Checking In: Colorado Housing Legislation

colorado housing legislation

The Colorado legislature is just passing the three-quarters mark of the 2019 legislative session and it is time to take stock of the legislature’s progress. The Bell Policy Center will be looking at a number of policy areas and explaining why these issues are important, and the specific bills moving to increase economic mobility for Coloradans. Here, we explore Colorado housing legislation from the 2019 session.

Rents and home prices continue to rise in Colorado, creating burdens on the housing market and the availability of quality affordable housing. Nearly half of Colorado renters are cost burdened, with 24 percent being severely cost burdened. That means almost half of renters are spending more than 30 percent of their income on housing, and 24 percent are spending more than 50 percent of their income on housing.

As the number of people moving to Colorado outpaces growth in available housing units, many families struggle to find viable options. In 2015, Colorado built 26,000 housing units, but this was significantly behind the more than 35,000 units needed per year to keep up with demand. These compounding factors mean families have less money to spend on other crucial aspects of their lives and are less likely to be able to move if their current housing is substandard or becomes too costly.

Why Colorado Housing Legislation Matters

The quality, cost, and location of housing can often determine the long-term prospects of families. Quality affordable housing provides the foundation for larger economic development, providing families with the ability to build assets and focus on job or education success. It also has been shown to decrease health problems and lead to the two-generational success.

Below, is an overview of Colorado housing legislation in the 2019 session and the potential benefits for Coloradans and the future of our economy.

Protections for Current & Potential Tenants

HB19-1170: Residential Tenants Health and Safety Act

Problem addressed: Many states have a standardized lease contract that holds landlords accountable for housing quality and give tenant’s options to remedy any deficiencies in the unit without fear of retaliation. Every Colorado lease contains a very limited “Warranty of Habitability” that ensures landlords are leasing properties that are safe for people to occupy. But, many leases in Colorado revoke the tenant’s right to withhold rent until major repairs are made or to temporarily move out of uninhabitable conditions. Tenants have little recourse when their homes become uninhabitable for various reasons, such as mold or a sustained lack of heat or hot water. In addition, without a standard lease contract, landlords can create their own timelines and policies for completing emergency repairs.

How this helps: Expands the definition of conditions that constitute “uninhabitable,” and provides tenants with expanded options when their apartments become uninhabitable, including the ability to move to a temporary location, the ability to deduct necessary repairs from rent, and termination of the lease if conditions are not rectified. Additionally, the bill protects tenants against retaliation and provides for more legal remedies for tenants to address landlord inaction.

HB19-1106: Rental Application Fees

Problem addressed: Application fees are the first step in screening potential tenants. Currently, there is no limit to the amount a landlord can charge for reviewing an application. Excessive application fees can create a significant barrier to accessing rental housing, especially for lower income tenants applying to several apartments over a short period of time. Also, few limits exist on how many years of information a landlord can access in making decisions about a prospective tenant.

How this helps: The bill addresses three main components of rental applications to allow for more access among applicants: 1. application fees, 2. background histories considered in applications, and 3. disclosures relating to denials of applications. First, the bill states a landlord may not charge a prospective tenant a rental application fee unless the landlord uses the entire amount of the fee to cover the landlord’s costs in processing the rental application. The landlord also cannot charge applicants different amounts. Secondly, if a landlord does background checks, the bill says they can only look at the last seven years of credit history and last fiver years of criminal history (except crimes related to methamphetamine, sex offenses, or homicides). Finally, the bill requires all landlords denying a rental application must provide a written notice of the denial that states the reasons for the denial.

Building More Affordable Housing

A lack of affordable housing inventory and increased demand for housing have been key contributors to rising rent costs, causing rent to become unaffordable in various regions across the state. In addition, the loss of formerly rent-restricted housing is a contributing factor. Affordability restrictions on approximately 22,000 affordable rental housing units are set to expire in the next decade across Colorado. While Colorado cannot build housing quick enough to mitigate the growing problem, every new unit helps. Colorado housing legislation like the below could help.

HB19-1245: Affordable Housing Funding From Vendor Fee Changes

How this helps: This bill increases the state vendor fee and dedicates the funding generated from that increase go to affordable housing. The bill would increase the allowance on sales tax accounts from the current rate of 3.33 percent to 4.0 percent starting on January 1, 2020. The vendor fee allowance is capped at $1,000 per month per retailer. At least one-third of the revenue generated from the increase will be awarded to affordable housing projects directed towards households with incomes less than or equal to 30 percent of the area median household income.

HB19-1319: Incentives Developers Facilitate Affordable Housing

How this Helps: The bill requires most state agencies and institutions of higher education to provide an inventory of vacant buildings and undeveloped land to the Office of the State Architect within the Department of Personnel and Administration. These properties can then be assessed for development of affordable housing. Because land is so scarce in many locations of the state, this process would allow would generate a new source of developable land.

HB19-1228: Increase Tax Credit Allocation Affordable Housing

How this helps: For tax years 2020 through 2024, this bill increases the amount of state affordable housing tax credits that the Colorado Housing and Finance Authority (CHFA) may allocate from $5 million to $10 million each year. This results in a total of $150 million in additional tax credits that can be allocated by CHFA over five years. These tax credits are a vital piece of building new units of affordable housing in Colorado, and this increase would directly lead to the development of more affordable housing units within Colorado.

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