State asked to undo ruling on rent caps
A court decision that threw a wrench into affordable housing efforts in Colorado resort towns has produced a legislative remedy that is before the state Senate today.
Senate Bill 31, drafted in response to last year’s Colorado Supreme Court ruling in a Telluride case, is scheduled for debate on the Senate floor today, after passing by a 5-2 vote of the Senate Business, Labor and Finance Committee earlier this week. If it wins approval in the Senate, it will advance to the House.
The bill would amend the Colorado law that prohibits government-imposed rent controls on privately owned residences. The new provision would allow rent caps on units constructed as a condition of development approvals.
“It’s very important legislation for affordable housing needs across the state, and particularly for Aspen,” said Aspen Mayor Rachel Richards, who wrote a letter to the Senate committee in support of the bill.
Telluride Mayor Amy Levek testified before the committee.
The bill is sponsored by Sen. Kay Alexander, R-Montrose, and Penfield Tate, D-Denver. The Colorado Municipal League’s housing subcommittee drafted the legislation and recruited the sponsors to introduce the bill. Aspen City Councilman Tom McCabe has been active on the subcommittee. He is also a member of the Aspen-Pitkin County Housing Board, which has been grappling with the effects of the court ruling in the Telluride case.
In that case, the state’s high court struck down an ordinance that required builders to provide affordable housing for 40 percent of the employees generated by new development. The Telluride law violated the state law prohibiting cities and counties from controlling rents on private property, according to the court.
The impact of the ruling reached beyond Telluride, though. Aspen and Pitkin County have hundreds of privately owned units, built as housing mitigation for development, that had government-imposed limits on the rent owners may charge the tenants.
“The affordability of a lot of units we already have is at stake,” Richards said.
The local Housing Authority has dealt with the ruling by requiring that it hold a small, undivided ownership interest in rental units that are built privately. The government ownership makes rent control on the units legal.
The better approach, said Richards, is to amend the state law to make its intent clear.
“The original court decision invited legislative action to clean this up,” she said.
The legislation would add new language to the state statute that prohibits rent control on private property by counties and municipalities.
The bill inserts an exemption to the statute for rent-controlled units built to furnish affordable housing as a condition of approval of developments. The new wording also makes clear that the state law does not prohibit “any state agency, county, municipality or housing authority to enter into and to enforce contracts to control rents on private residential housing.”
The Telluride ruling did not prevent governments from requiring the construction of deed-restricted affordable housing by developers. It only hampered government’s ability to require developers to provide rental housing, since there would be no guarantee a property owner would offer the units at a price affordable to local workers.
Privately built units that are sold to qualified workers at restricted prices and all rental and sale housing built by public entities, like the Aspen-Pitkin County Housing Authority, were unaffected.
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