Sustainable Affordable Housing Assistance

The act requires the executive director of the department of local affairs (director), no later than December 31, 2024, to develop reasonable methodologies for conducting statewide, regional, and local housing needs assessments and reasonable guidance for a local government to identify areas at elevated risk of displacement.

The act requires the director, no later than November 30, 2027, and every 6 years thereafter, to conduct a statewide housing needs assessment that analyzes existing and future statewide housing needs and to publish a report, based on the statewide housing needs assessment and regional and local housing needs assessments accepted by the department, identifying current housing stock and estimating statewide housing needs.

The act requires each local government, beginning December 31, 2026, to conduct and publish a local housing needs assessment. The act outlines the process for a local government conducting a local housing needs assessment and for determining when a local government is exempt from conducting a local housing needs assessment. The act requires local governments to submit local housing needs assessments to the department of local affairs (department), which shall publish those assessments on the department's website.

Relatedly, the act allows a regional entity to conduct a regional housing needs assessment. If a regional entity conducts a regional housing needs assessment, the act requires the regional entity to submit the assessment both to each local government in the region and to the department, which shall publish those assessments on the department's website.

A housing action plan is an advisory document that demonstrates a local government's commitment to address housing needs and that guides a local government in developing legislative actions, promoting regional coordination, and informing the public of the local government's efforts to address housing needs in the local government's jurisdiction. The act requires a local government with a population of either 5,000 or more or 1,000 or more if the local government either participated in a regional housing needs assessment or is a rural resort community to make a housing action plan no later than January 1, 2028, and every 6 years thereafter. The act identifies the specific elements that a housing action plan must include, explains how a local government may update a housing action plan, requires a local government to report its progress in implementing the plan to the department, and requires a local government to submit a housing action plan to the department, which shall publish each accepted housing action plan on the department's website.

The act requires the director to develop, by no later than June 30, 2025:

• A standard affordability strategies directory;
• A long-term affordability strategies directory; and
• A displacement risk mitigation strategies directory.

The act establishes the minimum required elements for all three directory types. The act also requires the director to submit a statewide strategic growth report to the general assembly no later than October 31, 2025, and develop and publish, in consultation with relevant state agencies, a natural land and agricultural interjurisdictional opportunities report no later than December 31, 2025.

The act requires the division of local government (division) to provide technical assistance and guidance through a grant program, the provision of consultant services, or both to aid local governments in:

• Establishing regional entities;
• Creating local and regional housing needs assessments;
• Conducting a displacement risk analysis with a state-created tool;
• Identifying and implementing strategies included in the standard affordability strategies directory, long-term affordability strategies directory, or displacement risk mitigation strategies directory;
• Making and adopting a housing action plan;
• Enacting laws and policies that encourage the development of a range of housing types, including regulated affordable housing, or mitigate the impact of displacement; and
• Creating strategic growth elements in master plans.

The act creates the continuously appropriated housing needs planning technical assistance fund to contain the money necessary for the division to provide this technical assistance and guidance. The act requires the state treasurer to transfer $10.5 million from the local government severance tax fund and $4.5 million from the local government mineral impact fund to this fund.

Further, the act directs the division to serve as a clearing house for the benefit of local governments and regional entities in accomplishing the goals of the act. The division shall report on the assistance requested and provided under the act.

On and after December 1, 2027, for any grant program conducted by the department, the Colorado energy office, the office of economic development, the department of transportation, the department of natural resources, the department of public health and environment, or the department of personnel and administration that awards grants to local governments for the primary purpose of supporting land use planning or housing, the act requires the awarding entity to prioritize awarding grants to a local government that:

• Has completed and filed a housing needs assessment;
• Has adopted a housing action plan that has been accepted by the department;
• Has reported progress to the department regarding the adoption of any strategies or changes to local laws identified in the housing action plan; and
• Is the subject of a master plan that includes a water supply element and a strategic growth element.

In the case of a local government that is not required to do any of the above, the department is required to prioritize that local government in the same way that it prioritizes a local government that has done all of the above.

On or before June 30, 2025, the act requires the department to designate criteria for the designation of a neighborhood center by a local government. If a local government designates a neighborhood center, the local government must submit a report to the department describing the neighborhood center. Furthermore, on or after December 31, 2026, the act requires certain grant programs to prioritize projects supporting or concerning neighborhood centers.

The act modifies the requirements of both county and municipal master plans so that those master plans must include:

• A narrative description of the procedure used for the development and adoption of the master plan;
• No later than December 31, 2026, a water supply element; and
• No later than December 31, 2026, a strategic growth element.

The water supply element in a county or municipal master plan must identify the general location and extent of an adequate and suitable supply of water, identify supplies and facilities sufficient to meet the needs of local infrastructure, and include water conservation policies.

The strategic growth element in a master plan must include:

• A description of existing and potential policies and tools to promote strategic growth and prevent sprawl;
• An analysis of vacant and underutilized sites and the use of those sites for the development of housing; and
• An analysis of underdeveloped sites that are not adjacent to developed land for the use of those sites for residential use.

The act requires both counties and municipalities to submit their master plan and any separately approved water or strategic growth element to the division for the division's review.

The act prohibits a unit owners' association of a common interest community from, through any declaration or bylaw, rules, or regulation adopted or amended by an association on or after July 1, 2024, prohibiting or restricting the construction of accessory dwelling units or middle housing if the zoning laws of the association's local jurisdiction would otherwise allow such construction.

For the 2024-25 state fiscal year, $583,864 is appropriated, from reappropriated funds received from the department of local affairs from the housing needs planning technical assistance fund, to the office of the governor for use by the office of information technology to provide information technology services for the department of local affairs for the implementation of the act.

APPROVED by Governor May 30, 2024

EFFECTIVE May 30, 2024
(Note: This summary applies to this bill as enacted.)