Two of Colorado’s leading gubernatorial candidates clashed Thursday over the proper role of the state government in alleviating the ongoing affordable-housing crisis.
Meanwhile, several Republican hopefuls for the office said the solution must lie in cutting regulations and working with the private sector to address mushrooming costs for homes.
Four Democratic and three Republicans hoping to succeed term-limited Democratic Gov. John Hickenlooper spoke at a forum held by the Colorado Association of Realtors.
The discussions came as housing needs continue to out-pace new housing supplies, leaving home prices soaring and an estimated 25 percent of Coloradans spending 50 percent or more of their income on housing.
Democrats have differed with Republicans in pushing the state to have a more active role in trying to solve this crisis, and that trend continued Thursday. But gubernatorial hopefuls Cary Kennedy and Michael Johnston had their own disagreement on how to attack the issue.
Kennedy, a former Colorado treasurer and Denver chief financial officer, said she would like to use surplus money from the Colorado Unclaimed Property Fund within the treasurer’s office to seed a $50 million to $70 million affordable-housing fund. That money in turn would be used to fill the gap that exists now between grants available to help developers put up affordable housing and the full amount they need to profit.
“Housing has become too expensive,” Kennedy said. “Colorado’s long history of being an affordable-housing market, I think, is behind us.”
While Johnston, a former state senator, agreed that Colorado’s current plan for keeping housing affordable is not working, he also said that the idea of providing gap funding for developers would not be enough to deal with the crisis.
There is not enough money in the state budget to offer developers to make it profitable for them to construct a significant amount of housing for people between 60 percent and 80 percent of the average median income, he said.
Instead, Johnston said he’d like to take publicly owned land within cities — unused land on the campuses of state buildings or schools, for example, deed it to a private developer at 10 percent of market value and allow developers to put up housing that would be deed-restricted to a certain band of affordability for 50 years. That could add attainable housing on public land in centers of employment, he said.
“The benefit of that is you have the capacity to take the 4 percent state (affordable housing tax) credits that aren’t enough right now to close the deal and make them enough,” he said.
Republican candidates Doug Robinson, Victor Mitchell and Walker Stapleton all criticized the call for more state funding to help pay the costs of affordable housing, however, saying that the ultimate solutions must come from the private sector or from a partnership between builders and the state government. Stapleton did not attend the event but submitted written answers to CAR questions.
Each of those candidates suggested that the state’s best role would involve encouraging schools to increase classes in trade skills to alleviate a shortage of construction workers that contributes to the lack of housing going up, particularly along the Front Range. Those three hopefuls and Republican Attorney General Cynthia Coffman also suggested that the state should work to cut restrictive regulations and permitting on home builders to lower their costs and to lower costs of homes in turn.
Mitchell went so far as to say that he would allow builders to receive building permits from licensed architects rather than have to seek them from county permitting offices.
“The greatest thing we can do in Colorado to improve affordable housing is to improve earning power,” added Mitchell, a businessman and former state representative. “We’re not creating a regulatory environment that’s conducive to small-business growth.”
Lt. Gov. Donna Lynne, a Democratic candidate, agreed with Republicans for the need to increase vocational training to prepare students for the construction trades but said the next governor will have few opportunities to cut regulations, since most of those rules are written and enforced by local governments rather than the state government. She proposed adding a Cabinet-level official to oversee housing efforts in the state.
There was some disagreement on how effective construction-defect laws passed last year in the Legislature have been. Democratic businessman Noel Ginsburg and Robinson both said that it appears to be working as expected and should just be monitored. Mitchell, however, said that more needs to be done in repealing laws that make filing lawsuits against condo builders so easy.
U.S. Rep. Jared Polis of Boulder, a Democrat, did not attend the event. He said afterward in a statement to the Denver Business Journal that he would like to work with counties, municipalities and the Colorado Land Board to identify opportunities, such as vacant lots or rundown properties, to incentivize leasing for affordable-housing development.
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