Democratic Senator Michael Bennet signed this week to co-sponsor legislation that would make it easier to build and renovate housing in economically distressed neighborhoods across the country.
“The lack of affordable housing affects every part of our state, from Denver to our mountain towns,” Bennet said in a statement. “Our legislation would invest in our communities to help address this crisis and boost the supply of affordable housing, reinvigorate Colorado neighborhoods and ensure families can stay in their homes.”
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The Neighborhood Home Investment Act, introduced by Democratic Maryland Senator Ben Cardin, would create a federal tax credit to cover the difference between construction or renovation costs and the actual selling price of a home. a house. It would target neighborhoods with poverty rates that are 130% higher than the local rate, where residents have incomes 80% or less than the area’s median income, and where home values are below the median.
It’s an effort to address a national affordable housing crisis, one Colorado has felt keenly in recent years with a population boom and rising cost of living.
Credits would only be issued to developers, lenders or local governments after the rehabilitation or construction is complete and the home is occupied by an eligible person.
“It is imperative that we deploy a wide range of resources to make affordable homeownership accessible to essential workers in our communities,” Heather Lafferty, CEO of Habitat for Humanity of Metro Denver, said in a statement. “Habitat for Humanity applauds Senator Bennet for supporting the bipartisan Neighborhood Homes Investment Act, an important tool that will enable community revitalization and help more families access homeownership.
It is imperative that we deploy a wide range of resources to make affordable homeownership accessible to essential workers in our communities.
– Heather Lafferty, CEO of Habitat for Humanity of Metro Denver
A Housing study 2021 conducted by the San Luis Valley Housing Coalition found that a 1,500 square foot home costs $285,000 to build, according to a local builder. This does not take into account land, tap fees, design costs and infrastructure. Median home prices vary across the Valley, but Costilla County recorded a median price of $212,000 in 2020. That potentially represents a minimum loss of $68,000 for builders.
Often, construction in these types of areas is not financially viable.
“The cost of construction exceeds what buyers and renters can afford, as well as median house prices and rents for existing units. Residential development is time-consuming, risky and currently presents limited or no profit opportunities,” the report states.
This report “showed that two commonalities in this area are the lack of new construction at affordable sale prices for low-to-moderate income households and the need to rehabilitate abandoned or uninhabitable houses that are inhabited by households in generational poverty,” said the director of the SLVHC. director Dawn Melgares said in a statement.
She said the legislation could help fill the gap of 1,800 homes needed over the next five years.
Nationwide, Bennet’s office said the bill could help revitalize 500,000 homes and create $100 billion in development revenue over the next 10 years.
A colorado communities map that would qualify for credits under the bill includes much of the San Luis Valley, parts of the Eastern Plains, the northwest corner of the state, and various neighborhoods in the Denver metro area .
The bill is currently stalled in the Senate but has 20 bipartisan co-sponsors.