State Senate backs bill to protect affordable rentals |

State Senate backs bill to protect affordable rentals

Colleen Slevin
The Associated Press
Aspen, CO Colorado

DENVER – A bill aimed at protecting affordable rentals, especially in expensive resort communities like Aspen, is advancing at the state Capitol.

The Senate gave initial approval to the measure last week and passed it on third reading, by a 21-12 vote, Monday. An earlier version was approved by the House, which must now consider the changes made by the Senate.

The measure (House Bill 1017) would protect deals struck between local governments and developers to build affordable rental units. Depending on the terms of the deal, discounted rents could still be required even if the property is sold to a new owner.

The bill says that such voluntary deals don’t violate the state’s ban on rent control.

“This is a very big deal,” said Tom McCabe, director of the Aspen-Pitkin County Housing Authority, one of several local officials who lobbied behind the scenes to help secure the bill’s passage. “From our point of view, it’s very important.”

Bill backers, including the Colorado Municipal League and Colorado Counties Inc., say the bill is needed because of a 2000 Colorado Supreme Court ruling that overturned an affordable housing ordinance in Telluride. That law required that most new developments create some affordable housing and allowed for the use of deed restrictions to maintain limited rents. Such restrictions would be allowed by the bill.

Cities and counties – Aspen, among them – worry that speculators could use the Telluride case to unravel existing voluntary agreements to create affordable housing.

In Aspen, one property owner is using it to challenge the deed restrictions on some employee housing units that he now owns and wants to rent at free-market prices.

Aspen and Pitkin County have more than 500 privately built rental units that were placed in jeopardy by the Telluride case, according to Mayor Mick Ireland, who has also lobbied legislators to support the bill.

Some developers also favor the legislation, according to Ireland. A hotel developer, for example, may want to build rental units with the intention of housing some of the hotel’s employees there. Without safeguards to keep that housing affordable, local government would be hesitant to allow it and the developer would be hesitant to build it, he said.

“When that agreement gets derailed, that doesn’t benefit anybody,” agreed local developer Tim Belinski, who was involved in the development of Obermeyer Place in Aspen, which included employee housing, but not rental units. He testified before a House committee on the bill last month.

The Senate changed the bill to clarify that it only applies to voluntary deals and that cities and counties can’t punish developers who won’t agree to build affordable units by withholding development permits.

Government can’t make a developer build rental housing, explained Tom Smith, attorney for the Aspen-Pitkin County Housing Authority, but it can require housing mitigation. That may mean building for-sale units, or providing cash in lieu of housing to government or the housing authority. In cases where developers agree to provide rental housing with capped rents, the bill clarifies that such an arrangement does not run afoul of laws against rent control, he said.

“It allows the flexibility for that [rentals] at least,” Belinski agreed.

But opponents say municipalities could still try to force a developer into making such deals and would have no recourse because governments are protected from lawsuits. Republican Senate leader Josh Penry tried but failed to give developers permission to sue if they were coerced.

Sen. Dave Schultheis, R-Colorado Springs, opposed the bill, saying resort areas were driving the need for affordable housing by paying “slave wages” to illegal immigrants.

Sen. Gail Schwartz, D-Snowmass Village, said she was incensed by his remarks, and said resort towns follow the law just like other parts of the state.

The bill is sponsored by Sen. Betty Boyd, D-Lakewood, and Rep. Daniel Kagan, D-Denver.

The amended version will go back to the House for approval.

“I’ve got my fingers crossed that nothing explodes when it goes back to the House,” McCabe said.

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