In the midst of an absence of enough affordable housing, Colorado legislators are proposing a new bill that could offer some relief to the Denver area. According to Democratic Rep. Alex Valdez of Denver, the office spaces left vacant due to the COVID-19 pandemic could be the answer to the state's affordable housing shortage.

HB24-1125 would offer tax credits to companies who choose to convert their office buildings into apartments, providing much-needed housing options for the growing population in the area.

Valdez, who is sponsoring the bill with Republican Rep. Matt Soper, Democratic Sen. Kevin Priola, and Democratic Sen. Jeff Bridges, believes this could be a "launching pad" to solve the state's housing shorting.

PRIME SPONSORS

Rep. Alex Valdez

Rep. Matt Soper

Sen. Kevin Priola

Sen. Jeff Bridges

The bill would create a refundable tax credit of up to $3 million per project for costs associated with adaptive reuse, including renovations and modifications to make the space suitable for residential use. The state Office of Economic Development would not be able to reserve more than $5 million in tax credits per year, limiting the impact to just a few projects.

Jennifer Ramsey, the adaptive reuse administrator for Denver, sees this as a step in the right direction. She believes the tax credit, although not a large amount, could act as a test case for future projects. The bill would also require an annual report on the impact of the tax credit, ensuring that the converted units remain affordable for residents.

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The concept of converting office buildings into housing is not new to Denver, with the recent successful transformation of the Art Studios building. Developers converted the former Art Institute building into 192 residential units, providing a range of affordable options for renters. The city has also identified 16 other potential buildings for adaptive reuse, estimated to add over 5,000 housing units to the city.

Ramsey believes this approach could be a game-changer for Denver.

With over 30% of office space in the city sitting vacant, it is a prime opportunity to repurpose these buildings and provide much-needed housing options for residents. However, experts caution that the costs for these conversion projects can vary greatly and may not be feasible for all buildings. Prewar buildings are more suitable for this type of conversion, as they often have better light access and functioning windows.

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The proposed tax credit bill comes at a time when Colorado lawmakers are considering various housing policies, including allowing accessory dwelling units in major cities and making it more difficult for landlords to evict tenants. The bill will face its first test during a committee hearing on February 29th, with the legislative session ending on May 8th. The first House committee hearing for the tax credit bill is scheduled for the end of this month.

If successful, this bill could be a promising solution to Colorado's affordable housing crisis. By utilizing existing buildings and encouraging adaptive reuse, the state can address the shortage of housing while preserving the character and community use of these structures.