HBA Advocate Newsletter | December 7, 2021

December 7, 2021

Metro Housing Coalition Celebrates Noteworthy Election-Day Victories

The Metro Housing Coalition worked diligently over the past year to recruit, identify, interview and endorse this year’s slate of city council candidates across the Denver Metro Area, and the hard work paid off with tangible results.

Over the 2021 election cycle, MHC Board members and staff identified 13 cities and towns deemed priorities for the residential construction industry. Within those municipalities, the MHC sent out a total of 126 questionnaires to all candidates running for office, conducted 65 interviews, endorsed 42 candidates and made substantial campaign contributions. The MHC also engaged in a number of independent expenditure contributions to provide additional support to business-friendly candidates in areas deemed “high priority” for our industry, including Commerce City, Thornton, Aurora and Lakewood.

Overall, the MHC’s endorsed candidates did very well on November 2, with more than 63 percent prevailing on election night. But if you assess the impact of our campaign strategy in the high priority municipalities that represent the greatest long-term growth potential for homebuilding, we certainly had a lot to celebrate.
 
In Aurora, MHC-endorsed at-large candidates Danielle Jurinsky and Dustin Zvonek both prevailed, as did our preferred Ward II candidate Steve Sundberg. These three victories will significantly reduce the intense gridlock that left Aurora City Council gridlocked for much of the past year. These three wins should establish a pro-housing majority in 2022 on the council.

In Thornton, the MHC worked diligently to re-elect Councilwoman Jessica Sandgren, as well as newcomers Tony Unrein and Kathy Henson. All three candidate will be sworn into their council seats this week and will give our industry a 5-4 working majority on City Council.

In Commerce City, the MHC Board supported the campaigns of incumbent Oscar Madera and long-time housing advocate (and former mayor) Sean Ford who both won their elections. Newcomer Rick Davis also won a seat on City Council after receiving substantial support from active homebuilders in the municipality.

In Lakewood, the MHC saw a unique opportunity to change the direction of what had become a hostile council to our industry. Voters replaced some dysfunctional undercurrents with a new generation of municipal leaders: Jeslin Shahrezaei in Ward I, Sophia Guerrera in Ward II and Rebekah Stewart in Ward III. These new council members should provide a much-needed change in trajectory for a Lakewood City Council that had become heavily anti-growth in recent years.

All HBA members should be pleased with this year’s election results. The influence of our MHC Board members and the financial resources of our organization played a major role in the final outcomes. The HBA is looking forward to working with new city council members over the next two years to help improve the current business climate across metro Denver to stabilize housing costs and help make the dream of homeownership a reality for a growing number of Coloradans.

Castle Rock Voters Say No to Massive Housing Tax

In addition to the successful local council races across the metro area, the HBA, MHC and several builder-members were pleased to see Town of Castle Rock voters reject Issue 2A by a 52.5 percent vote.

Issue 2A was referred unanimously by Castle Rock Town Council members and sought to place a $7-per-square-foot excise tax on future new single- and multi-family residential development within the town. Castle Rock leaders wanted the $14 million a year tax increase on future homeowners and renters to help resolve a current shortfall in the town’s public-safety budget. Working with our members in Castle Rock, as well as other industry partners, the HBA tried to meet with Council members and town staff to discuss our concerns and help find other solutions to the town’s budget issues. Unfortunately, town leaders decided to move forward with Issue 2A on the ballot, while also referring three other tax-related measures to the same election.

The HBA established an issue committee—Castle Rock Can Do Better—to oppose 2A on behalf of our members and the industry. The Castle Rock Can Do Better campaign focused on the impact of increasing the cost of housing—estimated at more than $20,000 on a future home in Castle Rock—and how that will impact the American Dream for generations of future town residents. The campaign effort was aided by the Colorado Springs and Denver Gazette newspapers editorializing on 2A, noting in the headline: “Housing prices in Colorado made even worse with whopping new proposal.”

Other campaigns and local citizens of Castle Rock also got involved in opposing 2A and the three other tax measures 2B, 2C and 2D. Voters also rejected 2C, a sales-tax increase. Now that voters have rejected the housing tax, the HBA will be working with our members and industry partners to communicate with elected leaders and staff in Castle Rock. We remain prepared to follow through on offer to the town from back in August that we would like to find a proactive and fiscally sound way to fund public-safety services without increasing the cost of housing and exacerbating our region’s housing attainability issues.

City of Aurora Considering Increasing Transportation Impact Fees

During a study session on October 18, Aurora City Council received an overview on potentially increasing impact fees on new homeowners in Aurora to help support transportation infrastructure within the municipality. Specifically, the proposal suggests increasing the transportation impact fee from $667 to $5,787.66 for a single-family home and $4,486.36 for a multi-family residential unit. While the city is rightly considering ARI credit adjustments and developer-initiated infrastructure improvements, such a dramatic increase will impose significant hardships on aspiring homeowners and price thousands of hardworking Coloradans out of the housing market.

These additional costs, especially if increased all at once, will make the cost of homeownership unattainable for many future residents with moderate incomes. The National Association of Home Builders’ latest “Priced-out Estimates” from January 2021 indicate a $1,000 increase in the cost of a median-priced new home will further price 2,310 Colorado households out of the market.

While the HBA of Metro Denver is generally supportive of infrastructure improvements to support the economy and enhance the quality of life of Aurora residents, we do not support placing the financial burden entirely upon new homeowners in the community. While we acknowledge that new transportation revenue in Aurora is badly needed, it is important that all residents who access and benefit from the City’s streets help support the agreed-upon improvements and upgrades.

To that end, a significant number of municipalities throughout Colorado have had success passing tax increases at the ballot box in recent years for a variety of purposes, including over three dozen local ballot measures exclusively for transportation. In 2015, fiscally conservative voters in Colorado Springs overwhelmingly passed a 0.62% sales tax increase to support transportation infrastructure within the municipality with 65% of the vote. Residents then reauthorized the tax for an additional five years in 2019 by the same margin.

The HBA of Metro Denver respects Colorado’s long-standing expectation that new growth pays for itself, but the current proposal before the Aurora City Council punitively singles out aspiring homeowners to pay for infrastructure designed to benefit everyone. Alternatively, we would enthusiastically support a proposal that asks all Aurora residents and visitors to pay a little more to support infrastructure improvements without sticking a small percentage of the of the population with the entire bill.

The HBA will continue to keep you updated on this issue going forward.

City of Denver Proposes Policy for New Affordable Housing Policy

Earlier this month, the City of Denver published the “Expanding Housing Affordability Proposed Policy Approach.” The proposed policy is in response to the passage of HB 21-1117, which overturned a Colorado Supreme Court case commonly known as the Telluride decision and allows local governments greater flexibility for the construction and funding of affordable housing units.

The new proposals will make significant changes to Denver’s existing program, including linkage-fee increases for housing developments with seven or fewer units, mandatory inclusionary housing requirements with alternatives including a mandatory two-tiered fee-in-lieu structure and incentives aimed at promoting the construction of affordable units. The City expects to conclude its Housing Affordability Project in spring 2022 and may approve a new ordinance with affordable-housing requirements soon thereafter.

With respect to projects subject to Site Development Plan review, all projects with applications for concept site development plan review submitted by June 30, 2022, and final SDPs approved by August 30, 2023, should remain subject only to existing affordable-housing requirements and will not need to comply with the proposed policy changes.

The planning review of this new policy will continue through the rest of this winter and into the spring, so there is ample opportunity for stakeholder input and involvement. While the HBA is under no illusions that a new affordable-housing ordinance will indeed pass, the final proposal is far from certain, and we are encouraging all of our active builders in The City of Denver to make their voices heard. 

Our association has participated in a number of stakeholder meetings related to this issue and is in the process of submitting a finalized letter to the City Council articulating our concerns and recommendations. We will continue to stay engaged and will be keeping our members updated on this issue and future opportunities for stakeholder engagement as they arise.