Find resources on important issues impacting the housing market today.
By The Numbers
Rent Control
The cost of rent in Colorado has increased. This results in unaffordable rental properties for Coloradans. As a solution, some Colorado state legislators have proposed the idea of rent control. However, government price fixing, as itâs sometimes called, does more harm than good. Rent control policies make the problem worse by reducing the incentives to build new rental units or improve the existing units. The solution to Coloradoâs rental shortage is to create more rental properties, preserve existing properties, and streamline the process of transferring housing from one user to the next. Click here for more information on rent control.
Evictions
A residential lease is between at least two parties, where one person loaning a property to another person. Housing providers enter a lease with another party with the understating the property will be well maintained and when the lease is up, the resident returns the property. When someone doesnât voluntarily return the property or when someone stops paying rent, the process to get the property back can take between two and four months. The timeframe depends on the county and fact pattern. Any policy that increases the time it takes to get a rental property back increases the cost of borrowing the property, thereby increasing rent for the property. For more information on evictions, click here.
Source of Income
If the Colorado legislators passed legislation including source of income, it would require housing providers to participate in voluntary federally subsidized housing programs such as Section 8. However, regulatory compliance with these voluntary programs can be expensive and beyond the sophistication of some housing providers. The cost of participation ends up being paid by residents who arenât in the program, which raises the rent for everyone. The solution is to update the federal program to make participation less expensive. For more information on source of income, click here.
Late Fees
Before late fees can be enforced, they must be agreed to by the resident and they must be reasonable. Because âreasonableâ is vague, there is interest in a mandatory cap on late fees. Defining a reasonable late fee for every rental agreement in Colorado can be challenging due to the wide variety in each agreement, delinquent balance, and level of lateness. It is also challenging because the late fee is not interest on the past due balance, but compensation for the administrative costs of a delinquent account. We SHAPE Housing believes an initial late fee of the greater of 15% of the balance due or $50 and a daily late fee and of the greater of 2% of the balance due or $20 would define âreasonableâ in this large variety of agreements. Click here to learn more about late fees.
Growth Limits
Growth limits are restrictions placed on housing developers to cap construction in a pre-determined area. In Lakewood, for example, an ordinance passed in 2019 that limits annual growth of new residential construction to 1% of housing stock in the city. The ordinance also limits permit requests for new dwelling units and mandates that the Lakewood City Council vote to approve or reject projects of 40 or more housing units. The intention is to encourage redevelopment and protect open space. However, growth limits also cause rental prices to increase. If there was a statewide measure passed that is similar to Lakewoodâs ordinance, it will lead to dramatically higher housing costs as supply would fall even further behind demand. To learn more about growth limits, click here.