Denver county approved hundreds of millions of dollars in new taxes for hospitals, schools, and everything in between, but they voted down an affordable housing bill in the November election. Along the same lines, Steamboat also recently voted down an affordable housing proposal even after a donation of a huge chunk of land. Why is affordable housing getting voted down in Colorado? What does this mean for real estate?
What was in the affordable housing measure in Denver?
Ballot Issue 2R: — FAILED– SHALL DENVER SALES AND USE TAXES BE INCREASED $100 MILLION ANNUALLY, COMMENCING JANUARY 1, 2025, AND BY WHATEVER ADDITIONAL AMOUNTS ARE RAISED ANNUALLY THEREAFTER THROUGH DECEMBER 31, 2064, TO EXPAND AND PRESERVE AFFORDABLE HOUSING FOR LOW- AND MIDDLE-INCOME FAMILIES AND INDIVIDUALS, THROUGH A ONE-HALF OF ONE PERCENT (0.5%) SALES AND USE TAX INCREASE (5 CENTS ON A $10 PURCHASE)
Why was it a surprise that affordable housing bills failed?
Denver health had a very similar initiative on the ballot to fund healthcare that passed along with every other initiative so I would have expected this to pass along with every other spending measure but it bucked the trend.
Why is it monumental that the affordable housing bill failed
With everything else passing in Denver, it is a huge outlier for this not to pass. Here are my theories on why this measure failed.
- Increase in the cost of living from higher taxes: I think voters are pissed off with the huge jump in taxes and they are feeling pinched by the increased costs
- Yet another government give away: We saw everywhere else in the country one of the biggest themes is that the government giveaways have been too much for most voters from student loans to various other programs.
- Other items lead to homelessness: I think voters are smarter than the politicians and understand that housing is only one element of homelessness, just solving the housing piece does not mean that substance abuse stops and that all the sudden the homeless are now employed, it is merely moving the problem out of sight.
The largest affordable housing proposals also failed in Steamboat and Vail
The trend in Denver is happening in other cost burdened areas like the Colorado ski towns. We see this in Steamboat with a voter initiated defeat of an affordable housing development and the same happened in Vail via lawsuits to stop affordable housing in certain areas. These losses are telling as even in very blue areas, voters are exhausted from the continual asks for affordable housing.
Why does this shift in attitudes matter for real estate?
The trends of voters defeating affordable housing proposals throughout the state have far reaching consequences for real estate. There seems to be a backlash throughout Colorado against continual subsidization of housing. The legislature seems to be out of touch with how the voters are reacting in the most recent election so it will be interesting to see what happens in the upcoming legislative session.
Summary
There has been a profound shift in attitudes in Colorado towards affordable housing. Voters are figuring out that continued subsidization of housing has a major cost that ultimately leads to much higher costs in the form of taxes for everyone else. Voters have finally realized that there is no free lunch in economics. This change in attitudes will lead to a profound shift in affordable housing policies throughout Colorado.
Additional reading/resources:
https://coloradohardmoney.com/big-changes-in-colorado-ski-real-estate/
