When discussing housing, it’s important to not lose sight of the effects of Proposition 123. The recently passed law directs hundreds of millions of dollars that would otherwise be refunded under the Taxpayer’s Bill of Rights (TABOR) towards high-density, subsidized housing starting now and moving forward.
Local governments, including municipalities, towns, and counties are just starting to discuss Prop 123 implementation, which will affect the growth and population of each jurisdiction. The Department of Local Affairs (DOLA) and Office of Economic Development, with the guidance of the measure’s proponents, are leading the instructional workshops on how to set a baseline in the local governments in Colorado.
After the local government’s baseline is set, the political jurisdiction must increase subsidized and preferred high-density housing by 3% per year, each year, to satisfy the requirements of the new mandate to get what would normally be refunded to taxpayers under TABOR.
Here’s the possible options for land locked governments, especially Denver metro, to achieve this 3% dense subsidized growth per year:
- Replace existing market-based housing with subsidized housing.
- Build higher.
- Increase allowable housing density.
- Any combination of the above.
As one of many fighting against Proposition 123 last year, I participated in debates and mentioned the problem of where the government would literally find space to fit the housing they state we need, especially if landlocked or a growth limit is present like Lakewood or Golden.
In my Denver Post column from July 2022, I posed the question:
“At what point might local governments discourage and make it more difficult to build single-family homes? Examples abound, including Minneapolis, Oregon, and California banning single-family developments. It seems far-fetched that Colorado would enact these restrictive policies, but that’s what we have to anticipate with passage of this ballot measure.”
It seems less and less far-fetched at this point in time.
We have the current puzzle pieces in play.
House Bill 23-1190: Affordable Housing Right of First Refusal
Here’s what important about HB 1190. It grants a local government or the housing authority the right of first refusal to buy a “qualifying” property if it is fifteen or more residential or mixed-use units in the urban areas and five or more in the rural parts of Colorado. This new law would allow governments to hold up property sales for an unlimited amount of time; although the timeline grants up to 90 days, there’s a tolling clause which allows the total time frame to be extended if a “reasonable delay” arises that is outside of the government’s control. That means an unknown amount of time that a property owner could be in limbo with their financial future in the hands of the local government.
Another problem with HB 1190 is that as written it implies a sales cap on these “qualifying” properties because the bill declares the price stated in the notice given to the government in step one must not be prohibitive to that government in making a successful offer. Who would define that? It sounds like a regulation of a sales price and government gets to be the judge, it has a strong resemblance to a property taking without just compensation.
The proposal also prohibits a property owner from “colluding” with a potential buyer for the purpose of inflating a sales price above market value. But how would the government fairly determine that when they’re the one holding the right of first refusal card?
The bill also harms renters. Once the local government or their designee gains ownership, those tenants who have a higher income than permissible under this bill will be allowed to stay only through the end of their lease.
If a property owner doesn’t comply with the bureaucratic rules or there’s an unfair interpretation of this badly written bill, there’s a intimidating mandatory fine of $50,000 or 30% of the listing or purchase price, whichever is higher.
HB 1190 has passed the state House and already been heard by a senate committee. The bill is set for second reading on the state Senate floor on Monday, April 10 with debate and final vote to follow. It sadly looks like it will pass unless something dramatically changes. There’s no indication that Governor Polis has intentions to veto the bill.
The bill was amended down to appease critics. That looks like a garage sale move at this point. Ask for more than you want, bargain down and get the buy-in.
Now, look at the next jigsaw piece moving around the table.
Senate Bill 23-213: Land Use
The bill has created an uproar in local government because it proposes to turn over local zoning to the state. Despite being sold as a property rights issue, the goal of the bill is to increase subsidized density. I wrote about it here.
One of the components in a long list of densification envisioned in this bill is allowing four accessory dwelling units (ADUs) on pretty much all residential lots.
How would that interact with HB 1190 up above? One main residential property and four ADUs in a rural area equals five units making it is a multi-unit property that would qualify under the right of first refusal scheme.
There were several hours of initial testimony on SB 213 but there wasn’t as much of a spotlight on HB 1190, certainly not on the new government powers granted as part of the right of first refusal.
How big is this plan to increase the amount of government controlled, taxpayer funded housing? Another subsidized, high-density ballot measure (Initiative #3), Establishment of a New “Attainable” Housing Fee has already been through the title board process.
It’s clear that the majority Democrats in the legislature want far more density, but how far will they go to control our housing, eliminate our choices, discard our property rights, and risk our future?
It’s almost certain that not all the pieces have been laid out on the table yet, and more surprises could pop up, as there are far, far too many hours left before the legislative session ends for the year.
Editor’s note: The author, Natalie Menten, will be discussing the bills mentioned in this column at a community meeting at Rockley’s Events Center 8555 West Colfax Ave., Lakewood, CO 80215 on Tuesday, April 11 from 6:30-8:30 pm. Zoom option is https://us02web.zoom.us/j/9273613854 ID: 927 361 3854
Natalie Menten is a long time political activist from Lakewood, TABOR Foundation Board Director, and a former elected director at the Regional Transportation District (RTD)
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