Governors across the country – no matter their political party – are losing patience with local governments dragging their feet on housing reform.

Some dangle carrots. More brandish sticks.

In Colorado, Gov. Jared Polis escalated his efforts. A new executive order threatens to cut cities off from hundreds of millions of dollars in grants, loans, and tax credits if they refuse to comply with a landmark state housing law.

It’s a signal that polite nudging has ended.

Polis has company among top state executive peers. Call it common ground, or a "horseshoe" issue that bends from one end of the partisan political spectrum to the other, nearly joining polarized opposites with a single goal: Build more homes.

Florida Gov. Ron DeSantis muscled through a second update to the Live Local Act this Spring, aimed at pushing local governments to add more workforce housing. California’s Gov. Gavin Newsom took another swipe at red tape in June, gutting environmental hurdles to keep projects moving. And on August 28, Texas Gov. Greg Abbott signed a trio of laws over local objections, showing just how quickly this theme and variations are playing out across states.

In Colorado, Polis’s approach involves shifting $280 million in grants, loans, and tax credits to municipalities that comply with the new state housing law.

We are building more housing now and breaking down government barriers to new homes,” Polis said in a statement. “It is more important than ever to lower the cost of living. This action will lead to more housing that people can afford.”

The governor’s move — intended to spur faster development of attainable housing and reward pro-housing communities — comes amid growing tensions with home-rule cities that argue the state’s measures overstep local authority.

The governor lacks any authority to rewrite laws restricting funding to only so-called ‘pro-housing’ jurisdictions or to implement a strategic growth plan that has not been endorsed by the legislature,” Kevin Bommer, executive director of the Colorado Municipal League, said in a statement.

Taking Executive Action

On August 13, Polis issued an executive order supplementing his May directive, which had instructed state agencies to identify funding sources used to support housing initiatives. Under the new order, funds that also support transit, energy, and infrastructure will be prioritized for communities demonstrating compliance with Colorado’s recently enacted Strategic Growth Laws.

Those laws, signed in 2024 and 2025, aim to remove barriers to new construction, legalize accessory dwelling units, eliminate residential occupancy limits, reduce minimum parking requirements, and accelerate development in transit-oriented areas.

Compliance will be monitored through a framework overseen by the Colorado Department of Local Affairs, which publishes quarterly updates identifying local governments as compliant, in progress, or noncompliant. Beginning October 6, 2025, state agencies must use these rankings when setting priorities for discretionary and competitive funding.

Cities Ramp Up Legal Fight

Colorado’s aggressive approach has already triggered a lawsuit from six home-rule cities — Arvada, Aurora, Glendale, Greenwood Village, Lafayette, and Westminster— which sued Polis in July, seeking an injunction against the May executive order. They may also challenge the August order.

Aurora Mayor Mike Coffman and other local officials argue that the orders undermine municipal autonomy guaranteed by Colorado’s constitution.
It gives us the ability to make decisions about local matters like planning and zoning,” Coffman told CBS Colorado.” And this encroaches upon that authority."

With Colorado facing rising housing costs and a growing population, the outcome of this legal clash could reshape housing policy — not only in the state but potentially in others grappling with local resistance to housing mandates.

For now, Polis’s executive order draws a sharp line: cities that align with state housing reforms could unlock millions in aid, while those that resist may lose access to crucial funding for infrastructure, transit, and energy.

Two days following his most recent executive order, Polis released a lengthy statement highlighting an analysis from the Pew Charitable Trust. The report includes data evidence that boosting overall housing supply, even at higher cost tiers, significantly slows rent growth — particularly for older, more affordable units — relieving pressure on lower-income renters. Conversely, restrictive zoning and limited construction lead to sharper rent spikes and greater hardship for vulnerable tenants.

It is not rocket science that by increasing housing supply we can decrease rent spikes, and help more Coloradans realize the dream of home ownership,” Polis said.