What is Proposition 123?

In November 2022, Colorado voters approved Proposition 123, which dedicates a portion of state income tax revenue to support affordable housing across Colorado. The program is administered by:

• CHFA (Colorado Housing and Finance Authority) and OEDIT (Office of Economic Development & International Trade) through the Colorado Affordable Housing Financing Fund (CAHFF), and

• DOLA (Department of Local Affairs) through the Affordable Housing Support Fund.

How Can Communities Use It?

Prop 123 offers funding tools for cities, nonprofits, and housing authorities, including:

• Land Banking Grants/Loans – to purchase and hold land for affordable housing (Grand Junction used this tool to acquire the Salt Flats site with a $2.2M grant).

• Concessionary Debt & Equity – lower-cost financing options to make projects feasible.

• Homeownership Programs – down payment assistance and affordable mortgage products for local families.

• Expedited Review Requirement – participating jurisdictions must streamline approvals for affordable housing projects to save time and cost.

What Did Grand Junction Commit To?

By opting in, the City committed to:

• Growing affordable housing by 3% each year (per state guidelines).

• Adopting expedited review procedures for affordable housing projects.

• Using Prop 123 tools to help local developers and nonprofits reduce costs and unlock more housing opportunities.

Opportunities for Our Community

• Unlocks Outside Dollars: Rather than relying only on local taxes, Prop 123 allows Grand Junction to bring in statewide funding to lower costs for housing.

• Land Banking = Feasibility: High land and infrastructure costs often stop projects before they start. Land banking grants make it possible to secure sites like Salt Flats for housing.

• Supports Local Families: Homes built with Prop 123 are income-restricted, ensuring they remain affordable for teachers, nurses, firefighters, veterans, service workers, and seniors.

• Stability for Developers: Flexible financing tools and predictable state support make projects more likely to succeed.

• Community Investment: Projects like Salt Flats also bring upgraded infrastructure, sidewalks, bike lanes, and potential parks, which benefit the entire neighborhood.

Challenges & Considerations

• 3% Growth Target: Every participating community must increase affordable housing by 3% annually, which may be challenging in smaller cities or during slow building years.

• Competitive Funding: Prop 123 funds are in high demand across Colorado — not every project will be awarded dollars.

• Administrative Burden: The reporting and compliance requirements add work for local governments, especially without a dedicated housing funding source to support staff and due diligence (like environmental reports or geotechnical studies).

• Market Pressures: High construction costs, limited labor, and rising interest rates can still make projects difficult, even with Prop 123 support.

Why It Matters

Despite challenges, Prop 123 is a powerful opportunity. It gives Grand Junction the tools to reduce barriers, bring in new state funding, and partner with private developers and nonprofits to build housing that reflects the needs of our community.

By combining local leadership, state resources, and private investment, Prop 123 helps unlock housing that keeps our workforce, seniors, and families rooted in Grand Junction.

Want to Learn More?

• Colorado Affordable Housing Financing Fund (CHFA & OEDIT): https://coloradoaffordablehousingfinancingfund.com

• DOLA – Affordable Housing Programs: https://cdola.colorado.gov/prop-123

• CHFA – Colorado Housing and Finance Authority: https://www.chfainfo.com