Proposition 123 Local Government Commitment Workshop Information

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Upcoming Stakeholder Workshop 

The next workshop, scheduled on Friday, March 24th, from 2-4 p.m., will focus on the Proposition 123 funded programs that will be administered by the Division of Housing and its partners:

  • an affordable homeownership program
  • a program serving persons experiencing homelessness
  • a local planning capacity development program

Proposition 123 Local Government Commitment Workshop

View the recording of the Proposition 123 Local Government Commitment Workshop, held on March 15, 2023

Workshop Agenda

12:00 - 12:05 p.m. - meeting format

12:05 - 12:15 p.m. - high-level overview of Prop 123

12:15 - 12:45 p.m. - review of “affordable housing” definition and baseline calculations

12:45 - 1:15 p.m. - discuss baseline designation/petition and commitment process

1:15 - 1:25 p.m. - walkthrough of interactive website

1:25 - 1:40 p.m. - what does compliance look like, and fast-track process

1:40 - 1:55 p.m. - high-level overview of funding programs, including timing of funds

1:55 - 2:00 p.m. - next steps 

Understanding the Baseline Reference Data Table

The top question DOLA has received is how did you arrive at these numbers? Below is the methodology used for calculating the baseline reference data table. This information will be reviewed in more detail starting at 12:15 p.m at the workshop. 

  • This information was tabulated by the Division of Housing to assist local governments in understanding how an affordable housing baseline and annual goal can differ based on the income limit used to calculate that baseline. Local governments (municipality, or county for unincorporated areas) are responsible for setting their own baseline. This information is a starting point and may be used as reference materials to assist in the development of baselines and to inform the design of other resources as localities work towards determining their own baselines. To further assist with this decision-making, below is the methodology we deployed to make these calculations for consideration by local governments.
  • The data used to create the baseline references are sourced from the U.S. Census Bureau American Community Survey, and the U.S. Department of Housing and Urban Development Comprehensive Housing Affordability Strategy. These sources are used to determine the estimated number of rental units at a given gross rent range, ownership units at given value ranges, in addition to the portion of rental or ownership stock that may be available as suggested by recent movers over the past four years.
  • Estimates for municipalities are provided by the Census Bureau without the need for further analysis; municipalities are already included in Census Bureau datasets that contain places (though these do include Census Designated Places that are unincorporated). Conversely, we calculated estimates for unincorporated areas of counties by subtracting the estimates of municipalities from the county or counties that they lie within.
  • Data from the American Community Survey was collected from the period of 2017 to 2021 and may be considered as roughly from 2019 while data from the Comprehensive Housing Affordability Strategy was collected from 2015 through 2019 and may be considered as roughly from 2017. Income limits are provided by the U.S. Department of Housing and Urban Development in the form of Area Median Incomes for Federal Fiscal Year 2022, and from the American Community Survey 2021 for the state median household income.
  • The proposition allows for baselines to be calculated using the income limit of an adjacent jurisdiction. Adjacency is determined based on a county adjacency file from the National Bureau of Economic Research. This also includes neighboring state counties for our border jurisdictions. For these references, income limits are displayed for counties that may not necessarily border municipalities yet do border the county or counties that the municipality lies within. This is done to provide more options for municipalities compared to determining adjacency based on actual shared boundaries for municipalities which would be more restrictive. A good example is Littleton, which is able to draw from data for counties bordering Arapahoe, Douglas, or Jefferson counties. 
  • Furthermore, the home value, gross rent, and recent mover estimate data provided by HUD and the ACS is joined with income limit data to determine the portion of units that are affordable within each range for homes (for example, from $400,000 to $499,999) and rental units (for example, from $1,000 to $1,249) based on each income limit (for example, the area median income of the jurisdiction’s own county). The resulting dataset illustrates how the amount of housing that is considered as affordable within a jurisdiction differs based on the income limit that drives the affordability calculation.
  • Rental units are affordable if the gross rent of the unit is affordable at 60% of the selected income limit, while home ownership units are affordable if the value of the home is equal to or less than the income limit multiplied by 3.5 (to calculate the home value to income ratio). The home value to income ratio was derived from mortgages originated for home purchase in Colorado in 2019, made available through the Home Mortgage Disclosure Act Dataset published by the Consumer Finance Protection Bureau.
  • The estimated baseline amount is further adjusted to consider the amount of housing that is not just affordable, but also available, by prorating the estimated amount of affordable housing by the portion of recent movers within that type of stock (owned or rented) for each jurisdiction. This affordable housing stock not only accounts for subsidized and restricted housing stock (e.g. deed and covenant), but also naturally occurring affordable market rate units as intended by the proposition. The end result of these aggregations gives localities a potential baseline to consider and a starting point in which to build its annual commitment estimates outlined by Proposition 123.
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