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Proposition 123 results: Voters approve funding for affordable housing programs

Prop 123 will set aside some annual state income tax revenue for housing programs, exempt that money from the revenue limit and eligible uses for the funds.

DENVER — Colorado voters approved a sweeping ballot measure that would direct an estimated $300 million a year to affordable housing projects by rewriting Colorado's tax law.

Prop 123 sets aside a portion of annual state income tax revenue from the General Fund, up to 0.1% of annual taxable income, for affordable housing programs under the Office of Economic Development and the Colorado Department of Local Affairs

The proposition was approved, according to the Associated Press, which called the race Saturday afternoon.

It’s estimated that the fund would be $145 million in state budget year 2022-23, and $290 million in state budget year 2023-34 and beyond.

Prop 123 also requires any additional funding created would be added to existing state funds spent on affordable housing, and not replace existing funding.

If Prop 123 had been defeated, state revenue would continue to be spent on priorities as determined by the state legislature or retuned to taxpayers, which is current law.

The latest results are below:

Results are called by The Associated Press. Click here for more on how AP calls races. 

The fund would be exempt from Colorado’s revenue limit, reducing the amount of money collected above the limit that is then returned to taxpayers, as outlined in the Taxpayer Bill of Rights (TABOR). It would also establish eligible uses for the money, which includes the following:

  • Grants and loans to local governments and nonprofit organizations to acquire and preserve land for affordable housing development
  • Assistance to develop affordable, multi-family rental housing
  • Equity investments in affordable housing projects, including a program to share home equity with tenants
  • Homeownership programs and down payment assistance for first-time homebuyers
  • A program addressing homelessness through rental assistance and eviction defense
  • Grants to increase the capacity of local government planning departments

Allegra Shippy, 24, said pandemic-era housing prices and increased homelessness pushed her to support the measure. She said the reduced tax refunds were a “small price to pay," adding the measure could save money in the long term on emergency and healthcare services for the homeless population.

“It’s an issue individuals cannot solve,” said the software engineer, who voted late Tuesday in Arvada.

But investment banker Sameer Kandola, 30, said the measure “seems more like a Band-Aid” that would take too much out of tax refunds amid inflation and does not address the core problem of homelessness and bloated housing prices. Instead, he said, there should be a broader plan to support more housing construction from the market and offer expanded mental health and addiction treatment.

Many past measures that would have affected state refunds have failed. In 2019, a ballot measure that would have allowed the state to keep excess revenue to spend on education and public transportation was defeated by 53% of voters.

Despite that history, advocates of the housing measure were optimistic, believing that sky-high rents and home values brought on by the pandemic would encourage Coloradans of all political persuasions to vote for it.

Opponents, including the conservative advocacy group Advance Colorado Action, argued there is no guarantee that the state-directed funds would produce the number of housing units promised.

Find all of our election coverage at 9news.com/elections.

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