Please Support Affordable and Attainable Housing for Denver – Council Bill 15-0811

Anybody following the Denver housing market has noticed a very large decline in new for-sale and condo development. In fact, only one Central Denver condo project, containing 80 units, has been completed in recent years. That means only 0.6% of all residential units being built in and around Downtown Denver were condos. With the simple rules of supply and demand, the for-sale supply is at an all time low with demand rising causing record high average home prices.

So what is Council Bill 15-0811 and how is it going to fix the supply flow of condos in Denver?

From the Downtown Denver Partnership:

The Downtown Denver Partnership has long advocated for policy changes to address the effects that construction defects legislation has had on the Downtown Denver housing market. We are proud to have worked with the Homeownership Opportunity Alliance and the City and County of Denver on proposed Denver City Council Bill 15-0811 to help address these issues through local ordinance changes.
Championed by Mayor Hancock and his policy and legal teams, the proposed ordinance would do the following:
  • Limit the manner in which technical building violations can be used in construction defects litigation;
  • Support covenants that require alternative dispute resolution of construction defects claims; and
  • Institute a majority vote process with all association homeowners before legal action can go forward.
Denver City Council Bill 15-0811 offers a balanced approach that will create a fair legal resolution for construction issues. Importantly, the City’s approach will not take away a homeowner’s or community’s rights to seek a resolution to a construction issue.
The Downtown Denver, Inc. Board of Directors passed a resolution in support of City Council Bill 15-0811 to further emphasize the importance of having a variety of housing options and price points available in the center city and surrounding neighborhoods.

From the Homeownership Opportunity Alliance:

The Colorado General Assembly last session failed to address the defect in state law that exposes homeowners and builders to a high risk of expensive, time-consuming litigation—despite broad bipartisan and coalition support.

This defect means that Denver’s housing market has not kept pace with the demand for affordable and attainable homes among first-time homebuyers and others with a modest income. Rising housing costs and soaring rents threaten to price many Denver residents out of the market. Yet, condos, which have always provided a pathway to homeownership, now represent just 3.4 percent of new homes in the Denver metro housing market.

Now it’s up to the City and County of Denver to address this issue at the local level—like Aurora, Lakewood and seven other communities. Denver City Council Bill 15-0811 offers a balanced approach that will create a fair legal resolution for construction issues. Importantly, the city’s approach will not take away a homeowner’s or community’s rights to seek a resolution to a construction issue.

Here is how you can show your support and help get this bill passed:

  • Send a letter to your City Council member. Head on over to the Homeownership Opportunity Alliance to help you get started.
  • Attend the Denver City Council courtesy public hearing Monday, November 16th at 5:30pm at the City and County Building in the City Council Chambers, 1437 Bannock Street Room 451.

Balanced for-sale and rental development is critical for any successful housing market and Denver’s great future. We hope to see you Monday!

By | 2016-12-27T18:24:21+00:00 November 13, 2015|Categories: Advocacy, Attainable Housing, Urban Planning|Tags: |6 Comments

6 Comments

  1. sporobolus November 15, 2015 at 1:15 pm

    i am deeply skeptical, mostly due to the profound lack of evidence, that this law will lower insurance rates and produce more affordable condos; i don’t think that’s the reason developers want this law, or why Hancock wants this law; they want it simply because they want to make more money

    and why call it “alternative dispute resolution” when it is plain and simple binding arbitration which this law will support (mediation is voluntary, so on the slim chance a developer would put a mediation clause in their covenant, this law has essentially no effect)

    the law is on a fast track with a heavy machine working behind it

    • dave November 16, 2015 at 12:04 pm

      “and why call it “alternative dispute resolution” when it is plain and simple binding arbitration”
      TRUE.
      But, binding arbitration is so fair to the consumer.
      Just ask victims of the “security industry”.

  2. Nash November 15, 2015 at 2:36 pm

    Let’s all be there, urbanists. This can be a pivotal moment, getting these politicians on the record. With backing from the Denver Partnership, these rather modest changes should pass. But will the trial lawyers challenge them in court?

  3. Nick M November 17, 2015 at 6:30 am

    I have yet to see data proving this “defect” is the actual cause delaying new construction. Meanwhile, this benefits real estate developers tremendously and that’s a trend with Mayor Hancock’s administration… Supporting real estate developers over common citizens. Certainly cause for concern. Show me evidence in number form and I’ll be willing to consider, buy right now all I hear are anecdotes.

  4. Nash November 17, 2015 at 9:31 pm

    Nick, the anecdotes are pretty compelling, when you listen to developers and realtors with the real numbers. Last night, the debate among all parties before the Denver City Council resulted in a 5-0 vote of the committee, to send the Mayor’s “8-11” ordinance to the full council for a likely approval vote, in a week or two. (Denver Post first reported “next Monday,” then excised the phrase.)

    Most compelling to me, a high-end luxury condo developer testified that insurance companies are now telling him, “If you build condos, you will be sued,” and they will no longer insure a condo project. His banker tells him he’ll have to pay so many premiums on the loan that it’s no longer a profitable deal for him.

    So virtually NO condos are being built in Denver, under the current wave of lawsuits. Insurance companies are expected to wait until they can clearly see which way the wind’s blowing, before they back more condo and townhouse jobs in Colorado, and lower their premiums, with a lower perceived risk of a costly lawsuit.

    The trial lawyers are expected to immediately challenge the city’s ordinance, and the state courts could take years, sorting it all out. Much better, the Legislature will finally act, with the same features as Denver’s new ordinance, in adjusting the 2005 Construction Defects Law to a more even playing field between homebuyer “victims,” their HOAs — now being dragged into dozens, even hundreds of class actions — and the “evil” developers, who are unable and unwilling to build condos.

    Meanwhile, the governor refuses to lead on all this, even though there’s a bi-partisan majority in both houses, ready to pass a more balanced defects law, while Denver leads the nation in escalating home prices for a third year, and Millenials may already be deciding that Austin and other cities might be a lot more first-home affordable than Denver.

    So Nick, you’re going to keep hearing these anecdotes, about how Denver’s dropped from a normal “healthy” rate of condos as 25 percent of new home starts a decade ago — when the Defects Law was passed — to zero now. It’s a classic special interest law, written by and for trial lawyers, and now we see the “unintended consequence” of killing the condo market, and driving up the prices of both rents and for-sale homes, especially for first-time home buyers and down-sizing seniors, who want condos that no one will build.

    But don’t believe me, Nick. Show up at the next city council vote on bill 8-11, and hear the evidence for yourself.

  5. Jeff November 20, 2015 at 8:50 am

    Just wait for the next Beauvallon…

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