With the finalization of the Colorado state budget for fiscal year 2026-27 approaching, one affordable housing proposition is set to lose $130 million in funding.
Passed by voters in 2022, Proposition 123 created Colorado’s State Affordable Housing Fund, which provides approximately $300 million toward affordable housing efforts across the state. Affordable housing advocates have spoken out against the $130 million cut that would be siphoned to Colorado’s General Fund.
“(Fort Collins has) certainly seen the benefit of Prop 123 here,” said Vanessa Fenley, a housing manager in the Housing and Community Vitality Department for the City of Fort Collins. “It’s hard to anticipate what some of these potential cuts could look like for Fort Collins just because it’s dollars that haven’t been awarded yet.”
Proposed cuts will impact the Office of Economic Development and International Trade, which manages 60% of Prop 123’s funding. Funding from OEDIT is allocated to three program areas: land banking, equity and concessionary debt.
To receive funding, jurisdictions like Fort Collins have to file, committing to an annual 3% increase in affordable housing each year for three years. In June 2023, Fort Collins filed a commitment to increase by 555 units, which Fenley said the city is “cautiously optimistic” about hitting by the end of the year.
Proposition 123 also requires a development assessment review that must be completed within 90 days of the application’s submission. Although the City of Fort Collins isn’t involved in making Prop 123 funding decisions, Fenley said many projects that receive funding, like Habitat for Humanity Fort Collins, partner with the city.
“Balancing the state budget requires difficult choices,” Executive Director and CEO of Fort Collins Habitat for Humanity Kristin Candella wrote in an email. “Voters also issued a clear directive through the approval of Prop 123 funds as a dedicated revenue source for affordable housing. (Voters) want to see diverse housing options for different ages and stages of life. … This impacts everyone. Home is the key to a thriving economy and community.”
With funds from Prop 123, Habitat for Humanity has doubled its housing production across the state, Candella said. But if Prop 123 resources aren’t replaced following the cuts, Fort Collins affordable housing projects will be slowed down or lost.
In the past, city partners have accessed Land Banking funding, which provides grants to nonprofits such as Habitat and allows local governments to acquire and preserve land for the development of affordable housing, according to OEDIT. The organization has also accessed construction funds from Colorado’s Department of Local Affairs, which makes up roughly 5% of the Fort Collins organization’s budget, Candella said.
While construction funds for Habitat aren’t at risk, its Land Banking funds are. The Land Banking funds stem from OEDIT and support projects Habitat is involved in, such as the Bloom neighborhood.
“Currently, with the proposed cuts to Land Banking funds, we are unsure how we will acquire the 32 additional lots available to us in the Bloom neighborhood,” Candella said.
Other city partners, such as Housing Catalyst, a public housing authority and the largest property manager in Northern Colorado, were among the first to receive Prop 123 funding. Awarded in January 2024, Housing Catalyst received $1.6 million for Village on Eastbrook, a project developing 73 new affordable homes in southeast Fort Collins beginning this summer.
Gaps in public funding extend beyond the proposed Prop 123 funding. The NoCo Foundation, a nonprofit that invests in community projects, launched its Regional Housing Initiative in 2025. The foundation is also in the process of creating a revolving loan fund called the NoCo Housing Fund, which supports affordable housing through down payment assistance and low-interest rate loans, said Brooke Cunningham, regional housing officer at the NoCo Foundation.
The organization’s housing fund helps fill gaps in public and private funding, Cunningham said.
“When that gap gets wider, we need more money from either the private sector or grant funding from philanthropic institutions,” Cunningham wrote in an email-based interview. “That money is already really hard to come by and puts folks who are working hard to get more affordable housing built in a very challenging spot.”
Last November, Fort Collins voters approved ballot Issue 2A, Community Capital Improvement Program Tax, which continued the city’s 0.25% sales and use tax for another 10 years, with funds being directed to capital improvement projects. Fenley said the ballot measure approved $10 million to support affordable housing efforts. The city also provides gap funding, fee credits and imposes regulations, such as the land code updates, which Fenley said incentivize affordable housing efforts.
Although Fort Collins faces affordable housing challenges, the issue isn’t unique to the area.
“Housing affordability is one of the top issues facing Coloradans,” Cunningham said. “It’s easy to say you support affordable housing and much harder to be willing to give up things in order to prioritize funding for affordable housing. This is no longer just a budget conversation but instead a conversation about what our values are as a state and community.”
Reach Chloe Rios at news@collegian.com or on social media @RMCollegian.
