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Housing advocates warn cuts to Prop 123 financing would stall projects and scare private capital
Summary
Developers and housing advocates told the Joint Budget Committee that sweeping or reducing Prop 123 (referred to as Prop 1/2/3/Prop 123 in testimony) financing would halt projects already underway, jeopardize private co‑investment, and reduce the state's leverage in affordable housing development.
Affordable‑housing advocates told the Joint Budget Committee that changes to the state's Prop 1/2/3 financing program (often referenced in testimony as Prop 123) would interrupt projects that have already closed or are under way and would chill private investment that leverages state dollars.
Abby Murray, co‑founder and CEO of the Colorado Housing Accelerator Initiative, said CHI "has already invested close to $10,000,000" alongside Prop 123 projects and is actively raising a $75,000,000 fund to invest alongside state financing. She asked the committee to maintain the tenant equity vehicle and the broader Prop 1/2/3 allocations in the FY26‑27 budget.
Housing economist Luke Teeter, who helped design the financing fund, told the committee that the program is meant to be catalytic rather than direct spending and cited a leverage ratio from early outcomes: "every $1 that gets swept from the proposition 1/2/3 financing fund results in $8 less affordable housing investment in Colorado," he said, framing the long‑term tradeoffs of short‑term budget cuts.
Local and rural practitioners described immediate projects in Mesa County, West Colfax and other areas that depend on the financing pipeline and urged the committee to respect the voters' intent and preserve funding for ongoing deals. Committee staff and members requested fiscal scenarios showing short‑term savings versus long‑term investment losses before making final appropriations.
