The HBA Advocate Newsletter | July 5, 2022

July 5, 2022

New Local Economic Impact Reports on the homebuilding industry in the Denver Metropolitan Area now available

Homebuilding generates substantial local economic activity, including new income and jobs for residents, and additional revenue for local governments. The National Association of Home Builders, in partnership with the HBA of Metro Denver has developed two reports that provide estimates of these economic benefits to local governments and the regional economy here in the Denver metropolitan area.

The reports capture the effect of the construction industry itself, the ripple effect that occurs when income earned from construction activity is spent and is recycled within the local economy, and the ongoing impact that results from new homes becoming occupied by residents who pay taxes and buy locally produced goods and services.

Please click here to review the economic reports.

Thornton Considering New Growth Pacing Ordinance to Cope with Limited Water Supply

With larger than anticipated opposition to Thornton?s proposed water pipeline in Larimer and Weld counties, the municipality is now contemplating a temporary pacing ordinance to ensure all new development has sufficient water supply. Although the city has already begun construction on the 70-mile water pipeline that will provide long-term water supply to meet future growth projections, they have continued to run into short-term political resistance to the project that has transformed into a protracted legal conflict in Larimer County District Court.

The good news is that the City of Thornton has developed an interim solution to bridge the gap between current and future water supply by building a 24-inch water pipeline to convey water from the city?s Hammer Reservoir to its water-treatment plants. The bad news is that this will only provide enough water for an additional 4,000 households in Thornton, and city staff are concerned about over-extending capacity beyond that ? at least until they are certain about when the new long-term pipeline can be completed.

In order to ensure the rate of growth in Thornton is consistent with the current water supply, municipal staff has developed a proposal that will allocate plats based on a tiered system that takes the city?s long-term goals and priorities into consideration. The city is currently in the process of approving 1,000 plats that have already been spoken for and is planning to begin approval on the remaining 3,000 this fall. Allocations will be made two times a year and limited to a maximum of 60 single-family detached and 70 single-family attached, respectively per development.

While the HBA fully understands the city?s rationale for an interim pacing ordinance, we also want to make sure that the new order is only temporary and takes issues surrounding seniority and annexation into account. Our builders in Thornton have also submitted questions and concerns regarding the proposal that they would like to see fully contemplated before any final decisions are made. To that end, the HBA submitted letters (Mayor Jan Kulmann and CBO Greg Wheeler) that highlighted our questions and concerns that we expect to be addressed when the City Council considers this issue this week.

Arvada, Commerce City and Erie Currently Considering New Metropolitan District Requirements

Over the past month, we have seen the municipalities of Arvada, Commerce City and Erie propose significant changes to their model service plans governing metro districts ? some of which could significantly curtail future development at a time when Colorado residents need more housing opportunities.

In response, the HBA of Metro Denver has submitted letters outlining our concerns and the potential consequences to the supply of new homes and prices should these municipalities adopt some of their most arduous proposals. Here are just a few of the concerns the HBA has flagged for reconsideration:

In Arvada, City staff has recommended penalizing developers and builders by denying building permits for metropolitan districts that are not in compliance with service plan requirements. Obviously, this approach unfairly penalizes builders that have purchased lots from a developer and are in the process of building homes and most likely had nothing to do with the perceived violation in question, nor have the means to rectify the situation.

In Commerce City, council members have recommended removing provisions to allow for a mill-levy adjustment if assessments rates either increase or decrease, to ensure property-tax revenue remains consistent and predictable. This is a vital component for metro district financing because if assessment ratios are reduced in the future, as they have the past two legislative sessions, revenue to pay for infrastructure will drop significantly. The uncertainty in the value of a future property tax revenue stream makes it nearly impossible to sell metro district debt to the bond market ? effectively rendering metro districts useless as a financing tool for infrastructure development.

In Erie, the town?s Board of Trustees has recommended imposing mill-levy caps and setting debt term limits so inflexible that it would significantly restrict the ability of developers and builders to bring homes to market without considerably increasing home prices ? pricing thousands of aspiring homeowners out of the market entirely.

All of these issues have culminated over the course of the past year with final decisions likely being made within the next couple of months. The HBA will be working diligently to ensure the most concerning aspects of these proposed ordinances are thoughtfully reconsidered due to their adverse impact on the pocketbooks of middle-income Coloradoans.

Commerce City Metro District Comments Letter.

City of Aurora and Town of Castle Rock to Consider New Water Conservation Measure for New Residential Development

Both the City of Aurora and the Town of Castle Rock are considering water conservation measures for new residential development that would prohibit the use of turf in front yards and significantly reduce the total square footage of turf in backyards that is permissible to just 450 square feet or 45 percent—whichever is less. Although Castle Rock has yet to prepare a formal ordinance, the town has reached out to the HBA to notify active builders of its intentions to impose new restrictions later this year. In Aurora, no such notification was provided, and a draft ordinance has already been introduced before the Water Policy Committee for consideration. In response, the HBA submitted a formal comments letter to the City Council, requesting an opportunity for genuine stakeholder input and engagement.

The Aurora City Council will likely take up this issue within the next month, and the HBA will continue to keep our members updated on this issue in both municipalities as they move forward.

HBA of Metro Denver Issue Tracker
Questions on what is happening in a specific city or county? The HBA is regularly monitoring the council and board activities in every political subdivision in the metro Denver area. Our Issue Tracker offers a great resource to learn about the issues being deliberated with links to agendas, packets and ordinances. The HBA of Metro Denver HBA Issue Tracker is available  to all members here.

All of the HBA of Metro Denver's Regulatory and Technical Committees are meeting regularly – Join today and make your voice heard!

As a volunteer-driven organization, the HBA's Jobsite Safety Committee, Permitting Committee, Regulated Utilities Committee and Stormwater Management Committee help guide the HBA's events and activities throughout the year. Consider joining one — or more — if you want to build strong, long-lasting relationships and make a difference to your fellow HBA members, while sharpening your leadership skills. Please visit the HBA website for more information or reach out to Morgan Cullen if you are ready to participate.