One of new Colorado bills to spur housing construction offers incentives to local communities
Jan 21, 2026
Gov. Jared Polis and Colorado lawmakers unveiled three bills Wednesday that are intended to ease and expedite the construction of affordable housing — the latest proposals in a yearslong attempt to rein in prices and instability in the state.
The bills largely build upon — or resurrect — legis
lation that was passed in previous sessions or was considered, but fell short. Polis, several Democratic lawmakers and a constellation of housing and affordability advocacy groups have spent much of the past three years working to rewrite land-use codes, primarily along the Front Range, to make it easier to build housing.
The reform push, unprecedented in the state’s recent history, has changed the status quo in which local governments were largely left to oversee their own zoning and housing decisions. A yawning housing deficit prompted Polis and lawmakers to pursue more top-down reforms, a move that has resulted in pushback by several cities in the courts.
Rep. Andy Boesenecker, a Fort Collins Democrat, said the state ranks second-worst in the United States for its overall housing deficit.
“The state demographer estimated that Colorado’s housing shortfall is over 100,000 units. To put it in perspective, that means we have to build 34,000 homes every year just to prevent the shortfall from increasing,” he said during a news conference unveiling the latest legislation Wednesday. “We know we’ve done so much, and we know we have so much more to do.”
One of the bills, House Bill 1066, would exempt vacant land that will later be the site of subsidized rental units from being subject to property taxes. A law passed two years ago did the same for land that its owners planned to build houses on.
Another measure, House Bill 1001, would allow nonprofit groups, school districts and housing authorities to build housing on their land, largely without being subject to local government approval. A similar version of that bill — which explicitly included religious organizations like churches — died last year.
The third bill, House Bill 1065, would set up two financial programs for which local officials and developers could apply. One would use sales tax revenue collected near a transit stop to help fund projects that are intended to boost access to transit. Those projects could include adding signs, changing roadways and building transportation facilities. Lawmakers intend to fund three projects a year through that program.
The second incentive would be $350 million in tax credits, spread out over six years starting in 2027, that are intended to support the construction of affordable housing near transit stops.
Both of those incentives would follow one of the larger land-use reforms passed in 2024, House Bill 1313, which required primarily Front Range cities to increase zoning to allow denser building in transit-rich areas.
Public transportation has been a key piece of the land-use reform push in the Capitol. Supporters argue that by building housing near transit, and by increasing the strength and availability of that transit service, the state can better curb its greenhouse gas emissions.
The new incentives bill is something of an olive branch to local governments, whose officials have repeatedly fought land-use reforms that they see as intruding on their authority.
“I want to emphasize that it’s really refreshing to be working hand-in-hand with local governments,” Rep. Steven Woodrow, who’s sponsoring the incentives bill, said. He also sponsored HB-1313 two years ago; local governments opposed that law.
“It’s not a mandate, it’s not top-down,” Woodrow said. “This is actually a bill … that provides resources to local governments, which is a refreshing change for all sides.”
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The Colorado Municipal League, which represents the interests of local governments, is still reviewing that bill and hadn’t taken a position on it, said Kevin Bommer, the group’s executive director. The group also had no position on the property tax exemption bill, which is backed by Democratic Reps. Katie Stewart and Rebekah Stewart.
But the group is opposed to HB-1001, the one that would make it easier for nonprofit groups to build housing on their property.
“Municipal leaders across Colorado are actively working to increase affordable and attainable housing opportunities,” Bommer said in a statement. “One-size-fits-all policies from the state Capitol ignore the unique needs of each community. House Bill 26-1001 would strip away local authority that has been the foundation of responsible growth and balanced planning in Colorado for decades.”
HB-1001 was introduced on the first day of the session last week. The two other new bills were expected to be introduced later Wednesday. All are supported by legislative Democrats.
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