More than $5 million in tax credits have been awarded in Colorado this year for the construction of special housing projects for the homeless and others in need.

Those incentives were among a larger pool of allocated tax credits aimed at increasing low-income housing availability in the state.

But officials tasked with creating more permanent housing opportunities for low-income residents acknowledge the state has a long way to go to meet a demand that is increasing in the face of skyrocketing rents across the state.

“We have never seen a situation where the supply of affordable housing exceeds the demand,” said Chris White, executive director and CEO of the Colorado Housing and Finance Authority. “The demand has always exceeded the supply. Therein lies the issue.”

CHFA, which White describes as a “quasi-government entity,” issues tax credits that go toward the construction of low-income housing units.

Gov. John Hickenlooper recently commended CHFA and the Department of Local Affairs, which oversees the Division of Housing, for their collaboration in the $5.3 million award of low-income housing tax credits that will serve those in the greatest of need.

The incentives will help finance the construction of 282 units in Denver, Greeley and Lakewood for those who are homeless or have severe special needs — the “highest number of this type of housing in Colorado’s history,” a press release from the governor’s office states.

The units are designed to provide permanent supportive housing, which helps the homeless and those who may be suffering serious mental or physical health issues reintegrate into the community.

“Combining affordable housing with access to support services like case management, employment training, and mental health treatment, these projects will strengthen Colorado’s overall continuum of homeless services and give residents the opportunity to live stable, autonomous, and dignified lives,” Hickenlooper said.

The governor said there is a shortage of permanent supportive housing units in the state. He points to a 2014 report that suggested 5,800 new units of this kind are needed in order to help individuals and families who are living in emergency shelters or on the streets.

That demand has resulted in the state-backed Pathways Home Supportive Housing Toolkit, which provides education and assistance to homeless service providers in an effort to create high-quality supportive housing.

White said the services “help people get out of the homeless cycle,” which not only betters their lives but eases the strain on resources that the homeless population can have in any given community. It’s unsustainable for the chronically homeless to continually seek services at shelters and hospital emergency rooms, he said.

“It’s much more expensive to manage the problem that way than it is to provide housing with long-term sustainable services,” White said.

Supply and demand issues

It’s not just the homeless or those with special needs who benefit from the tax credits CHFA provides. The tax credits create affordable housing opportunities for many low-income working families.

In 2014, CHFA allocated $16.6 million in federal tax credits for the construction and preservation of 1,558 affordable rental units in the state, according to CHAFA spokeswoman Jerilynn Martinez.

This year, CHFA is able to provide much more in funding thanks to legislation that renewed a state tax credit. CHFA has allocated $40.2 million in low-income housing tax credits this year, which will support the building of more than 2,800 affordable rental units in the state.

But even those gains are not enough. The state has a supply-and-demand problem for low-income housing.

White said that for every dollar CHFA allocates in low-income housing tax credits, “historically there’s been three or four dollars in demand.”

“So that illustrates pretty clearly the biggest challenge in these sorts of initiatives, and it’s just a fundamental lack of resources,” he said.

Colorado is experiencing a population boom that is bringing young, educated newcomers to the state, which boasts a strong jobs market.

But with that influx come higher rents. Rents in Denver have increased 5 percent a year since 2010 — among the highest increases in the nation.

And the problem disproportionately affects low-income Coloradans.

Data from the Center on Budget and Policy and Priorities, provided by DOLA, shows that 164,600 low-income households in Colorado use more than half their income on rent — 24 percent more than before the Great Recession.

The report also states that more than 60,000 low-income households in the state received federal assistance to meet housing needs in 2014.

The majority, 62 percent, of households that pay more than half of their income on rent are working households.

With limited housing options and few resources, low-income families often get left behind.

“Many of them, because of the huge rise in housing prices are priced out of the market and either become homeless because of that, or have to drive ridiculous distances just to be able to work because they can’t live in the communities in which they work,” said Irv Halter, DOLA executive director.

The narratives caused by this issue are heart-wrenching, he said.

“Could you imagine, and this is happening in our state and across the country every day, small children who are having to move from place to place, maybe Uncle Billy’s house one month, maybe another friend’s house the next one, never being able to stay in the same school because the parents are desperately trying to find affordable places to (live)?” he said.

Halter and White say that, with limited resources, the availability of tax incentives at the federal, state and local levels are vital to address affordable housing needs.

In the meantime, it’s the everyday people that everyone knows who are affected by the shortage.

“A low-income housing person is the young school teacher who teaches your kids,” Halter said. “It’s the assistant manager at the local Walmart. It’s the young cop who just joined your local police force.

“(These) are the low and moderate income housing folks we are targeting here — people who are working but need the ability to be able to live somewhere near where they work and be able to do that affordably.”

– Twitter: @VicVela1