Colorado’s 2025 Legislative Session: A Mixed Bag for Affordable Housing

The 2025 legislative session in Colorado resulted in a mixed bag for affordable housing, ending on a calmer note after years marked by the Covid-19 pandemic, substantial one-time infusions of federal funding, sustainable sources of funding coming online, and systemic changes to tenant-landlord law and land use. This year’s session focused on other priority issues, varying state responses to the Trump Administration, and a billion-dollar budget shortfall that dictated much of what got passed — and what didn’t.

Working alongside legislative champions, gubernatorial and departmental staff, and dedicated advocacy partners, Enterprise is proud to have played a role in shaping and passing many of the initiatives below.

Funding Focus: Affordable Homeownership and Middle-Income Housing

Despite the tight budget year, previous years’ gains in funding for affordable housing and housing stability went largely untouched. In new investments and funding mechanisms that did cross the finish line, lawmakers favored creating more opportunities for homeownership among low- to moderate-income households and for Coloradans living on higher incomes.

Three newly established financing mechanisms include:

Enabling the state to invest up to $50 million in bonds with below-market interest rates issued by the Colorado Housing Finance Authority (CHFA) (SB 006). CHFA will utilize proceeds to finance low-interest loans to develop affordable for-sale homes, and for low-interest mortgages. Homes must be affordable in the long term and benefit Colorado households living at or below 140% of the statewide median family income, which is $163,000 in 2024. Enterprise proudly supported this bill and encourages this innovative structure to be replicated for supportive housing and preservation of existing affordable homes.
Investments of at least 20% of the money held in the state’s Public School Fund — an estimated $1.6 billion—to benefit public school employees and the families they serve. Allowable investments include several for housing: bonds or mortgage-backed securities issued by CHFA, loans to and bonds issued by the Middle Income Housing Authority, loans to community development financial institutions or nonprofits developing affordable for-sale homes, and an educator first home ownership program (SB 167). Similar investments from the state’s Unclaimed Property Trust Fund, including a $100 million loan to the state Division of Housing, were eliminated over objections from the State Treasurer.
Establishment of the Building Urgent Infrastructure and Leveraging Dollars (BUILD) Authority, a new political subdivision under the State Treasurer. The Authority may issue tax-exempt bonds up to 30 years, make loans, sell and deposit securities to invest in eligible projects, including: renewable energy, energy efficiency, and affordable and accessible housing (SB 081). Created with input from organized labor, BUILD will also feature a financing program that prioritizes projects with matched financing from pension funds and other labor-friendly practices, as well as those that benefit underrepresented communities. However, BUILD cannot finance projects within CHFA’s statutory authority, effectively meaning the Authority and its programs cannot fund housing affordable to residents living below 140% AMI. It is also prohibited from engaging in projects using private activity bonds and from receiving those bonds itself.

Keep an Eye On: Affordable Housing Budget Bills

In the waning days of the session, members of the Joint Budget Committee and legislative leadership pushed through several last-minute bills to balance the state’s budget and bring the legislature’s affordable housing spending into compliance with state law.

Previously, interest earned on money held in a given state-administered cash fund remained in that fund. SB 317 transfers the interest out of various cash funds into the General Fund to help cover this year’s budget deficit, including $2.2 million in interest out of the Housing Development Grant Fund. Enterprise and several partners shared concern over this statutory change with legislators and hope to work with them on this issue next session.
Proposition 123, the 2022 ballot initiative approved by voters, created the State Affordable Housing Fund by dedicating 0.1% of the state’s annual income tax revenue to the fund, which must supplement and not supplant existing funds. SB 313 formalizes this intent by effectively setting a $174 million annual baseline for housing appropriations that future legislatures can’t go below. Enterprise and partners will engage lawmakers in further considering programs comprising the funding floor and exploring future adjustments.

Housing Supply: Modest Gains for New Development, None for Preservation

Consistent with this year’s funding priorities, proposals to administratively increase Colorado’s housing supply focused on supply over affordability, and new production over preserving existing affordability.

One of Governor Jared Polis’ main proposals was to create new housing by providing faith-based organizations, public school districts, and public colleges and universities with an accelerated process to develop on land they already own. Often referred to as "Yes in God’s Back Yard" or YIGBY, the bill (HB 1169) lacked the necessary votes to clear the Senate. Although some affordability provisions were included, Enterprise and several partners had hoped for more robust guarantees of affordability, given the significant benefit to ownership entities and developers, and in line with similar proposals from other states. We will continue to work with lawmakers and advocates on balancing increasing housing supply with meaningful affordability.

Other gubernatorial priority bills to increase housing supply — though not necessarily affordable — have been signed into law.

HB 1272: Addresses the long-debated issue of construction defects — developers’ liability for defects in condo construction — by enabling developers to opt into a program requiring third-party inspections and certain warranties in exchange for limitations on the types of claims homeowners and HOAs can file against construction professionals and stricter standards for filing those claims.
HB 1273: Seeks to facilitate in-fill development of smaller multi-family housing properties by requiring local governments to allow construction of buildings up to five stories high with only one stairway, with additional limits on the building’s size and specific requirements for fire safety.

Stability: Helping Housing Providers & Residents in Need of Housing

Rising property insurance costs, largely driven by extreme weather events, and weakening coverage pose significant challenges to affordable housing developers — particularly nonprofits and those focused on supportive housing. Colorado’s Division of Insurance led the effort on two bills with the potential to help stabilize insurance, both explicitly and indirectly, for multifamily properties. While one measure (HB 1302) died in committee, the other (HB 1182) is now law, requiring insurers using wildfire or catastrophic risk models to be more transparent about the details of those models and to consider risk-mitigation efforts by property owners and communities. Insurers must also make clear to the public the activities property owners, including multifamily owners, can take to mitigate these risks, in exchange for what specific discounts or rebates.

A bill (HB 1032) that would have supported better coordination across state and local efforts to address homelessness didn’t move forward because it wasn’t prioritized for a modest appropriation. Notably, this bill would have also enabled local governments to use revenue from documentary fees collected by county clerks on home sales and other real estate transactions for affordable housing and homelessness response.

For renters, legislators brought forward several new proposals to stabilize renters, especially those living on lower and fixed incomes or at heightened risk of displacement. Most have been signed into law, including:

HB 1090: Impacts retailers, service industries, and others. Specific to housing, requires a listed rental amount include the full cost of base rent plus any permissible mandatory monthly costs and services, e.g. trash collection, upkeep for spaces accessed by all residents. Bans landlords from charging junk fees, including extra charges for other fees, property taxes, or fixing health and safety issues.
HB 1240: Codifies an existing federal requirement for a 30-day notice prior to eviction for nonpayment of rent in federally backed properties. Expands the state definition of source of income discrimination to include a landlord’s refusal to provide information necessary for the successful completion of a rental assistance application and sets a minimum penalty of $5,000 for a landlord found guilty by a court of such discrimination.
SB 020: Enables local governments to petition a court for a multifamily residential property to be placed in a receivership, under the management of an experienced third party, if the property has fallen into disrepair and conditions substantially violate state warranty of habitability standards. Excluding instances when the landlord is working to fix the issue, but circumstances beyond their control are delaying repair.

Additional new laws provide specific considerations and safety-driven measures for victim-survivors of assault, harassment, or stalking who are facing eviction (HB 1168); streamline and increase access to Colorado’s necessary documents program for eligible people (income qualified, experiencing homelessness, displaced by natural disaster) to obtain free identification (SB 008); and update a pre-existing law to now practically enable people to pay for and utilize a single background screening report across multiple rental applications and properties (HB 1236).

Diverging from his fellow Democratic legislators and State Attorney General, Gov. Polis vetoed a bill to prohibit use of software and programs that enable multiple landlords to collectively, artificially inflate rents (HB 1004). The bill made clear that affordable housing providers’ adherence to rent limits required by federal, state, or local law would not be considered rent collusion, nor would publicly accessible resources using publicly available data to estimate home and rent values, such as Zillow.

For more on policies discussed here and others, several of Enterprise’s partners have detailed legislative reports, including: Colorado Coalition for the Homeless, Colorado Center on Law and Policy, Colorado Children’s Campaign, The Bell Policy Center, and Colorado Fiscal Institute.