(Colorado Newsline) A Colorado congressman has introduced a package of bills intended to improve access to affordable housing, particularly in Colorado's rural mountain communities.
U.S. Rep. Joe Neguse, a Lafayette Democrat, introduced two bills in the House of Representatives that would change aspects of the federal Low-Income Housing Tax Credit as well as how local communities can calculate area median income.
"Congress must work to remove barriers and ensure our federal housing assistance programs are working as intended," Neguse said in a statement. "With these bills, Coloradans will have increased access to affordable homes, bettering the lives of families and workers."
Provisions of the Low-Income Housing Tax Credit create a loophole that allows recipient property owners to abandon the affordability requirement after 15 years.
One of Neguse's bills, the Save Affordable Housing Act, would change the Internal Revenue Code to repeal the "qualified contract" exemption, which allows owners of a Housing Credit property owner to request a qualified contract through their state's Housing Credit agency after year 14. This begins a process of seeking a buyer, but the formula used to determine a price "in nearly all cases significantly exceeds the market value of the property as affordable housing," according to the National Council of State Housing Agencies, making it hard to find a willing buyer.
"If the allocating agency fails to identify a qualified buyer within one year, the property is released from the affordability requirements of the Housing Credit program," an NCSHA report said. "At that point, the owner is free to either sell the property at market value without any deed restriction or continue to own and manage the property charging market rents after a three-year rent protection period for existing tenants."
If passed by Congress, Neguse's bill would ensure all Housing Credit properties remain affordable for at least 30 years by eliminating the qualified contract provisions. Neguse originally introduced the Housing Credit bill in 2020, when the House took it up and passed it as part of its infrastructure package that year. The Senate at the time was Republican-controlled and the package was not taken any further.
"Too many families and workers lack affordable housing, no matter if a Republican or Democrat represents them," Hannah Rehm, a spokesperson for Neguse, said in an email. "The Congressman would welcome Republican support on both bills and will continue to work across the aisle to find solutions for housing instability."
Sharp wealth disparities
The Housing Fairness for Mountain Communities Act would change how area median income is calculated. AMI is a tool used to determine affordability of housing based on the average amount of money residents who live in an area make, with restrictions added to certain affordable housing units to accommodate people who make less than the AMI.
Currently, AMI is calculated at the county level, but some regions have sharp wealth disparities that raise the AMI so that it doesn't accurately reflect local labor markets and cost of living, according to a news release from Neguse. His bill would allow counties to calculate AMI based on ZIP code or region, which could more accurately reflect the affordable housing needs of Colorado mountain communities. Elected officials across these communities have shared their support of the bill.
"This bill offers a practical and customized solution for mountain communities that will offer a better representation of our local income," Breckenridge Mayor Eric Mamula said in a statement. "And, more importantly, the analysis of the current methodology will provide data and information that is critical to understanding how we can work together on housing solutions."
Breckenridge Town Council often discusses ways to create affordable housing for a local workforce that serves a regular influx of visitors and tourists year-round.
The House referred the Save Affordable Housing Act to the House Committee on Ways and Means and the Housing Fairness for Mountain Communities Act to the House Committee on Financial Services.
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