Legislators in Colorado Pass New Tenant Protections for Renters Who Use Housing Subsidies

By Nada Hussein, Research Analyst, State and Local Innovation and Tia Turner, Project Manager, Our Homes, Our Votes 

Tenants in the State of Colorado who utilize housing subsidies, such as Section 8 Housing Choice Vouchers, will be entitled to stronger legal protections against discriminatory housing practices. The state’s new law, passed through “House Bill 25-1240” in May, strengthens the rights of renter households in three key ways, including: (1) protecting voucher holders against evictions; (2) ensuring tenants who utilize housing subsidies are entitled to protections if a landlord has violated the state’s warranty of habitability; and (3) protecting tenants against unfair housing practices and discrimination through damages and civil penalties for landlords. Colorado Governor Jared Polis signed the new policy into law on May 29. 

The bill, “House Bill 25-1240,” was sponsored by Representatives Junie Joseph (District 10) and Meg Froelich (District 3), as well as Senators Faith Winter (District 25) and Katie Wallace (District 17). The bill is also known as the “Protections for Tenants with Housing Subsidies” bill. Housing subsidies, which are a form of financial assistance disbursed and managed by governing bodies at the federal, state, and local levels, help the lowest-income households pay rent. Housing subsidies are commonly provided by governing bodies through housing vouchers, which includes the Section 8 Housing Choice Voucher Program, through direct payments to landlords, housing tax credits, and public housing units owned and operated by the government that assist qualified households based on income, availability, and other factors. Through the voucher program, Public Housing Authorities (PHAs) who oversee the distribution of vouchers allow tenants to search for housing on the private rental market, in an area of their choosing, with the PHA paying out a portion of a tenant’s rent directly to the landlord. This requires tenants to cover the remaining portion of their rent. 

In 2025, there are more than 3,300 Public Housing Authorities across the country, with more than 2.3 million renter households utilizing the Housing Choice Voucher Program. 

Colorado’s new law will have positive reverberations in protecting tenants who rely on subsidized housing, which includes low-income renters, seniors, disabled renters, and veterans, against the threat of discrimination. Renter households who utilize housing subsidies often face discrimination based on their status as a voucher recipient. Known as “source-of-income” discrimination, housing voucher recipients may be subject to landlords and property owners who refuse to rent to tenants outright based solely on their source of income. To mitigate the discrimination that tenants may face due to their status as a voucher holder, state and local jurisdictions have passed “source-of-income” anti-discrimination laws, which protect tenants from discrimination from a landlord or property owner based on the method in which the tenant uses to pay rent. According to the Poverty and Race Research Action Council, there are more than 20 states and 130 localities that have enacted source-of-income protections for tenants as of 2025. In 2021, the State of Colorado joined this list by passing such protections for tenants through “House Bill 20-1332."  

Section 8 Housing Choice Voucher recipients may face challenges in securing housing opportunities due to the disproportionate discrimination they face. According to the HUD, a housing choice voucher is time-limited, meaning all vouchers are provided to renter households with an expiration date attached. As delineated by HUD, voucher recipients have at least 60 days upon initial receipt of the voucher to secure housing. If a voucher goes unused, a tenant is subject to the risk of returning the voucher and reapplying for assistance. In 2025, as the shortage of affordable and available housing for tenants with the lowest incomes continues to grow, reaching a gap of 7.1 million rental homes affordable and available to renters with extremely low incomes, the average waiting time to receive a voucher can take years.  

In Colorado, there are more than 180,000 households classified as extremely low-income; meaning they make at or below the federal poverty line or 30% of the state’s county-level area median income, whichever is greater. In the Boulder and Denver-Aurora-Lakewood areas, the adjusted home income limits provided by HUD for 30% of the area median income levels are classified at $30,700 and $27,400 for a one-person household, respectively. On the whole, Colorado faces a shortage of 134,281 affordable and available rental homes for extremely low-income tenants, meaning there are just 26 affordable and available homes for every 100 renters. In utilizing a housing choice voucher, tenants are empowered to find and secure housing of their choice. 

To help mitigate the risk of discrimination against Colorado renters who receive housing subsidies and go beyond the state’s existing source-of-income protections, “House Bill 25-1240” outlines several protections for renter households. As mentioned, there are three main ways in which the state’s new law protects tenants, including: 

Protections Against Eviction  

Landlords who own four or more units are required to comply with the notice period requirements distinguished by the federal government’s “Senate Bill 3548” or the “CARES Act,” which requires landlords to provide tenants with a 30-day notice to vacate in eviction cases stemming from the nonpayment of rent.  

Protections When a Landlord Violates the Warranty of Habitability 

Commonly defined as the minimum housing standards to which a landlord or property owner must adhere to ensure a rental unit is safe for habitability, a “warrant of habitability” is a protection afforded to tenants to ensure that a rental unit is free from dilapidated housing conditions that pose harm to a tenant’s health and safety. Under “House Bill 25-1240,” if a tenant is able to prove in a court of law during an eviction case that a landlord has violated the state’s warranty of habitability law, the court is required to order a reduction in the Fair Market Rental value of the unit and require the landlord in turn to provide the tenant with a reimbursement in the difference of what was paid for rent in comparison to the new Fair Market Rental value. Under the new law, it is required that the landlord reimburse the money to the tenant regardless of whether the tenant paid for rent using a housing subsidy or not. 

Protections Against Unfair Housing Practices, Including Damages and Civil Penalties for Violating the Law 

Tenants who pursue legal action against a landlord for engaging in unfair housing practices or discrimination of the tenant based on their usage of housing subsidy to pay rent may be entitled to relief for damages that result from the unfair housing practice levied against the tenant. Under the new law, if a landlord or property owner is found to be in violation of the law, such as by engaging in discriminatory behavior, the court will award the tenant at least $5,000 in damages. Further, the law includes a provision that the court shall also consider in its ruling the losses that might also be incurred for a tenant if a tenant must return their housing subsidy if it goes unused or is forfeited. Moreover, the law also notes that a landlord or property owner may be subject to facing a civil penalty issued by the Colorado Civil Rights Commission as noted by existing law. However, the law updates this provision to establish a minimum penalty amount of $5,000.  

As noted, Colorado’s new law is critical to protect tenant-headed households. According to the Center on Budget and Policy Priorities, most housing choice voucher recipients in the State of Colorado are comprised of the most marginalized and lowest-income renters. According to a January 2025 factsheet, over 129,000 people—or 70,000 households—utilize federal assistance in the State of Colorado to help pay for rent. Of these households, 72% are comprised of seniors, families with young children, or people with disabilities. 

More information on Colorado’s law can be found here.