An Equity Stake in Renting

This housing program kicking off in Colorado is really interesting. Basically it allows tenants to build their own equity if they pay rent on time and get cash back rewards. The program was created when voters in the state passed Proposition 123 in 2022, an affordable housing program funded through income tax revenue.

This program’s innovations are following a similar track as what Montgomery County Maryland is doing by taking profits from development they helped fund and steering them towards a benefit for low income residents. In Colorado, this is in the form of low interest loans to developers who want to participate in the program. The profits that would be generated then go back to the renters themselves in the form of rewards and savings matches.

There’s long been a need for renters to get some value for spending lots of their income on housing. This example is just another way that public policy can create outcomes that generate value for residents who are an important part of the community but don’t have the capital to benefit from their contributions.

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