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Affordable Housing Debate Kicks off at Colorado Capitol with Contrasting Bills

While one of Colorado’s legislative chambers on Tuesday got its first long look at a bill that would allow local governments to implement rent control, a committee in the other chamber overwhelmingly backed a bill to build more workforce housing through public-private partnerships — a dichotomy around the affordable housing debate that may last all session.

Leaders of the Democratic-majority House and Senate said they did not believe that their members would have to choose the regulatory or partnership paths exclusively, arguing that the diversity in approaches to the housing crisis will create an all-encompassing conversation. But some, including Senate President Steve Fenberg, D-Boulder, also acknowledged that they did not know that the rent control bill will be able to survive the legislative process this year.

House Bill 1115, sponsored by Democratic Reps. Javier Mabrey of Denver and Elizabeth Velasco of Glenwood Springs, proposes repealing an existing state ban on cities and counties enacting laws that control rent on private residential property or private residential housing units. While simple in its wording, the bill could send shockwaves through the apartment and rental-housing sectors by limiting what landlords can charge tenants at a time when housing costs throughout Colorado have been skyrocketing but so have costs of building and maintaining housing.

Mabrey, an eviction defense attorney, said that as rent inflation has outpaced salary growth and made it hard for professionals like teachers or nurses to live in some parts of the Denver metro area, he wants to give local governments more tools to address cost-of-living issues. He argued that the policy is neither rent control nor rent stabilization in itself but rather an allowance for local governments to try new lines of attack, and he said he believes it could serve as a companion effort with the partner-focused Senate bill.

“I view this as an essential part of a broader package. When the governor talked in his State of the State Address about the need to build more, I see that as important too,” Mabrey said in an interview. “The rent stabilization could provide immediate relief, whereas the building bills could provide more relief in five to 10 years.”

 

Colorado state Sens. Dylan Roberts and Rachel Zenzinger present their bill on public-private partnerships in housing to a Senate committee on Tuesday.

The first effort aimed at boosting the inventory of available residences is Senate Bill 1, sponsored by Democratic Sens. Dylan Roberts of Avon and Rachel Zenzinger of Arvada, which passed the Senate Local Government and Housing Committee Tuesday on a bipartisan 6-1 vote.

 

That bill would enable the public-private partnership collaboration unit in the Colorado Department of Personnel and Administration to broker deals involving state property, working with developers and local governments to transfer, exchange or sell land that can be used for housing at about 55 sites statewide.

 

Karen Kellenberg, executive director of Habitat for Humanity of Colorado, noted land costs have risen between 48% and 256% in areas her homebuilding nonprofit serves, and partnering with the state to reduce land costs could help to spur much more affordable housing, she said.

Several business groups also backed the bill because it allows the state and local governments to partner with the private sector to address a top need, saying that employers are having a hard time recruiting workers because there is no nearby attainable housing for them.

In many ways, SB 1 and HB 1115 could not be more different. One seeks to create partnerships between the government and private sector in which private-sector developers could still generate profits, while the other could allow local governments to cut into the revenue that companies can earn.

Cary Bruteig, founder of Apartment Insights, which puts out a quarterly report on the Front Range rental market, said HB 1115 would harm Denver’s rental market. It would remove the ability to raise rents to cover increased construction costs, and it would end the incentive to improve the condition of the apartments to obtain a higher rent.

“By imposing a rent limit, you remove the incentive to create new housing units … and you also remove the incentive for somebody to fix up their apartment,” Bruteig said. “So, you end up with really a lack of housing, run-down housing and incredibly full housing in markets with rent control.”

 

Drew Hamrick, general counsel and senior vice president of government affairs at the Apartment Association of Metro Denver, said there are several unintended consequences that could come from removing the state prohibition on rent control. People could choose to stay in rental units for longer to hold onto their current rates, which means housing opens less often for potential new residents, and towns and cities could see their rental prices skyrocket if a neighboring government caps their rents, he said.

 

 

Colorado House Majority Leader Monica Duran and Speaker Julie McCluskie discuss affordable-housing bills at a media briefing on Tuesday.

Top House and Senate leaders said they didn’t believe that the paths of public-private partnership and rent control were mutually exclusive so much as they were two different ways of attacking the same problem. While they questioned whether the rent-stabilization approach has enough support to make it through the Senate — the House sponsors have 20 co-sponsors, while Democratic Sen. Robert Rodriguez of Denver is the only Senate sponsor — they said it’s not an either/or decision.

 

Fenberg cast the two bills as seemingly affecting different markets — one focused on potential new built-to-own homes on underutilized public lands and the other on rental units in higher-cost cities. He said he hopes that any effort to roll back prohibitions on rent control could be tailored to not create a New York-style program of rent caps but to give more freedom to local governments to implement more subtle affordable housing policies that the law now bars.

 

“I don’t think most of these policies conflict,” Fenberg said. “I think it is a matter of priority and what we want to do.”

House Speaker Julie McCluskie, D-Dillon, added that she believes solutions to the housing affordability crisis will need to touch on multiple areas, including the construction of more homes, tenant/landlord relationships and homeowners’ association oversight. And the diversity of viewpoints that come from a record-large 46-person Democratic caucus in the 65-member House is needed to find a place of consensus — a sentiment shared by House Majority Leader Monica Duran, a Wheat Ridge Democrat who is a cosponsor of HB 1115.

 

“It may not end up exactly the way it was presented, but that comes from a collaboration of bringing everyone to the table,” said Duran of the rent-control bill. “And the fact that a single person or a family cannot afford rent is outrageous.”

By   –  Senior Reporter, Denver Business Journal