Castle Rock will aim to build more than 250 affordable housing units over the next three years after the town council opted to participate in a state fund reserved for addressing Colorado’s lack of housing.

At the Sept. 5 meeting, the council unanimously approved opting into a new fund created by voters passing Proposition 123 in 2022, which dedicates .1% of the state’s annual revenue to a variety of affordable housing programs, such as land banks and down payment assistance. 

By opting in, affordable housing projects in Castle Rock will be eligible for funding opportunities, which is around $160 million for 2024. The funding is project specific and does not have an impact on local zoning or land use ordinances.

The main requirement to opt into the funding is that the town, or regional group, commits to increasing the affordable housing supply by 9% over three years, which is equal to 277 units for Castle Rock by 2026.

Currently, Castle Rock has 3,067 affordable units.

The town will partner with the Douglas County Housing Partnership and other Douglas County municipalities to work as a region, which would allow any participating members to pool their affordable housing units when they calculate the increase. 

“By committing to working to increase our specific units for Castle Rock by 277 over the next three years, that allows Douglas County Housing Authority access to these new dollars, which could incentivize or fund additional units,” Castle Rock Development Director Tara Vargish said.

As a region, Douglas County’s aims to increase affordable housing by 1,203 units.

So far, Lone Tree has also opted into the fund and Castle Pines, Parker and Douglas County are scheduled to discuss participation soon, Vargish said.

If Castle Rock or the Douglas County region doesn’t meet the 9% increase over three years, they will be ineligible for funding in 2027.

“There’s not a repayment or any other issues that are triggered by (missing the target),” Vargish said. 

If the town opted out of the program, affordable housing projects in Castle Rock would not be eligible for state funding.

Vargish said the town is already working on increasing affordable housing units, such as with the Wellspring renovation of the former La Quinta Inn for housing for adults with intellectual and developmental disabilities. 

Mayor Jason Gray said he likes that the funding allows  local control.

“It helps us put affordable housing in places we believe are available for it,” he said.