The HBA Advocate Newsletter | September 3, 2024

By Paige Roemmich | September 4, 2024 |

September 3, 2024

In this edition:

HBA of Metro Denver Hosts 3rd Annual Housing Affordability Bus Tour
Colorado’s Special Session Concludes with Compromise on Property Taxes
Town of Castle Rock to Consider 0.2% Sales Tax Increase for Police and Fire Service
Town of Erie to Consider Inclusionary Zoning Ordinance
Commerce City to Consider Affordable Housing Policy
Brighton to Consider Increases to Local Impact Fees

HBA of Metro Denver Hosts 3rd Annual Housing Affordability Bus Tour

For the third year in a row, the HBA of Metro Denver hosted its Housing Affordability Bus Tour for elected officials interested in learning more about our industry’s commitment to housing attainability.

Over the course of the day, our group traveled by charter bus to several different developments in different stages of construction to learn more about the main impediments to housing affordability. First, we toured Lokal Homes Gateway Community in Denver currently delivering two and three-bedroom condominiums in the mid $300s. Then we headed north to tour Boulder Creek's Urban Cottages at Erie Commons, which is offering affordable single family for rent product close to Erie’s Town Center. Finally, we visited new greenfield locations where Maiker is planning on bringing truly affordable housing units in Brighton and Denver.

By the end of the day, our attendees departed with a good foundational understanding of the major challenges our industry faces when bringing more attainable housing options to market and the innovative solutions builders and developers are implementing to lower costs and improve the quality of life for current and future generations of Coloradans.

We would like to recognize the HBA members who volunteered their time to serve as faculty members for this important event, including Scott Cox, Dave Lemnah, Jeff Handlin, Chase Stillman, David Sinkey, Peter LiFari and Steve Kunshier. We also want to thank Alpine Lumber for sponsoring this year’s BBQ lunch for the attendees.

Colorado's Special Session Concludes with Compromise on Property Taxes

The General Assembly Special Session - called by Governor Polis to address recent property tax spikes and to avert two ballot measures that would have severely impacted local governments - ended last week with the passage of two pieces of legislation that will provide property tax relief for Coloradans. At the same time, Advance Colorado and Colorado Concern began the process to withdraw initiatives 50 and 108 from the November ballot.

Proposition 50 is a proposed constitutional amendment, that if passed, would have capped annual statewide property tax revenue collection at 4 percent. If this limit was exceeded, retention of the excess revenue must be approved by voters via a statewide ballot measure. The HBA learned from bond counsel and underwriters that 50 would upset our ability to procure bonding for metro districts, severely limiting our industry’s ability to finance new housing projects.

We applaud Governor Polis for understanding the risk these measures posed for the production of new housing and his leadership in calling the special session.

The State House introduced 11 measures, and the Senate introduced two measures, with only House Bill 24B-1001 and House Bill 24B-1003 passing. HB24B-1001, which CAHB supported, is considered the “deal” bill that led to the removal of Initiatives 50 and 108. This bill passed both chambers and will be signed into law by Governor Polis once he is assured that 50 and 108 have been officially withdrawn by the proponents.

HB24B-1001 expanded Senate Bill 24-233, which provided a $1.3 billion property tax break, reduced assessment rates for residential and commercial properties, and set a 5.5% annual growth cap for property-tax revenues for local governments like fire districts, school districts and other property-tax funded services. The new legislation includes:

Reducing the property tax growth limit to 5.25% per year for non-school districts (local governments including fire and other special districts). Local governments can have a local vote to be exempt from this limit.
Instituting limits for school districts of 6% per year unless inflation plus enrollment is greater. School districts are allowed to exceed this limit with local voter approval.

Other parts of HB24B-1001 include:

Local government backfill provision included in SB24-233 is extended to cover property tax year 2025 for the decrease in assessed value attributable to this bill.
Modifying the effective date in SB24-233 so that SB24-233 takes effect either on October 1, 2024, if both property tax initiatives are withdrawn, or on the date of the official declaration of the vote if one or both of the initiatives appear on the ballot and no property tax initiative is approved by the voters.
Clarifying that bond and MLO measures on the 2024 ballot will not be impacted by this bill.
Process to allow local jurisdictions to capture potentially lost revenue.

HB24B-1003 also passed and will make the personal property tax exemption permanent for agricultural equipment that is used in any controlled environmental agricultural (CEA). Current law had this exemption expiring in 2027. The bill also included personal property within a greenhouse eligible for the exemption. This bill is also expected to be signed into law.

Town of Castle Rock to Consider 0.2% Sales Tax Increase for Police and Fire Services

Castle Rock Town Council is considering placing on the November 2024 ballot a request to increase sales tax by 0.2% in order to hire 22 police and 18 fire positions by 2029. According to the Town, Castle Rock has been shifting funding away from road maintenance toward hiring police and fire personnel since 2022. Now, resources are plateauing and cannot continue to meet the police and fire department’s staffing needs over the next five years. The proposed sales tax increase would generate approximately $3.75 million annually for police and fire personnel as well as freeing up additional revenue for road maintenance, parks and recreation, and annual funding for arts and culture in Castle Rock.

While this ballot measure would not directly impact the residential-construction industry in Castle Rock, it would help alleviate ongoing revenue challenges within the Town government. As you may be aware, the HBA of Metro Denver worked to defeat a $7 per square foot residential construction tax put forward in 2021 to fund police and fire service in Castle Rock - a proposal that we felt unfairly singled out aspiring homeowners to fund services that are meant to benefit all Town residents. This proposal would help solve this problem in a more equitable manner while ensuring adequate public safety services for the Town’s growing population.

Arapahoe County to Consider deBrucing Measure

Last month, the Arapahoe Board of County Commissioners passed a referred measure asking voters to release the County from TABOR’s tax-limiting constraints, so that the government can retain the money it collects going forward. Known colloquially as deBrucing, the measure would relieve much of the fiscal constraints that have led the County’s chronic budget shortfalls over the past decade that have forced it to defer maintenance on roads and county infrastructure and critical programs like public safety and efforts to combat homelessness in the area.

If passed, the measure will add an additional $74 million in tax revenue annually without increasing tax rates. Funds will be dedicated to improving roads, traffic systems, housing solutions, and public safety, ensuring that the County maintains a high quality of life for businesses and residents. The County has asked the HBA of Metro Denver to support the effort, highlighting the growing need for revenue as the County continues to be a prime area for residential development.

Town of Erie to Consider Inclusionary Zoning Ordinance

This year, the Erie Town Council has shown interest in adopting an inclusionary zoning ordinance to help support affordable housing within the municipality. It remains unclear what the final ordinance will ultimately look like, but the initial staff recommendation being put forward is a 15% onsite affordable requirement at 120% AMI (including a quarter of those at 100% AMI) for for-sale product and a 15% onsite affordable requirement for rental units at 80% AMI (including a quarter of those at 60% AMI) for for-rent product going forward. The HBA of Metro Denver has already expressed its concerns about this policy through a formal letter to Council and a meeting with Town staff earlier this summer. While the HBA of Metro Denver does not support IHOs from a policy perspective, we have outlined a series of policy changes that we would like to see if the Council decides to move forward with the ordinance.

Further, to help with the added costs inclusionary housing requirements have on home building (and ultimately passed onto to aspiring homeowners), the HBA of Metro Denver requested that Erie explore and adopt appropriate incentives and offsets. HBA staff will continue to keep our board apprised of this issue going forward, especially once a draft ordinance becomes available for review. A copy of the HBA of Metro Denver’s letter to Erie Town Council is available for your review here.

Commerce City to Consider Affordable Housing Policy

At an August 19 study session, Commerce City staff presented a series of slides on affordable housing to City Council. The presentation provided an overview of general information like the average cost of a home in the City along with demographic information on how affordability is impacting residents. The study also included a number of ways the City could potentially leverage Prop 123 to assist with affordability. Finally, the presentation included a staff recommendation to pursue an inclusionary zoning ordinance with a 15% onsite affordable housing requirement at 80% AMI. Staff never indicated their intention of pursuing this policy previously, nor did they ever let the HBA of Metro Denver know about this presentation prior to their meeting with Council last week - despite several opportunities to do so. The HBA of Metro Denver will keep you updated on this issue as we continue to gather more information.

Brighton to Consider Increases to Local Impact Fees

The City of Brighton is considering a significant increase in impact fees over the next two years, increasing fees by nearly double over the next 24 months. If adopted in their entirety, the fees for single-family dwelling units will go from $6,342 today to $8,573 in 2025 and all the way to $11,041 in 2026. Multi-family residential will increase from $6,342 today to $7,845 in 2025 and all the way to $9,542 in 2026. These are significant increases that our active builders in Brighton need to be aware of and begin planning for today. The HBA of Metro Denver submitted a letter to Council last spring, but it appears the City is still planning to move forward. We will be providing additional input to the Council and plan to share our concerns in person through direct outreach and public testimony.

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.

HBA is looking for Members to Participate in Advocacy, Regulatory and Technical Committees in 2025

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.