Paying rent on time might finally pay off for tenants in Colorado.
Earlier this week, Colorado Governor Jared Polis announced a program for select renters across the state: Colorado Renter Rewards. The initiative allows renters to earn cash back for on-time rent payments, sharing in a property’s equity as it grows over time.
The program is limited to renters living in properties financed by the Proposition 123 Equity Fund, which provides investments to construct and preserve low- and middle-income rental developments.
A ballot initiative approved by voters in 2022, Proposition 123 transfers one-tenth of 1% of taxable income every year to an affordable housing fund, bringing in an estimated $290 million to support low-income housing annually.
And now, that support will further uplift low-income renters, so they can ideally save up to put a down payment on a home one day, build long-term savings, or have a safety net for unforeseen expenses.
“By helping renters save the money needed to make a down payment on a home, more Colorado families will be able to build wealth and security,” Gov. Polis said in a statement. “Home ownership is a major pathway to financial security, and now more Coloradans will be able to realize the dream of owning a home.”
For each on-time monthly rent payment, eligible participants will receive 2% cash back. This will be delivered via a digital wallet on the platform Stake and can be saved, transferred to 13,000 banking and financial institutions, or used for other deals for renters inside the digital wallet platform.
While the program does not have stipulations for what that money can be spent on, those who decide to save their cash back for 12 months will receive a match of what they have saved, up to an additional 2% of their rent.
The Fall River Village apartment complex in Estes Park is the first property to pilot the cash back scheme. Photo courtesy of Fall River Village/Facebook
Residents who remain in an eligible property for more than one year will also be included in annual equity distributions, based on returns from their housing units.
Known as a Tenant Equity Vehicle, the renter rewards program is the first approach in the nation that puts property equity back into the pockets of tenants.
“The Proposition 123 Colorado Renter Rewards initiative is the first statewide tenant equity strategy in the nation, helping create more opportunities for Coloradans to live close to jobs, schools, and in the communities we love while saving money and helping renters build equity,” Gov. Polis added.
Right now, the program is only operational in one Proposition 123 property — Fall River Village in Estes Park, just outside of Rocky Mountain National Park.
The property joined the program this month, with 66 individual and family renters eligible to earn cash back by paying their rent on time.
The Colorado program is being implemented through the Business & Funding Incentives division of the Colorado Office of Economic Development and International Trade and Colorado Housing and Finance Authority.
“The Colorado Renter Rewards program is a powerful example of how we are helping Coloradans build economic stability and opportunity. By pairing affordable housing with cash back and equity payments for renters, we are helping more people love where they live and save money,” Eve Lieberman, the OEDIT executive director, said in a statement.
“This is a smart investment in our workforce and families, supporting long-term economic growth and a Colorado economy that works for everyone.”
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Header image by Daveynin (CC BY 2.0)
