News & Events
2026 Housing and Land Use Bills to Watch
The Second Regular Session of the 75th Colorado General Assembly convened on January 14, 2026, and lawmakers have unveiled this year’s housing and land use proposals. In May 2024, six major land use bills passed, many of which went into effect in 2025. Although certain 2024 legislation has been the subject of local jurisdiction pushback over potential erosion of local control, and even lawsuits, Colorado lawmakers continue to seek opportunities for increased housing development.
The recently unveiled 2026 legislation includes HB26-1001, HB26-1065, the Lot-Splitting Proposal (not yet assigned a bill number), and SB26‑001, each as detailed in turn below.
HB26-1001, Housing Developments on Qualifying Properties
The bill is designed to promote streamlined residential development opportunities on “qualifying properties.” A qualifying property must contain no more than five acres of land and be owned by either a:
- nonprofit organization with a demonstrated history of providing affordable housing, providing public transit, or having entered into an agreement with another nonprofit having a demonstrated history of providing affordable housing. If utilizing the last option, the referenced agreement must require the nonprofit organization with a demonstrated history of providing affordable housing to develop a residential development on the subject property;
- school district;
- state college or university;
- housing authority; or
- local or regional transit district or regional transportation authority serving one or more counties.
The bill would require that residential development on a qualifying property undergo no more than an administrative review and approval process. Notably, the bill preempts local land use laws with respect to zoning and permitted uses, creating a narrow residential use permission on qualifying property regardless of the existing zoning and permitted uses.
If passed, developers may consider pursuing qualifying properties due to the reduced risk of discretionary approvals processes, which are commonly associated with residential development. However, lawmakers expect pushback on the bill from local governments, as well as the Colorado Municipal League, which has already voiced strong opposition.
HB26-1065, Transit and Housing Investment Zones
The bill provides a mechanism for a local government and transit authority to create designated transit areas for development, which will receive certain state sales tax revenue to finance improvements related to the development project. Within designated transit areas, either a Transit Investment Authority will be formed or an existing financing entity, such as a metropolitan district or urban renewal authority, will serve as the financial management authority.
The bill also creates the Colorado affordable housing in transit investment zones tax credit, which would be used to award qualified low- and middle-income housing projects in transit and housing zones. This tax credit would be administered similar to the Colorado affordable housing in transit-oriented communities tax credit, which was established with the passage of HB24-1434.
Over the last few years, Colorado lawmakers have sought opportunities to increase housing and supportive development near existing and prospective transit corridors. This recent proposal continues to align supportive transit infrastructure development with housing. Like all tax increment financing, this opportunity could spur development through the reduction of costly upfront infrastructure development, as well as increased housing in proximity to transit. The bill has not yet received extensive public opposition, but builds on HB4-1313: Housing in Transit-Oriented Communities, which has proved controversial during initial implementation.
Lot-Splitting Proposal
This proposal, which has not yet been assigned a bill number, would allow single-family home lots to be split into two, provided the secondary lot contains an accessory dwelling unit (“ADU”). The bill builds on HB24-1152, which went into effect in 2025 and requires subject jurisdictions to permit one ADU for accessory use to a single-family detached dwelling where such dwellings are permitted, subject to an administrative approval process. HB24-1152 provided the mechanism for single-family homeowners to add an ADU to their lot for-rent, and the Lot Splitting Proposal would allow those same property owners to efficiently divide their lots to create a conveyable lot in order to sell the ADU dwelling and underlying land.
While the proposal creates additional opportunity for homeownership, and particularly “missing middle” homeownership, opponents argue that it will degrade single-family zone district character. Although the splitting of lots will not result in multiple dwelling units on a single lot, it will increase density on current approved lot sizes by allowing additional housing units on smaller lot sizes. Supporters counter that the fabric of the land use and development design is not impacted by this change, but it merely provides an opportunity for increased ownership within already existing physical lot standards.
SB26-001, Workforce Housing & Housing Tax Credit
This bill, brief in text and details, would enable boards of county commissioners to appropriate general fund money from ad valorem tax revenue for housing authorities and workforce housing initiatives. The intention behind the bill is to provide more flexibility in financing housing projects, making such affordable and workforce housing projects more feasible.
We will continue to monitor this package of bills as they work through the 2026 legislative session.
