The Joint Budget Committee and the Department of Local Affairs (DOLA) used a joint hearing to present and discuss the governor's budget requests for DOLA, the department's use of federal stimulus dollars and implementation plans for Proposition 123 and several 2024 housing laws.

Representative Sirota, speaking for the Joint Budget Committee, summarized five budget requests from the governor for the Department of Local Affairs and asked members to weigh in as the JBC prepares a balanced budget in March. "These are the proposals that we have gotten from the administration," Representative Sirota said, presenting the JBC briefing booklet and calling attention to detailed issue briefs.

The requests the JBC flagged included: (1) a request to add $2,000,000 in general fund support for first-year operating costs at the Ridgeview campus, a former youth facility being renovated for transitional housing and withdrawal-management services; (2) $150,000 from the Board of Assessment Appeals cash fund to convert outsourced legal-assistant work to a permanent position; (3) just under $300,000 in general fund for improvements to the Colorado Homelessness Management Information System (HMIS); (4) a one-time reduction of about $400,000 in general fund for the Defense Counsel on First Appearance program as a budget-balancing measure; and (5) a proposed transfer of $100,000,000 from the local government severance tax fund to the general fund. The JBC materials and analysts’ briefs were referenced during the hearing for more detail.

Why it matters: DOLA is the state’s primary housing agency and the largest single state recipient of stimulus and recovery funds, and committee members pressed on how proposed changes would affect ongoing homelessness and housing programs. Maria De Cambra, executive director of the Department of Local Affairs, told the committee DOLA has managed more than $1,500,000,000 in stimulus spending since 2021 and said 94% of those funds were expended, encumbered or awarded as of the November snapshot cited in the presentation.

DOLA’s priorities and program performance

Director Maria De Cambra said the department is working to accelerate contract execution and get funding to projects faster. "We have reduced contracting times by over 39% from 240 days to 146 days," De Cambra said, and described three ‘‘wildly important goals’’ that include shortening contract timelines, creating housing opportunities and getting eligible seniors enrolled in a property tax benefit pilot.

DOLA reported program-level outcomes the department said are tied to federal and state stimulus spending and other appropriations: since fiscal 2022 the Division of Housing has awarded more than $800,000,000 for preservation and production of affordable housing, serving roughly 25,000 households; the Division of Local Government has distributed about $1,000,000,000 to nearly 2,000 projects; and DOLA said stimulus-supported investments have helped create more than 7,000 housing units and supported more than 11,000 Coloradans who were experiencing or at risk of homelessness.

Ridgeview (supportive residential community)

Ridgeview (also referenced in briefing materials as Ridgeview campus) was a focal point of the budget requests. Representative Sirota and DOLA staff described the Ridgeview repurposing as converting a former youth facility into a supportive residential community. The JBC’s R1 request seeks $2,000,000 general fund for first-year operating costs at the campus; DOLA said other funds have been used for construction and renovation.

Kristen Toombs, deputy director in DOLA’s Division of Housing, said Senate Bill 22-211 provided $45,000,000 in appropriations for the project and that federal funds have been used so far for renovation work. Toombs said DOLA estimates ongoing annual operating costs at about $11,600,000 beginning in fiscal 2027, with the first-year request covering a portion of ramp-up costs. Toombs also described planned capacity: 198 transitional housing beds and 27 withdrawal-management beds.

De Cambra framed Ridgeview as a cost-saving intervention compared with unmanaged homelessness and repeated emergency use of health and justice systems. "Transitional housing costs $20,000 per person annually,'" De Cambra said, adding that withdrawal management treatment costs about $7,500 per person and that DOLA’s cost estimates draw on a 2018 Office of the State Auditor benefit-cost report.

Proposition 123 and OEDIT/CHFA implementation

DOLA and the Office of Economic Development and International Trade (OEDIT) described implementation of Proposition 123, the voter-approved state affordable housing fund, whose proceeds the agencies said are split 40/60 between DOLA and OEDIT. Hillary Cooper, director of innovative funding for housing programs at OEDIT, and Christy Budich, program lead at the Colorado Housing and Finance Authority (CHFA), said the first year of funding was a half-year and that the programs funded a subset of requests: roughly $97,000,000 was awarded from approximately $735,000,000 in requests in the initial allocation.

OEDIT and CHFA explained the structure of Prop 123 awards (land banking, concessionary debt, equity programs and others), noted a push to support modular (factory-produced) housing and described a tenant-equity vehicle under development. Cooper said the state made a large one-time investment to grow in-state modular production and that awarded factory loans and related investments are expected to increase factory capacity.

Mobile home park oversight and other program updates

DOLA described its mobile home park oversight program (created by 2019 legislation), which the department said oversees more than 750 parks. De Cambra’s presentation said the program resolved about 200 complaints recently and closed a backlog of open cases from the program’s first four fiscal years; DOLA reported 74% satisfaction among surveyed participants and said 49% of parks had failed to post required notices, resulting in about 260 enforcement cases.

Budget pressures and possible reductions

Committee members pressed DOLA on potential cuts as the legislature confronts a structural budget gap. Jeff Alexander, DOLA’s chief financial officer, told the committee that a 10% general fund reduction would equal roughly $7,000,000 across DOLA’s general fund portfolio and roughly $10,000,000 in total fiscal-year-2026 impact when broader statewide requests are included. "At DOLA, a 10% general fund cut is $7,000,000 across all of our budget requests," Alexander said.

Committee members also questioned whether one-time or continuously appropriated funds could be redeployed; DOLA noted limits on using certain funds (for example, some cash or federal funds cannot be applied to staffing requests). Several committee members asked for follow-up details on specific programs and grant lines.

Middle Income Housing Authority (MEHA)

OEDIT briefed the committee on the newly created Middle Income Housing Authority (MEHA), which was created to finance middle-income rental projects (roughly 80%–120% area median income) through tax-exempt revenue bonds and local tax-exemption authority. Jeff Craft (OEDIT deputy director) and Peter LaFari (MEHA board chair) said rising interest rates and bond-market conditions have made it difficult to close gap financing for projects conditioned for MEHA support. LaFari told the committee that the board continues to meet with potential financing partners and that projects may pencil if market interest rates decline.

What’s next

Committee members were invited to engage with the JBC as budget work continues. DOLA and OEDIT committed to follow up with additional detail on requested items, Prop 123 award locations and the status of projects that were conditionally selected by MEHA. Several legislators asked for additional data-driven follow-up on topics including construction-defect insurance, usage patterns for the Defense Counsel on First Appearance grant, and local compliance with Prop 123 commitments.

Ending

The committee moved on to the Office of Economic Development and CHFA presentations after the DOLA hearing concluded and scheduled follow-up responses to several requests for information from DOLA and OEDIT.