Colorado’s statewide elections aren’t usually exciting in odd-numbered years, since there aren’t any statehouse, Congressional or statewide elections and the constitution limits what kind of topics can appear on the ballot.
But next November, Colorado voters may have their second chance in two years to increase the state’s involvement in the housing market.
An anonymous group is pushing a proposal, which is still in its early stages, to charge a “transfer fee” on the sale of most real estate.
Whenever a property is sold, the purchaser would have to pay a fee worth 0.1% of the sales price. The first $200,000 of the value, however, would be exempted from the fee. So for example, selling a $500,000 home would result in a $300 fee.
The money – totaling an estimated $70 million per year – would be spent on increasing the supply of “attainable housing,” targeting people who generally make too much money for subsidized “affordable” housing but still struggle with high prices.
There’s still a long way to go before the measure can go before voters.
On Wednesday, the state’s title board approved the language for the proposal. That means its backers may soon be able to start gathering signatures from voters. They would have need bout 124,000 valid signatures to qualify for the ballot.
So far, the initiative’s backers have not revealed themselves. Instead, they’ve been represented by attorneys with the law firm Butler Snow, who declined to identify their client or detail further plans.
“We are not prepared to answer those questions at this time,” wrote attorney Dalton Kelley in an email. “Once things change, we will be in touch”
The ballot measure also could be challenged in court, which would delay signature gathering.
Scott Wasserman, president of the progressive Bell Policy Center, said the title board’s approval sent a signal. Progressive groups like Wasserman’s have considered running similar proposals in the past.
If the current initiative is allowed to proceed, it could point to real estate fees as another avenue for state funding. And those fees can also be created by the legislature, not just by voters.
“The title board isn’t just a vehicle for getting something on the ballot, it’s also a vehicle for exploring legislative ideas,” said Wasserman, who said that he’s not involved with the current proposal.
As it’s currently proposed, the fee would begin in 2024.
The new funding would serve people making between 80% and 120% of an area’s median income. For example, in Arapahoe County, a household of four people with an income between $89,400 and $134,100 would be eligible to benefit.
If approved, the money would mostly go to the state’s Division of Housing in the Department of Local Affairs.
It could be spent on building, maintaining or rehabbing “attainable housing” for rent or sale. It also could be used to provide grants and loans to individuals, nonprofits and governments for housing. Local governments also would be allowed to keep about 5% of the money to cover the costs of collecting the fee.
Getting a ballot title approved does not mean that anyone will actually gather signatures or start a campaign. Running a statewide campaign can cost millions of dollars, and parties will sometimes test the waters by getting ballot language approved, but ultimately back away.
Voters recently approved Colorado’s first statewide housing measure, Prop. 123, which says the state must spend about $300 million of existing tax revenues on affordable housing. That measure didn’t raise taxes, but did reduce the amount Coloradans will receive from TABOR refunds and could cut into the money available for other state priorities. It passed with 52% approval.
Mike Johnston, a key backer of that earlier measure, didn’t immediately respond to a request for comment on Thursday.