Proposed housing-assistance cuts could displace thousands of Colorado renters, experts warn

The Trump administration is proposing a 43% cut to a critical federal housing-assistance program that could force thousands of Coloradans out of their homes, destabilizing families and straining the state’s rental market, experts at Metropolitan State University of Denver warn.

The program, known nationally as Section 8, helps low-income households afford rent by covering the gap between income and market-rate housing costs. Those in Denver County may be familiar with the Denver Housing Authority’s Housing Choice Voucher, which helps low-income families access Section 8 funds.

Across Colorado, more than 33,000 households rely on the program to maintain stable housing.

The administration’s proposal would require approval from Congress, which is debating the fiscal 2026 budget. Current House and Senate proposals would maintain the voucher program, though uncertainty around its future is stalling some affordable housing projects.

And if the subsidies were to disappear or reduced, a family currently using a voucher might not be able to pay rent, said Andy Proctor, director of the FHLBank Topeka Affordable Housing Institute at MSU Denver.

“Every one of the 33,000 households in Colorado that depend on Section 8 is a family — whether that’s a family of one or five,” Proctor said. “These are real people whose housing stability is on the line.”

More than just rent: the hidden cost of cuts

Christina Huber, Ph.D., professor of Economics at MSU Denver, underscored that Section 8 cuts would burden Colorado’s most vulnerable households, including low-income families, seniors and children.

“Even before these cuts, HUD estimates only one in four households that need housing assistance received it,” she said, referring to the U.S. Department of Housing and Urban Development. “We’re already failing to meet the demand, and this could make it worse.”

Huber pointed to the broader impact on local economies: “These households don’t have much to cut,” she said, “so they’ll be asked to sacrifice essentials like food, medication or car repairs to try and cover rent. If they can’t make up the shortfall, they could lose housing.”

That displacement, she emphasized, could affect everything from children’s school performance to future labor-force participation. “There’s a strong link between early-childhood investment and later adult outcomes,” Huber said. “Children in families that are housing-insecure generally grow up with fewer opportunities, less education and lower earning potential.”

A threat to Colorado’s rental market

Proctor noted that vacancy rates in Denver’s rental market are already higher than ideal. “A 5% vacancy rate is considered ‘stabilized’ in a healthy rental market,” he said. “Right now, we’re closer to 7%.”

If landlords lose Section 8 tenants, units could sit vacant longer, straining property owners’ ability to repay loans and shifting risk to financial institutions. “This isn’t just about tenants,” Proctor said. “It’s also about landlords, banks, apartment maintenance workers and city governments that rely on property taxes.”

Huber echoed that concern.

“Builders and landlords count on Section 8 to keep units occupied and rents paid,” she said. “Without that guarantee, they may slow or halt new affordable-housing construction altogether — and some investors may be scared away permanently.”

That’s especially alarming in places where affordable housing already lags behind demand. “If these workers are forced out, local businesses may struggle to hire,” Huber said. “It’s going to create economic stress far beyond housing.”

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The burden shifts — but doesn’t disappear

Huber stressed that the cost of Section 8 doesn’t disappear with cuts; it just moves elsewhere. “If the federal government steps back,” she said, “the expectation is that state and local governments pick up the slack. That means taxpayers are going to pay for this, one way or another.”

She added: “If the state doesn’t step in, the burden shifts to other parts of the safety net: emergency rooms, food assistance, shelters. These systems are already stretched thin.”

Learn more about the Affordable Housing Institute.