Amendment 74 is Wrong for Colorado

amendment 74 colorado ballot guide bell policy centerAmendment 74 would be a disaster for Colorado.

What is Amendment 74? 

Amendment 74 would allow property owners to sue Colorado and/or local governments if their property value decreases by as little as 10 percent — compared to the current precedent of about 90 percent — as a result of any law or regulation. This means any regulation, big or small — local zoning rules, permitting decisions around restaurants, minimum wage requirements, or energy development decisions — could be subject to millions of dollars in litigation.

Related: 2018 Colorado Ballot Guide — Recommendations & Analysis 

Not only would this cause governments across Colorado to lose huge sums of cash in potential lawsuits, but the only people who could actually spend the money to bring these cases would be large landowners and real estate companies. Bankrupt cities and wealthy landowners will be the new normal across Colorado.  

Oregon passed a very similar measure back in 2004. The state and its citizens paid dearly. 

Wait, what happened in Oregon? 

A similar measure to Amendment 74 was successful in Oregon’s 2004 General Election. Measure 37 mandated the government must pay a landowner when a land-use regulation reduces a landowner’s property value or produces an individual exemption for said property. Just in Portland, claims paid out in the first two years after the measure passed totaled over $250 million. Claims filed across the state totaled $17 billion. For some small towns and cities, a fraction of the $250 million would absolutely destroy their budgets.  

The Oregon measure was mostly repealed in 2007 after Oregonians saw it for what it was: a giveaway to large land developers that wreaked havoc across the state. 

OK, it didn’t work in Oregon and there might be some flaws with Amendment 74, but how would it work in Colorado?  

Let’s work through some hypotheticals to see how this could play out across the state.  

Affordable Housing Down the Street
We all know housing prices are problematic in Colorado, especially along the Front Range, pushing people further from the places they work and go to school. Finding places to build affordable housing isn’t easy for a variety of reasons, but now imagine any city or town that wanted to permit affordable housing faced lawsuits from 20-25 property owners, all claiming the presence of affordable housing would decrease their property value.

Would the city stop permitting affordable housing to spare the possibility of lawsuits bankrupting the locality? Would the city go forward and risk the time and money it would take to defend against these lawsuits? Would the state stop putting money toward housing knowing cities likely wouldn’t permit them anymore because of the threat of lawsuits? Because of the need for affordable housing, the result would likely be millions of dollars in lawsuits taking needed resources away from cities and counties throughout Colorado.

Minimum Wage Increase Equals Lawsuit
Back in November 2016, Colorado voters passed a new minimum wage increase, gradually going into effect through 2020. While the increase was popular enough to garner the votes, some businesses objected to it. What if a developer or retail business decided to close instead of raising wages for their workers?

If Amendment 74 passes, businesses and developers would be able to sue the state for a regulation that hurt their business, and as a result, reduced their property value because the business couldn’t continue. This would open the floodgates for large landowners, business owners, and developers to sue the state of Colorado. Colorado would have to shell out millions of dollars just to defend against these lawsuits, not to mention the millions of dollars the state would owe if it were to lose.

Payday Rate Caps & Amendment 74
Proposition 111, a key measure the Bell supports this November, would cap the rate at which payday lenders can charge interest. Currently, the average APR for payday loans is 129 percent, and Proposition 111 would cap payday loans at 36 percent — the highest interest rate charged on other financial products in Colorado.

But what does Prop 111 have to do with Amendment 74? If both Amendment 74 and Proposition 111 pass, the latter certainly won’t put payday lenders out of business, but they could make that case, especially if a few storefronts close up shop because they can no longer exploit vulnerable Coloradans to the tune of 200 percent APR. So, property owners could claim their property values decreased due to the loss of a renter as a result of a new regulation.

Dispensaries & Liquor Stores Near Schools?
Throughout Colorado, marijuana dispensaries are mostly prohibited within 1,000 feet of a school. (There are exceptions where schools move in after a dispensary has already been opened.) Stores selling alcohol are mostly prohibited within 500 feet of a school in the state. What if a property owner had a storefront 900 feet from a school and hoped to rent to a dispensary, but the city stepped in and said that it’s prohibited? Amendment 74 would give the property owner every right to sue the city in question.

Most parents would likely side with the city, but Amendment 74 doesn’t care. A city regulation prohibited the property owner from being able to do what he or she wishes, and by limiting how the property can be used, the value of the property would decrease. Again, the city would have to spend money to defend against this lawsuit, and possibly dole out damages to the property owner.

Noticing a pattern yet?

Bottom line: The ability for property owners to sue under Amendment 74 is practically endless. The people who can afford to sue state and local governments are wealthy landowners and developers. Everyday Coloradans don’t have the time or money to go toe-to-toe with the government over small decreases in property values.  

If you’re not convinced yet, consider what happens when state and local governments are out millions of dollars as a result of these lawsuits:

  • K-12 education and public universities in Colorado? Cut to the bone to pay out money to large developers.  
  • Hospitals and Medicaid? Not enough money to fund either after the state has to pay out damages because a business didn’t like the new minimum wage law. 
  • Money for transportation? The city can’t afford to maintain its roads because a zoning decision upset a wealthy landowner. 
  • Protecting the public from harmful chemicals? The state couldn’t move forward with that regulation because it would have cost lawsuits and millions of dollars. It’s just a few toxic chemicals in the air and water, right? 

The consequences to this type of initiative were seen in Oregon just 15 years ago, and Oregonians changed their minds immediately. Colorado cannot make the same mistake and follow the same road. Voting no on Amendment 74 is the only logical response given the evidence in front of us.