Creating Jobs and Affordable Housing: Polis Administration Announces Innovative Housing Incentive Program
DENVER – The Innovative Housing Incentive Program (IHIP), announced today by Governor Polis and the Business Funding & Incentives Division of the Colorado Office of Economic Development and International Trade (OEDIT), introduces new funding opportunities to support the development and expansion of Colorado’s innovative housing manufacturing businesses. Based on the understanding that strong economic development includes job creation and the development of attainable housing, IHIP will foster both across Colorado.
“The Innovative Housing Incentive Program will help create up to 5,000 high-quality, low-cost housing units in Colorado over the next 5+ years, saving people money and creating new jobs. Transformative programs like this ensure there is housing for every budget in our communities which is increasingly important as our state grows. This will support our teachers, healthcare providers, and other critical industry workers to access housing near where they work, helping ease workforce shortages. I look forward to exciting housing projects and the progress that will come from this exciting innovation,” said Governor Jared Polis.
Compared to traditional building practices, modular, manufactured and kit homes may be produced more efficiently and at a lower cost while also creating stable, year-round, high-quality jobs. Supporting the expansion of these factories and the development of new innovative housing businesses will save money for Colorado’s workforce in need of affordable housing and may make home ownership more attainable for some families. It also lowers the cost of affordable housing for local governments and organizations looking to purchase factory built housing to provide rentals for lower- and middle-income households.
“Colorado is already home to innovative housing manufacturers, including factories in urban centers like Denver, Grand Junction, and Pueblo, and rural areas like Buena Vista. These companies, along with up and coming businesses looking to get a foothold, want to create jobs and develop housing in all types of Colorado communities: small, large, rural and urban. The Innovative Housing Incentive Program will truly make a difference across the state,” said Eve Lieberman, OEDIT Executive Director.
IHIP grew out of recommendations from the Affordable Housing Transformational Task Force established by the Governor and General Assembly during the 2021 legislative session and informed by private stakeholders and the Division of Housing within the Department of Local Affairs (DOLA).
“Colorado is committed to making a historic investment with the state's innovative funding approach to housing affordability and economic growth. Programs like the Innovative Housing Incentive Program can assist in expanding Coloradans and their various communities' access to affordable housing options and job prosperity throughout the Centennial State,” said Rick Garcia, DOLA Executive Director.
As part of that process, innovative housing manufacturers expressed a need for short-term support to respond to supply chain constraints and narrowing margins as well as longer-term financing to build their first or second factory. HB22-1282, which was sponsored by Colorado Reps. Mike Lynch and Kyle Mullica and Colorado Sens. Jeff Bridges and Rob Woodward, created a program that addresses both types of needs and is becoming nationally recognized for its use of traditional economic development tools to address housing needs.
"This innovative program creates new manufacturing jobs while at the same time increasing our supply of housing, helping to solve one of the greatest challenges we face here in Colorado," said Sen. Jeff Bridges. "Every Coloradan should be able to live where they work. Expanding the availability of this kind of housing will help improve our economy while keeping Colorado affordable."
“With the cost of living on the rise, Coloradans need better affordable housing options in the communities they call home,” said Sen. Kyle Mullica. "We must increase the supply of long-term affordable housing across Colorado—the Innovative Housing Incentive Program will do just that.”
“The Innovative Housing Incentive Program is a critical step toward ensuring that Coloradans get the relief they need from the rising cost of living,” said House Minority Leader Mike Lynch. “At a time when too many Coloradans are struggling to afford to live in this state, this program will deliver by creating good manufacturing jobs and better affordable housing options.”
Colorado-based, innovative housing manufacturers that have 500 employees or fewer and commit to increasing Colorado’s supply of affordable and attainable housing may apply for working capital grants and per-unit incentives or a factory development loan:
Working Capital Grants and Per-Unit Incentives
Through working capital grants, eligible businesses can be reimbursed for up to 20% of monthly operating expenses up to $350,000, or $450,000 in Tier One Just Transition Communities. An additional $50,000 bonus award is available for manufacturers that produce affordable housing. Substantial cash incentives will also be available under the grant program, with per-unit incentives between $1,500 and $6,000 for every unit built and installed in Colorado. Higher dollar amounts will be awarded for units that are affordable and energy efficient. Applications are currently being accepted on a rolling basis.
Factory Development Loans
Factory development loans will support the development of new factories or the expansion of existing factories. A competitive application process will consider energy efficiency, the percentage of affordable housing units to be produced, the number and quality of jobs to be created, the proposed terms of the loan, and the financial health and qualifications of the applicant. The application window opens in early 2023.
A total of $40 million in funding, allocated from the State’s General Fund, has been set aside to implement IHIP. The program will be administered by OEDIT in partnership with the Department of Local Affairs (DOLA) and the Colorado Housing and Finance Authority (CHFA), and with input from Colorado Energy Office and the Governor’s Office. Learn more at https://oedit.colorado.gov/innovative-housing-incentive-program
About Colorado Office of Economic Development and International Trade
The Colorado Office of Economic Development and International Trade (OEDIT) works with partners to create a positive business climate that encourages dynamic economic development and sustainable job growth. Under the leadership of Governor Jared Polis, we strive to advance the State’s economy through financial and technical assistance that fosters local and regional economic development activities throughout Colorado. OEDIT offers a host of programs and services tailored to support business development at every level including business retention services, business relocation services, and business funding and incentives. Our office includes the Global Business Development division; Colorado Tourism Office; Colorado Outdoor Recreation Industry Office; Colorado Creative Industries; Business Financing & Incentives division; the Colorado Small Business Development Network; Cannabis Business Office; Colorado Office of Film, TV & Media; the Minority Business Office; Employee Ownership Office; and Rural Opportunity Office. Learn more at oedit.colorado.gov