Aurora is grappling with affordable housing needs as demand for project funding increases and the state cuts grant money.

Currently, the city needs about 12,000 affordable housing units, Martin Petrov at Aurora Housing Authority told members of the Housing, Neighborhood Services and Redevelopment Policy Committee Tuesday morning.

Colorado lawmakers recently shifted money away from affordable housing projects into the state’s general fund to address a budget shortfall.

With the funding cut comes worry among Aurora’s housing officials, who said Aurora already does not get adequate funding to meet its need.

Aurora Housing Authority works with investors, landlords, nonprofit organizations and government entities to secure funding for affordable housing projects.

Colorado voters passed Proposition 123 in 2022, authorizing the state to keep money from existing state tax revenue to support affordable housing investment.

Jurisdictions like Aurora can get funding through the Affordable Housing Financing Fund if they make certain affordable housing development commitments.

Aurora’s commitment was 550 units per year, adding up to 1,650 units for a three-year period, according to Housing and Community Development Manager Sarah Pulliam.

At the latest count, Aurora was about 200 units short.

The Colorado Division of Housing received applications requesting funding that greatly exceeded the funds available, he said.

There is also increased competition for low-income housing tax credits, he added, saying developers have to be shovel ready on a perfect project to get funding.

“The funding is just not enough for everybody,” Petrov said.

Once a project is approved for those tax credits, it takes about three years for the project to be complete. That’s when the units can be counted, he said.

However, the city isn’t being awarded funding quickly enough to meet the requirements to continue getting funding.

“We don’t get awarded fast enough from CHFA to be able to put more units on the market,” he said. “We can’t just build units, we have to get the equity through the tax credits.”

Denver properties take most of the money available for affordable housing projects from the state, Petrov said. Aurora is more difficult to build affordable housing on due to a lot of land being farther away from employment and transportation.

Petrov called the situation “very, very frustrating,” saying the CHFA seems to prioritize projects in Denver despite having plenty of need and applications in Aurora.

Councilmember Angela Lawson proposed taking the matter to the city’s Federal, State and Intergovernmental Relations Policy Committee to consider advocating for more funding for Aurora at both the state and federal level.

Colorado state law requires cities to conduct a housing needs assessment every six years. In the most recent assessment, officials found that Aurora’s most critical need is affordable housing.

The definition of who gets affordable housing has changed over the years as rent and the cost of housing have increased faster than income, Petrov said.

Rent in Aurora increased 122% between 2010 and 2024, according to Root Policy Research, the contractor that conducted the recent Aurora housing needs assessment. This was a steeper increase than the state overall, Heidi Agler with Root said.

Meanwhile, average annual wages have increased as well, but not as quickly, Agler added.

“Ten years ago, when you heard affordable housing you were thinking 30% AMI,” he said. “Now affordable housing is you can make $60,000-plus a year and you’re considered 60% AMI. People don’t realize it because they think affordable housing is just for people in dire need.”