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Colorado’s Affordable Housing Plan: Challenges and Opportunities

The COVID-19 pandemic has greatly impacted Colorado’s affordable housing market. With prices going up and wages going down, demand for inexpensive housing units has grown. At the same time, global supply chain disruptions and rising labor costs have hurt supply. These factors have fueled a raging crisis that is troubling many individuals. Now though, there are signs of relief on the horizon with state legislators working on a viable solution.

According to Colorado’s affordable housing market experts, rapid expansion has resulted in a severe scarcity of affordable housing units. At the same time, the COVID-19 epidemic has exacerbated these issues, worsening the situation. Both homeowners and renters face the same dilemma of growing costs. Authorities are still looking for feasible answers in the face of large jumps with one such plan already seeing the light of day.             

The Challenges at Present

The current situation in Colorado is one of the worst that the state has seen for many years. Rental prices saw a 13% rise throughout Denver alone. At the same time, house prices went up by 20% with the rates being even higher in the suburbs. As a result, the notion of owning a home of their own is rapidly becoming a distant reality for many. This is naturally a significant cause for concern for extremely low income individuals in the state.

There are numerous issues

Increasing prices are only a small part of the problem. There are a slew of other problems facing the state as well. These difficulties include skyrocketing land prices. Simultaneously, zoning approvals for apartments and affordable housing developments in locations like Greater Phoenix, as well as increased labor costs and supply chain disruptions, are all adding fuel to an already burning fire.

Alternatives in the Pipeline

The government is well aware of the difficulties and is working hard to resolve them before they become more serious. Officials from Colorado’s state government have prepared one of the largest affordable housing campaigns in the state ever. This is an attempt to provide incentives to various construction sector stakeholders so that supply pipelines can open up.

The administration is planning to spend $400 million to address financing gaps, allowing for the building of more affordable housing units. The funds will go towards building more than 15,000 affordable housing units across the state. Private firms and state developers are further adding to the affordability aspect for new homes in the state. However, the current rates are still not enough to meet Colorado’s housing demand.


Maxwell Drever of drever capital management notes that the current plan is still short of what is required. The state of Colorado needs 325,000 new homes if the balance of demand and supply is to be restored. At present, the state is struggling to build even 40,000 affordable housing units within the year, a troubling statistic especially for those who require this type of accommodation.

Delaware and its Affordable Housing Challenge for the Middle Class

Although Delaware is a small state with respect to its population and number of representatives, its affordable housing crisis is significant. Unlike other states where finding a budget-friendly space is a challenge for extremely low-income individuals, people in the area who fall within the middle class are also facing hurdles. With rising demand, stagnating wage rates and price hikes, options for residents are limited.

State administration in Delaware is working on fixing things in a variety of ways. Lawmakers are proposing as well as launching reforms that can incentivize builders and developers to invest in affordable housing projects. In Sussex for instance, the Sussex County Rental Program pushes rapid planning zoning review processes along with density benefits. These plans are meant to encourage more companies to invest in affordable accommodation.

Supply Outpacing Demand

Delaware is not just unique in the fact that its middle income residents are facing a housing crisis. Another distinct challenge is that supply of residential units is outpacing demand in the area. As per a housing report published in 2019, construction of homes in Delaware has exceeded the numbers required to match population growth. However, lower demand here is due to people not finding affordable and available housing units within the state.

As a result, the state faces a shortage of 18,000 affordable rental units alone. An average household income of $46,846 is required to afford a reasonably built 2-bedroom apartment for rent. The challenge here is that with 38% residents having difficulty making ends meet, this income bracket is quite high. Therefore, middle income individuals also fall under the strain of not being able to find inexpensive rentals that are affordable.

A Housing Trust Fund as a Possible Solution

Delaware has numerous potential solutions in the pipeline in order to encourage builders in diverting their resources towards affordable housing units. The Housing Trust Fund supported by the American Rescue Plan Act is one of the options that the state is enforcing. The program offers companies and nonprofits to apply for grants as high as $50,000 for each affordable home built. The limit for the fund is set at $500,000 per project.

The Housing Trust Fund is a part of the Sussex County Rental Program. It is an effort to expedite development of affordable housing units in Sussex. Maxwell Drever asserts that plans like these can help motivate builders towards laying the foundation for more affordable projects that can benefit various segments of the population. The impact of these incentives is yet to be seen though as in the past decade, only one project was built under the scheme.


The state administration in Delaware needs to work on formulating plans and guidelines that are effective. In contrast to current schemes that are under-utilized, specific, market-friendly schemes must be implemented.

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