Building on the Largest One-time Investment by a State into the Modular Industry
DENVER – Today, at the Innovative Housing Summit, Gov. Jared Polis, the Colorado Office of Economic Development and International Trade (OEDIT), and the Department of Local Affairs (DOLA) announced that 2025 Proposition 123 funding will prioritize cost-effective modular housing projects. With state support, modular and innovative housing manufacturers across Colorado are developing and advancing innovative construction methods that can help make housing quicker to build, more cost-effective, and more sustainable. Today’s announcement will build on Colorado’s largest one-time investment by a state into the modular housing industry and continue this critical work to develop attainable housing for every budget.
“We need more housing now, and innovative building technologies developed in Colorado are an important part of the solution. Prioritizing modular housing for the next round of Proposition 123 funding will continue Colorado’s work to make sure more people can afford to live closer to the jobs and communities they love,” said Gov. Polis.
Since 2022, the State of Colorado has taken steps to support the modular housing industry, also called the innovative housing industry or offsite construction, by supporting manufacturers from Pueblo to Aurora and Durango to Grand Junction. These companies are developing and advancing technologies key to growing the modular and innovative housing industry, including panelized construction, kit homes, 3D-printed homes, and the use of robots for single family and multifamily residential developments. State support has included:
- Innovative Housing Incentive Program (IHIP). Through IHIP, 10 businesses have been approved for performance-based grants totalling $9.6 million. These grants are projected to create up to 2000 housing units and have already directly incentivized 320 new housing units in communities like Fairplay, Ouray, and Denver.
- Modular Factory Loans. Combining funds from IHIP and Proposition 123, Colorado announced the largest one-time investment by a state into the modular industry in February 2024 by awarding $38 million in low cost loans to eight manufacturers subject to final underwriting. These funds are projected to support the production of over 4,700 units per year once all manufacturers are up and running and create 1,280 jobs.
“Prioritizing upcoming Proposition 123 funding for projects that use modular and innovative building technology will build on the work we have already done to support the development of a strong foundation for this important industry. Manufacturers across the state are working hard to help meet our state’s housing needs, and we want to see more Colorado communities benefit from their work,” said OEDIT’s Executive Director, Eve Lieberman.
“Investing in modular housing offers a strategic solution to address pressing housing needs by providing cost-effective, sustainable, and more time-effective deployable housing options for individuals and families, ultimately promoting community resilience and equitable access to safe and affordable housing.
"Innovative housing options are essential to ensuring that all Coloradans have access to safe, secure, and stable housing,” said DOLA Executive Director, Maria DeCambra.
OEDIT, in partnership with the Colorado Housing and Finance Authority, manages the distribution of 60% of Proposition 123 funds. DOLA manages the distribution of 40% of Proposition 123 funds. To date, OEDIT has awarded close to $40 million to housing projects in Colorado, including $25,340,000 to support land banking for affordable housing across the state and $14,500,000 to support housing projects through the concessionary debt program. In addition, $18 million has been awarded directly to manufacturers through the Modular Factory Loan program.
All projects eligible for funding from the Division of Housing (DOH) within DOLA may be modular if permitted by the local jurisdiction. DOH oversees the plan review, inspection, and installation of all modular housing, whether manufactured in-state or out-of-state. Examples of DOH-funded modular housing projects include Kit Carson Rural Development (5 homes, $225,000), The Midlands, formerly Carbonate Street (60 multifamily units, $4.2 million), and various rural home projects including: 24 units in Norwood ($4.84 million), 14 units in Ridgway ($4.7 million), and 23 units in Ouray ($7.15 million). Additional projects are the 8th Street project in Craig (20 units, $2.75 million), 3rd Street Habitat for Humanity in Eagle (16 units, $1.2 million), Anvil Mountain Apartments in Silverton (12 units, $305,430), and West Holden Place in the Sun Valley neighborhood of Denver (68 units, $2.2 million).
DOLA received the Modular Administrative Program of the Year Award, an esteemed recognition presented at the World of Modular conference and trade show, hosted by the Modular Building Institute. Colorado is the second state to receive this accolade, following Virginia's recognition last year.
DOLA and OEDIT are committed to advancing modular construction practices and fostering sustainable housing solutions statewide and will continue to coordinate this prioritization for modular construction through existing and new programs. The application cycles for 2025 Proposition 123 programs will begin in summer 2024.