not the municipalities within it. Municipalities must file a petition separately to change their income limits.

Rural Resort Reclassification Petition Process

Visit the Colorado Community Classification page to determine a jurisdiction’s classification.

A "Rural Resort" community, as per the law, refers to counties designated by the Division of Housing under C.R.S. 29-4-1107 (1)(d), along with municipalities and housing authorities within these counties. A classification of a Rural Resort community makes a difference in four laws.

If the petition for re-designation as Rural Resort is approved, then a rural resort community may file a separate petition for approval to apply different percentages of area median income (AMI) towards applications submitted for Proposition 123 funding with OEDIT’s Affordable Housing Financing Fund (Land Banking, Equity, and Concessionary Debt).

Learn more about the reclassification petition process.

A municipality or a county may petition to be reclassified as Rural Resort.

Yes, if a county is classified or reclassified as Rural Resort then that includes the municipalities and housing authorities within these counties.

Program Contacts

Ashley Weesner, Proposition 123 Program Manager
ashley.weesner@state.co.us or 303-549-9382

Becky Brazell, Proposition 123 Program Specialist
becky.brazell@state.co.us or 720-557-1672

Dean Myron, Proposition 123 Program Specialist
dean.myron@state.co.us or 720-788-2190

Schedule a meeting with the Prop 123 Program Manager.

This form should be used to report problems or issues with this website. Questions pertaining to a program or service provided by DOLA should be addressed to contact information located on the specific program pages.

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