Why Pueblo is opting in to a Colorado program to fund more affordable housing

Pueblo is joining other Colorado cities in committing to receive funding that voters approved under Proposition 123 last year.

Here’s why Pueblo is opting in to the program and how it could affect affordable housing development in Pueblo.

What is Proposition 123?

Colorado voters approved Proposition 123 in November 2022. The ballot question allocates a small proportion of existing state taxes to fund housing development in Colorado.

Proponents said that this measure could help Colorado communities build more affordable housing, which has been a key issue across the state, especially as the population has grown over the past decade.

The proposition’s opponents noted that the measure would reduce refunds to Coloradans under the Taxpayer Bill of Rights — by approximately $43 this year and $86 in 2024.

But to be eligible to receive the funding, local governments need to commit to raising the amount of affordable housing by 3% every year. Funding to new developments could be paused if the local governments fail to achieve the goal.

How did Puebloans vote on Prop 123?

Pueblo voters supported Proposition 123 in November, with 51.7% of Pueblo County voters approving the measure.

That’s slightly lower than the state average, which was 52.6%.

The majority of voters living in counties in the Denver-metro area, as well as in the central mountains, supported the measure, while voters on the Eastern Plains and in many western Colorado counties opposed it.

How Pueblo could benefit from Prop 123

Pueblo already has a decent amount of affordable housing, so the city will need to commit to adding even more.

Mayor Nick Gradisar told the Chieftain that it’s approximately 1,200 new affordable housing units over the next three years.

But that would be a significant increase compared to what was built last year, just in market-rate housing. Approximately 200 market-rate units were added to the Pueblo market last year, Bryan Gallagher, Pueblo’s director of housing and community services, said at an Aug. 14 city council work session.

Dozens of towns and counties around the state have committed to implementing Proposition 123, according to the Colorado Department of Local Affairs. In southern Colorado, that includes Colorado Springs, Monte Vista, Rocky Ford, as well as Saguache and Rio Grande counties.

Why Pueblo is opting in

Although the threshold for Pueblo is higher than other communities, Gradisar said that the city is opting in because the funding could help attract new development to Pueblo.

He said that the population of people experiencing homelessness in Pueblo could go down if there was more affordable housing in the market and there’s also “young families” that need to find housing.

“The costs of acquiring housing have gone up in Pueblo over the last few years proportionately to what they've done in Colorado. It's still cheaper in Pueblo than it is other parts of Colorado, but it's more expensive than it was in the past in Pueblo,” Gradisar said.

Falon Miller, a housing development specialist with DOLA, told city council at the work session earlier this month she’s been in touch with developers who are interested in building new affordable housing in Pueblo and the funding the city is opting in to could help fund that new construction.

Miller also said that developments that use the state money will need to adhere to a use covenant for the next three decades to ensure that the housing remains available to people who meet certain income requirements.

Anna Lynn Winfrey covers politics for the Pueblo Chieftain. She can be reached at awinfrey@gannett.com or on Twitter, @annalynnfrey. Please support local news at subscribe.chieftain.com.

This article originally appeared on The Pueblo Chieftain: Why Pueblo is opting in to a Colorado program funding affordable housing