In what will undoubtedly be a legislative session for the history books, Colorado state lawmakers this week approved a laundry list of new legal protections for renters and allocated millions in state and federal funds to help address the state’s affordable housing crisis, which worsened throughout the pandemic.
Senate Bill 21-173 permanently strengthens legal protections for renters by putting limits on how much a landlord can charge in rental late fees, extending the grace period for paying back owed rent, and rebalancing the legal power tenants have when facing an eviction or challenging their landlords in court for uninhabitable living conditions.
“I feel really excited, and really just relieved, because this was a really challenging policy to work on,” said Cesiah Guadarrama Trejo, associate state director for the working women’s advocacy group 9to5 Colorado. “But at the end of the day, it’s just remembering how hard our members have worked for this, and how much this is going to directly impact people on the ground.”
The law, which has yet to be signed by Gov. Jared Polis and won’t go into effect until Oct. 1, will prohibit landlords from charging a tenant or mobile-home owner a late fee unless rent is more than seven days late, and it mandates that the fee not exceed $50 or 5% of the rent that’s past due.
Under the law, landlords will be prohibited from initiating an eviction solely for outstanding late fees. Tenants will also be able to pay back their rent at any time until a court has issued a judgement for possession. Under current law, landlords are not required to accept past rent owed once an eviction has been filed in court.
Another housing bill waiting to be signed into law, House Bill 21-1121, would give people 10 days after a judge approves an eviction to vacate the property. Currently, people have 48 hours.
This bill also prohibits a landlord from increasing the rent on a leased property more than one time a year, and it would extend the notice for rent increases for people on month-to-month leases from 21 days to 60.
Guadarrama Trejo said she is glad to see the protections be approved by lawmakers but recognizes the work is far from done to recalibrate the power dynamic between landlords and tenants.
“There are still a lot of topics not covered in this,” she said. “So, this is just the start.”
New requirement for developers to increase affordable housing units
A bill passed by Colorado lawmakers this year will allow cities and counties to require new rental developments to include some affordable housing units, a policy known as inclusionary zoning.
House Bill 21-1117 clarifies state law to say that Colorado’s ban on rental control policies — which was established in 1981 — does not apply to local inclusionary zoning policies, as long as those policies offer a developer more than one option for adding affordable housing besides just building lower-priced units. Those options could include land donations or cash for lower-cost housing.
Other cities across the country with tight rental markets, such as New York City, Los Angeles, and Washington, D.C., have used these policies to try to safeguard affordable housing units as the population swells.
Last year, Democratic state lawmakers put forth a similar bill, but the legislation was postponed indefinitely in May 2020 after lawmakers returned to the Capitol following the pandemic-triggered recess.
Influx of funds of affordable housing projects
This month’s Colorado State Housing Board meeting was more celebratory than usual.
On June 8 after Alison George, director of the Division of Housing, announced that lawmakers officially directed $550 million from the American Rescue Plan to the DOH. Approximately $100 million will be allocated now, and the rest will be decided on this summer in a legislative interim committee.
“We are reaching out to stakeholders about how that process will look,” George added. “We have a couple of intended approaches that will help expedite and increase the funding. We’re looking at something maybe similar to what we did after the 2013 floods to maximize the types of developments that are funded, that are shovel ready, essentially, really trying to expedite the development of housing as soon as we can.”
The large influx of funds left many in the group speechless.
“I never expected to be sitting here in my life, having this conversation,” George told members of the Housing Board. “There is lots of opportunity, and lots of affordable housing that’s going to happen.”
Two more bills will also increase funding for affordable housing projects
Senate Bill 21-242, if signed by Polis, will allow local governments and nonprofits to apply for funding from the state’s housing development grant fund to rent or purchase underutilized spaces such as hotels and motels to house people experiencing homelessness.
The bill transfers $15 million from the general fund to the housing development grant fund to be used for rental assistance and tenancy support programs for people experiencing homelessness or to allow local governments or nonprofits to purchase underutilized properties such as hotels and motels to house people.
Another bill, House Bill 21-1271, directs $13 million in state funds to create three additional grant programs within DOLA that aim to incentivize local governments to increase their affordable housing stock.
The first program, dubbed the Housing Development Incentive Grant Program, directs $9.3 million from the state’s general fund to local governments that have adopted three or more land use policies that promote the development of affordable housing.
Examples of such policies include zoning changes to increase the number of housing units allowed on a particular site, promoting mixed-use zoning that allows for housing in a wider range of developments, increasing the permitted household size in single-family homes, and promoting denser housing development near transit or places of employment.
The two other grant programs would help local governments hire consultants to figure out how to promote and remove barriers for affordable housing projects. Colorado’s Division of Housing within the Department of Local Affairs is also now required to create a yearly public report to document how — and where — affordable housing funds are used.
Editor’s note: This story was updated at 12:13 p.m., June 15, 2021, to correct the point at which tenants will be able to pay past-due rent.