Denver, Featured, Sherrie Peif

Denver rental licensing scheme draws criticism; increased rents, tighter credit requirements likely consequences of plan

DENVER — A plan to require residential rental property owners in Denver to be licensed and undergo inspections every four years or when ownership changes, is being met with criticisms from the industry, including one man whose family has been in the rental business for nearly 100 years.

“This is really a mixed bill, Dr Jekyll and Mr Hyde kind of bill,” said Dan Brooks, who owns and operates his family’s four-generation business in Denver.

Brooks said he is not opposed to licensing. He is not opposed to fees. He is not even opposed to inspections. However, where the money the new program collects will be spent, he said, will only hurt tenants more, and the only people who will benefit are lawyers.

“It will benefit legal aid and it will benefit my attorneys,” Brooks said, pointing out that the money will be used by the city to help tenants fight eviction. “It should go to wrap around services to keep them from being evicted, not used to defend them in court. It will drag out the process. All it will do is delay eviction.”

Brooks said landlords generally know the financial condition of their tenants before anyone else.  He would like to see the money be used for things such as funding transportation for a tenant who can’t pay their rent because they can’t get to work.

“What I need is social service to help that person get what they need to be able to stay in their home,” Brooks said.

Under the proposal, landlords will pay a $25 per-complex fee between 2022 and 2024. Beginning in 2024 that fee will go to $50 per-complex.. Application fees will be an additional cost up to $500 depending on the size of the complex.

Under the plan, a complex is the dwelling that houses individual residences. For example, a single-family house is one complex, a duplex is one complex, a 100-unit apartment building is one complex. Landlords are not being charged per individual unit.

Units will be inspected and come up for renewal ever four years. According to the digital news site Denverite, the proposal would result in more than 54,000 new licenses — nearly $1.5 million in new revenue.

The Colorado Apartment Association said in a news release that the proposal would only cause already high rental rates to increase. The association compared the one license per parcel to a plumber needing one license for every sink and called an inspection without complaints another “unnecessary increase in the cost of providing housing.” The proposal comes at a time when tenants are already struggling to pay their rent.

“The rental licensing program is yet another regulatory action that will increase the cost of renting in Colorado,” said Drew Hamrick, general counsel, and senior VP of government affairs for the Colorado Apartment Association. “While many say they are proponents of creating affordable housing, this is just another example of several proposals, bills, and ordinances that will lead to more expensive rental housing.”

Hamrick said if Denver is “truly committed to creating more affordable housing, several solutions exist that would benefit the entire community, such as reducing barriers to building, loosening zoning restrictions or increasing housing vouchers that will allow more housing to be built.”

Brooks, who owns 10 buildings with approximately 100 tenants, said he also believes it will make it harder for the marginal credit applicant to find housing because landlords will be much more focused on odds of eviction.

“There will be a restriction of tighter credit terms,” Brooks said. “They will be hurting the person who needs the most help. This is the first time the government will interfere with a private contract between two people. It’s like a marriage. Don’t tell me who I can marry and who I can divorce. I support the intent, but I cannot support the outcome. The city should not be getting involved in civil matters.”

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