Lakewood Commits to More Housing Under Prop 123

Lakewood City Council voted to opt-in to Proposition 123 to provide increased affordable housing. Lakewood has not yet announced what kind of programs it will be pursuing or whether it will tailor projects to Lakewood’s need or whether it will integrate the funding into a larger housing strategy.

Lakewood’s Strategic Growth Initiative has shown that developers in Lakewood are not interested in building low-income, affordable, and/or subsidized units. That option has always been available to anyone who would guarantee 20% affordable housing. Zero units were generated. However, with new Proposition 123 funding, land purchases could be subsidized as well as the rent/ownership.

For the purpose of Proposition 123 funding “affordable” means 70% of median income.

Projects eligible for Proposition 123 funding would have to be predominantly affordable. Individuals are eligible for rent assistance who make 70% of median income. Individuals making 120% of median income are also eligible for down-payment assistance.

For Lakewood, that means that the 42% of people residing in Lakewood who currently rent would be eligible for some kind of assistance.  

Advocates for opting-into Proposition 123 funding point out that it is free money. It should be noted that in the rush for free money, Lakewood has not integrated this money into an overall housing philosophy. Lakewood has not decided if the goal is to provide partial or fully funded housing to a target population, what population should most benefit, or if there are any conditions attached that will help people resolve any difficult non-economic problems. Lakewood could choose to focus on providing rental and home ownership assistance or just developing new units.

Opting-into Proposition 123 did not come with any guardrails against the development concerns that prompted the Strategic Growth Initiative. For example, in Lakewood, residents were concerned about high-density units so the initiative-mandated council review of complexes with over 40 units. Although Lakewood could impose such oversight, Prop 123 funding will give high-density projects priority.

In other words, there has been no unique local terms to this spending. Without this evaluation of how local and state needs intersect, Lakewood will be driven by state priorities to secure funding.

For example, Lakewood could choose to target only development of units for the extremely low-income, rather than units for incomes up to 70% of median. The extremely low-income are “the only population experiencing an absolute shortage of affordable housing.’ This fact is supported by Lakewood’s own data which shows that homes are available in other income ranges. Such a target would assist Lakewood’s homeless population but that development normally triggers resident concerns who would rather have more upscale development. So far, Lakewood has not had that public conversation.

“Affordable” housing is defined by individual or household income… “the [extremely low-income are the] only population experiencing an absolute shortage of affordable housing.’ – NLIHC

Lakewood is now obligated to build 625 affordable units. If those units are part of a mixed development, the total overall growth could be 1225 units (625 = 51% of 1225). Therefore, the commitment to more affordable housing may also come with more market-rate housing as well.

From the election Blue Book

Arguments For Proposition 123

1) The measure creates a source of funds to tackle housing issues without raising tax rates, and gives local communities the flexibility to respond to their specific needs. The state and local governments are not doing enough to keep Colorado affordable.

2) Colorado’s housing prices make it too hard for many households to afford rent or to buy their own home. The new programs help Coloradans participate in the housing market now and in the future. Creating more homes will allow residents and essential workers to remain in their communities.

 Arguments Against Proposition 123

1) Many of these programs do not address the underlying causes of high housing costs. Pumping money into the market may distort it further, and the real beneficiaries will be landlords and housing developers. This is neither the role of government nor the best use of public resources. 

2) The measure is unnecessary and will reduce Coloradans’ future TABOR refunds. The state already provides resources to support affordable housing, including over $1 billion in federal stimulus funds allocated in recent years. This measure diverts money away from the state’s budgeting process— money that goes toward priorities as determined by the legislature through deliberation and consultation with stakeholders and constituents—and instead sets aside money in a fund with fixed uses.