Why It Matters
Colorado faces the potential loss of 24,000 affordable housing units over the next 15 years, according to state housing data. Governor Jared Polis and state housing officials have directed funding toward new construction rather than preserving existing affordable rentals, leaving nonprofit housing advocates struggling to maintain low-cost options for working-class families.
The policy choice comes as approximately one in four households in certain Denver neighborhoods live in poverty, and major development projects threaten to accelerate gentrification along corridors like East Colfax Avenue.
What Happened
A nonprofit organization, the East Colfax Community Collective, sought state funding in 2024 to acquire and rehabilitate a deteriorating apartment building at 1371 Xenia Street in Aurora. The 1961 building housed low-income tenants who faced winters without heat while rents continued to increase. The nonprofit aimed to purchase the property, make necessary repairs, and maintain affordable rents for working-class families.
The group applied for funding through Proposition 123, a voter-approved initiative designed to support affordable rental housing projects that the private sector will not develop without public assistance. State officials rejected the application, citing priorities that favor new construction over preservation of existing affordable units.
By the Numbers
Colorado could lose 24,000 affordable housing units over the next 15 years without intervention. Approximately 25 percent of households in certain East Denver neighborhoods live below the poverty line. The building in question was constructed in 1961 and went on the market in 2024. State housing funds have been allocated primarily to new development projects rather than preservation efforts.
Zoom Out
The tension between building new affordable housing and preserving existing stock has emerged in multiple states facing housing affordability crises. Cities including Portland, Seattle, and Minneapolis have implemented acquisition programs allowing nonprofits to purchase older rental properties before private developers can raise rents or convert them to market-rate housing.
Voter-approved housing initiatives in California, Washington, and Oregon have faced similar implementation questions about whether to prioritize new construction or preservation. Housing policy experts note that preserving existing affordable units typically costs less per unit than building new housing, though new construction increases the overall housing supply.
What’s Next
The East Colfax Community Collective will need to secure alternative funding sources if it intends to proceed with the acquisition. State housing officials have not announced changes to Proposition 123 funding priorities. Lawmakers could address the preservation-versus-construction balance in future legislative sessions, though no specific bills have been introduced to redirect existing housing funds toward acquisition and rehabilitation programs.