Littleton council set to consider assigning full 2026 bond allocation to housing authority

Littleton City Council is scheduled Tuesday to consider assigning the city’s full 2026 private activity bond allocation — $3,162,447 — to South Metro Housing Options, a move city staff described in the June 16 council packet as support for affordable rental-housing financing without making the city responsible for repaying bond investors.

Resolution 23-2026 would assign Littleton’s entire annual private activity bond cap to the city’s housing authority for use in financing “qualified residential rental projects,” the council packet says. The packet does not identify a specific development that would use the allocation.

City staff said in the packet that the bonds are tax-exempt and can provide lower-cost financing for private projects that serve a public purpose. For multifamily rental housing, staff said, they are also the only eligible private activity bond use that can unlock additional federal 4% low-income housing tax credits.

The staff memo says Littleton had relinquished its private activity bond allocation to the statewide balance for the 15 years before 2025. The 2026 proposal would continue that newer policy direction after council assigned the 2025 allocation to South Metro Housing Options last year.

The assignment is time-sensitive: the proposed resolution says the allocation would automatically revert to Colorado’s statewide balance unless the bonds are issued by Sept. 15, 2026, or carried forward under state law.

The same packet suggests why the financing tool could matter to Littleton’s affordable-housing pipeline now. In a separate agenda item, South Metro Housing Options asked the city for $1 million for its 72-unit Starlight project, which the packet says would serve families earning 30% to 70% of area median income. Staff said the roughly $32 million project faced an estimated $3.5 million funding gap because of rising construction costs and uncertainty in soft funding sources.

Still, the available record does not show that the proposed bond assignment is formally tied to Starlight. The resolution refers only to financing qualified residential rental projects, and no post-meeting minutes, official result page or meeting video confirming a specific project connection were available in the reporting record reviewed for this story.

A separate housing-related item was also on the agenda. Ordinance 16-2026 was scheduled for second reading and would allow some Group R-2 multifamily buildings to use a single exit stairway if they meet additional safety and design standards.

City staff described that change in the packet as both a housing-production tool and a safety-regulated exception. The memo says Littleton is not legally required to adopt the state’s single-stair framework because of its population, but officials evaluated it as a way to support housing diversity, affordability and infill redevelopment. The ordinance also says single-exit buildings could help enable family-sized units, missing-middle housing and apartment development on constrained lots.

The packet also outlines added life-safety requirements, including full sprinklers, smoke-control systems, fire-resistance standards, short travel distances to the stair, limits of four units per floor and fire-access requirements. Staff also cited early data suggesting that eliminating a second staircase can cut construction costs by about 10%, with added fire protections reducing the net savings to about 7%.