June 15, 2021

Colorado’s 2021 Legislative Session and Affordable Housing

The Colorado legislature adjourned on June 8 after a busy 116-day session dominated by the threat of Covid-19, responding to the pandemic’s devastating impact and major policy issues – including housing.

The pandemic illuminated and exacerbated the systemic challenges many Coloradans face in securing stable, high-quality housing and staying in their homes. This is especially true for lower-income and Black, Indigenous and people of color (BIPOC) households whose health and economic stability have been particularly harmed by Covid-19.

Lawmakers sought to respond to the immediate housing crisis caused by the pandemic and to advance long-term housing stability through policies focused on tenant protections, eviction prevention and making high-quality affordable housing more accessible across the state –particularly for marginalized communities.

Enterprise is proud to have collaborated with legislative leaders, gubernatorial and state staff and myriad coalition partners to lead, shape and help pass many of these measures.

Tenant Protections and Eviction Prevention

This year’s session changed the landscape for Colorado renters and landlords. SB 173 puts reasonable restrictions on the late fees that landlords can charge tenants, limiting monthly fees to the greater of $50 or 5% of the rent owed and providing a seven-day grace period between when rent is due and when a fee can first be assessed.

Tenants will have significantly longer to pay overdue rent and remain housed – the current statute sets this “cure period” at 10 days – but it will soon extend to the point when a judgment is issued in eviction court.

Tenants will also now experience a more balanced playing field in eviction court with new provisions including:

  • Court summons with information on rental and legal assistance
  • A guaranteed seven days to prepare for trial
  • Lower-income tenants’ ability to bring a warranty of habitability defense to eviction without having to pay a bond
  • Meaningful damages for people who are illegally evicted by a landlord locking their homes without a court order

All of these protections take effect Oct. 1, 2021.

With the passage of HB 1121, tenants who lose their case in eviction court will have at least 10 days – up from two ­– from a judge’s decision until a sheriff can forcibly remove them from their homes. This allows tenants more time to find new housing or store their belongings and provides people facing the stress of eviction with a measure of clarity on what to expect and when. The bill also limits rent increases to once in a continuous 12-month tenancy for all tenants and requires 60 days’ notice of a rent increase for tenants without a written lease agreement.

To help prevent evictions, the legislature allocated $1.5 million to the state’s eviction legal defense fund specifically for low-income tenants facing evictions to obtain legal assistance, in addition to $1.6 million allocated through the state’s general fund and Proposition EE dollars.

And the legislature directed the State Judicial Department to detail the number and some key indicators of eviction court filings statewide for the past four years by Nov. 1, 2021. Information will include filing dates, whether landlords and tenants had legal representation, case outcomes, money judgments and zip code of the address where the eviction occurred. This data is critical to begin establishing a shared understanding of who is most impacted by eviction in Colorado and to better target interventions to communities who are disproportionately harmed.

Providing for New Affordable Housing

In response to a 2000 Colorado Supreme Court ruling that Telluride violated a statutory prohibition on rent control by implementing an inclusionary zoning ordinance, HB 1117 clarifies local governments’ authority to enact inclusionary housing policies that promote the construction or redevelopment of new affordable housing units. The new law requires that local governments choosing to enact such policies provide developers with options and to have taken one of many steps to increase density such as zoning changes or reducing parking requirements.

Moreover, between an unexpectedly robust state budget and a significant infusion of funds for recovery from the Covid-19 pandemic from the federal American Rescue Plan Act (ARPA), this year’s legislature moved billions with big implications for affordable housing.

SB 242 allocates $30 million for a grant program administered by the State Division of Housing (DOH) for the purchase or revitalization of underused motels, hotels and other properties to shelter and to provide supportive services to people experiencing homelessness. Individuals experiencing homelessness will also now be eligible for rental assistance and supportive services funded through the state’s Housing Development Grant Fund.

SB 252 creates a $65 million grant program for local downtown revitalization efforts, including mixed-use commercial centers, creative spaces and workforce or other sustainable affordable housing. 

Another three programs established in HB 1271 are intended to promote the development of affordable for-sale and rental housing across Colorado’s diverse communities. The largest will grant $39.3 million to local governments that adopt at least three policies or regulations from a flexible set of options or other innovative ideas to incentivize the development of high-quality affordable housing. The other two provide a total of $8.7 million for planning and technical assistance grants and a best practices toolkit for local governments to determine which initiatives will best advance affordable housing in their communities and move toward implementation. 

Finally, HB 1329 provides for the allocation of $550 million in flexible ARPA funds for affordable housing, focused on Colorado households and communities most impacted by the pandemic. For Fiscal Year 2021-22, $98.5 million will be prioritized for gap financing to affordable housing projects already in DOH’s pipeline and another $1.5 million for eviction legal defense (see above). A task force including policy and other experts will consider the remaining $450 million in the months ahead and make recommendations to the governor and legislature on how to invest these funds for transformative change and Coloradans’ greater economic opportunity, likely leading to further legislation in 2022.

Other Noteworthy Housing-Related Legislation

HB 1134 provides an opportunity for renters to establish or build credit through a one-year pilot program for volunteer landlords and tenants to report rent payments to credit agencies. Critical tenant-centered protections include: only rent payments (not fees) can be reported; landlords can choose to only report on-time payments; and tenants can stop participating at any time, which could help those faced with having to delay or not pay rent. The pilot’s evaluation should assess the impact on participants’ credit and should inform steps to dismantling broader, discriminatory systems that have led to persistent gaps in access to credit and wealth.

Housing assistance will also be more accessible for some systemically marginalized communities in Colorado. Undocumented immigrants who are otherwise eligible can now access state and local public assistance to remain stably housed under HB 1054, and the state budget directs $5 million to serve these households. HB 1108 adds gender identity and expression to the list of characteristics on which individuals cannot be discriminated against in accessing housing assistance and other public resources.

Administratively, HB 1009 updates the statute governing DOH with a focus on supporting transit-oriented development, advancing energy performance standards, and expanding collaboration with other state agencies. HB 1028 requires the Division to publish annual reports on activity pertaining to the preservation and production of affordable housing, starting in 2021. Reports will include public and private funds that came into DOH, and detail outgoing awards including dollar amounts, recipients and anticipated impact.

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