Understanding Rising Costs in Affordable Housing: CHFA


Prompted by rapidly rising rents, increases in development costs, national and local concerns over the cost of developing affordable housing, and increased demand for affordable housing, this study examined trends in the Low-Income Housing Tax Credit (LIHTC) development costs in Colorado. The analysis aimed to identify cost trends, explain why development costs are increasing, and consider solutions for the challenges created by rising development costs.


Results show recent cost increases are due to a handful of factors, but the primary driver is construction costs (labor and materials). Overall, findings from the study recognize CHFA’s ability to balance innovation and flexibility with cost containment.

Community Development Finance Studies

Community Engagement

Housing Market Studies


Identified Strengths: Through our research, we found that CHFA is a well-trusted and strong local partner in LIHTC development.


Industry Engagement: We conducted more than 20 interviews with developers, builders, architects, and nonprofit housing providers, resulting in a variety of perspectives on rising costs and strategies to manage development challenges.


Policy Recommendations: BBC also proposed some modifications to the QAP to help incentivize cost-conscious developments without imposing rigid cost caps.

This chart shows the difference between soft vs. hard costs in low-income housing development in Colorado for the years 2011-2016. Hard costs are defined as site work and construction/rehab, and soft costs include land/buildings, professional fees, developer fees, construction interim costs, syndication project reserves, and any other costs.

Hard Costs

Soft Costs


34%$7,706,668 hard costs; $3,864,764.73 soft costs


35%$8,229,976 hard costs; $4,534,790.75 soft costs


31%$10,932,791 hard costs; $4,790,388 soft costs


30%$9,871,693 hard costs; $4,243,560 soft costs


29%$14,115,933 hard costs; $5,764,334 soft costs


28%$13,593,686 hard costs; $5,489,020 soft costs

Practice Area Leaders

Heidi Aggeler

Managing Director
303.321.2547 x256
[email protected]

Mollie Fitzpatrick

303.321.2547 x239
[email protected]

Jen Garner

Senior Consultant
303.321.2547 x236
[email protected]