This update includes additional details on the Affordable Housing Finance Fund (AHFF)
Proposition 123, passed by Colorado voters in November 2022, represents a landmark commitment to tackling the state’s affordable housing crisis. The measure dedicates a portion of state income tax revenue—up to $300 million annually—to support affordable housing efforts without raising taxes.
The funds from Prop 123 are being directed toward programs that:
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Help local governments and nonprofits build affordable housing
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Provide down payment assistance for first-time homebuyers
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Support land banking, modular housing, and middle-income rental development
A key feature of Prop 123 is its voluntary participation model: municipalities must opt in and commit to a 3% annual increase in affordable housing stock to access the funding. This encourages proactive growth strategies at the local level, while still giving communities flexibility in how they approach their housing needs.
Overall, Prop 123 is more than just funding—it’s a bold, structural shift toward sustainable, long-term housing solutions in Colorado. As cities and counties opt in and projects begin to roll out, Prop 123 will play a crucial role in shaping the housing landscape for years to come.
