AURORA, Colo. (CBS4) – As rents skyrocket and incomes remain flat across Colorado and the country, it’s getting harder and harder to save up for a downpayment on a home.
Rep. Mike Coffman is proposing new legislation that would help first-time homebuyers in that process. It’s intended to help people like Mengis Brhane, an employee with Aurora Public Schools.
Brhane immigrated from Eritrea three years ago. He currently spends about a third of his income on rent, and that makes the idea of saving up for a house tough.
“My dream house is a three-bedroom,” said Brhane, who is saving money with the intention of eventually being able to afford a house. “My daughters, they say that ‘I need my bedroom.'”
Brhane recently sought advice from Patrick Noonan of Brothers Redevelopment, who holds workshops for first-time home buyers.
“The biggest barrier is that purchase price. With the purchase price comes a high downpayment,” Noonan told CBS4.
The median price of homes in Colorado is nearly $360,000, and in Coffman’s Congressional district — District 6, which includes Aurora — a national survey recently rated the situation for renters at a crisis level. The research, out of Harvard, indicates half of renters in Coffman’s district spend at least 30 percent of their income on rent.
“I think home ownership is so important, not in terms of just giving people a way to save — in fact save for their retirement through equity in their home — but also it creates stability in a community when people are truly vested as homeowners,” Coffman said.
The legislation would change federal tax laws to allow Americans buying homes for the first time to create special savings accounts that could grow up to $150,000 without being taxed.
“I think people would take advantage of this program,” Noonan said. “I think we need every tool in place possible to really help people compete in this challenging market.”
Coffman, a Republican, says he has wide bipartisan support for the bill and he is hopeful of getting it passed.
Colorado passed a law last year that waived state income taxes on similar savings accounts.