On March 11, 2026, the Colorado General Assembly passed Senate Bill 26-001, “Workforce Housing & Housing Tax Credit” (“SB 26-001” or the “Act”). SB 26-001 responds to gaps in existing law that have not kept pace with recent state initiatives to advance affordable housing needs. SB 26-001 changes multiple state provisions, including those related to use of local government property and tax revenue to address housing shortages, voting on issues concerning multijurisdictional housing authorities, and widening of tax credit and tax exemption eligibility for housing construction-related activities.
Counties –Appropriation Powers
SB 26-001 clarifies the authority of county governments under Colorado Revised Statutes § 30-11-107 to appropriate county funds for housing-related purposes. The Act amends subsection (1)(s) to specify that boards of county commissioners may appropriate money from the county general fund (without limitation related to ad valorem tax revenue) or from other special funds established by the board to support workforce housing, housing programs, and housing authorities.
The amendment resolves prior ambiguity in statute by confirming that this provision does not limit the authority of county commissioners to fund housing initiatives. Instead, it clarifies that counties have broad authority to appropriate funds for housing purposes.
SB 26-001 also clarifies that county funding authority extends beyond traditional affordable housing programs that serve low-income households. Counties may also support housing initiatives intended to address broader housing needs, including workforce housing. Although the Act does not define “workforce housing,” the term has been used in other contexts, particularly in rural resort and high-cost communities, to describe housing for locally employed workers whose incomes exceed typical affordable housing eligibility thresholds but who may still be unable to afford market-rate housing in their communities.
In effect, SB 26-001 confirms that counties may use county funds to support a range of housing initiatives, including workforce housing, as part of their general governmental powers.
Home Rule Counties and Statutory Cities and Towns – Disposition of Public Property
SB 26-001 expressly authorizes home rule counties and statutory cities and towns to sell and dispose of public buildings or real property held for governmental purposes, excluding park property, when the disposition is for affordable housing or housing identified in a housing needs assessment conducted pursuant to state law. Dispositions must be approved by ordinance, and the governing body vested with the authority to determine the terms and conditions of the sale and disposition. These conforming amendments will be codified in §§ 30-35-201 and 31-15-713, respectively, of the Colorado Revised Statutes.
Statutory Cities and Towns – Lease-Purchase and Financing Authority
SB 26-001 amends C.R.S. § 31-15-801 to explicitly authorize municipalities to enter into long-term rental or leasehold agreements for the development of affordable housing or housing identified in a housing needs assessment. Existing statutory safeguards remain in place, including limitations on lease term length, ordinance approval requirements, permissible revenue sources, and confirmation that lease obligations do not constitute constitutional debt.
Multijurisdictional Housing Authorities
The provisions in the Act amending C.R.S. § 29-1-204.5(7.5)(c) expand the election dates to refer related ballot questions to general, biennial local, or November odd-year elections. The Act clarifies that these elections shall be conducted in substantially the same manner as county elections. It also adds a new paragraph (d) to C.R.S. § 29-1-204.5(7.5) that permits contracts establishing such authorities to be conditioned on voter approval by an individual contracting jurisdiction as defined in the intergovernmental agreement. Further, a formation question may be combined with a question about a tax (and any associated impact fee), multiple fiscal year debt or other financial obligation required by the existing statute.
Middle-Income Housing Tax Credit and Building Material Tax Exemptions
SB 26-001 amends Title 39 regarding the middle-income housing tax credit to allow governmental and quasi-governmental entities to transfer credits to taxpayers who do not own an interest in the qualified development. The Act also clarifies credit recapture provisions and transferee liability during the compliance period.
The Act extends existing sales and use tax exemptions for construction and building materials used in public works to include county workforce housing projects, reducing construction costs for those developments.
Effective Dates and Final Passage
With limited exceptions, most provisions of SB 26-001 take effect following the expiration of the ninety-day period after final adjournment of the General Assembly.
SB 26-001 will become law if the Governor signs it or lets it become law without a signature within 10 days after March 11, 2026. If the Governor vetoes SB 26-001, the General Assembly may override his veto with a two-thirds majority. SB 26-001 previously passed both houses by more than a two-thirds majority.
For questions or additional information, please contact Kirsten Crawford (kcrawford@kaplankirsch.com).
