Lawmakers are considering a bill this year that would give local governments more leeway in requiring private developers to build affordable housing, though critics say the proposal is merely a back-door to controlling rents.

The author of House Bill 1017, Rep. Daniel Kagan, D-Denver, said his aim is fix two problems: lack of affordable housing in the state and the inability of local government to require developers to set aside lower-priced units as part of their larger projects.

He said imposing limits on rents is not his intent. Rather, the bill would clarify that nothing in the state’s rent-control laws restrict property owners from voluntarily entering into an agreement that controls rent.

“It will not be rent control — that’s illegal in the state of Colorado — and it never will be rent control,” Kagan said. “This bill has just been misunderstood and misinterpreted.”

Nancy Burke of the Colorado Apartment Association doesn’t see it that way.

“It puts pressure on landlords to agree to affordable housing — even if they don’t want to,” she said. “It’s a back-door to rent control; it’s definitely the start of that.”

- Advertisement -

Two years ago, a bill that would have allowed city and county governments to impose rent controls on private residential property stalled in the legislature amid concerns it would discourage construction of needed new housing.

Kagan said opponents are mischaracterizing his bill.

“I say they misunderstand,” he said. “Because I’d hate to think they were deliberately misleading people.”

Burke is unswayed.

“It will allow them (government bodies) to withhold the permits unless and until they (developers) agree to affordable housing provisions,” she said.

“We’re not against affordable housing,” she added. “But we are against the government assessing rents for landlords, and this bill opens the door to that. This is how it starts.”

Governments, Kagan points out, already are able to withhold permits as they negotiate a number of items when new, large developments are moving through the planning process.

“Density, parking, provisions for schools, roads — all kinds of things (are negotiated),” he said. “And affordable housing hasn’t been a part of that discussion since 2000.”

That’s when the state Supreme Court determined weighed in on the issue, ruling local governments in Colorado cannot set rents in privately owned projects and that deed restrictions on the property are an illegal form of rent control.

Although acknowledging a persistent shortage of low-income units in Colorado Springs, housing authority chief Gene Montoya said the bill seemed pointless to him.

He said plenty of incentives exist to entice developers to build affordable housing units.

“There are state, federal tax credits,” he said. “Developers can even get some money up front, so we really don’t need this bill.”

But Bob Holmes, executive director of Homeward Pikes Peak, which provides housing for the homeless and those threatened with homelessness, said the legislation could help meet the demand for more affordable housing.

“Colorado Springs has one of the lowest levels of new affordable housing in the state of Colorado,” he said. “This is definitely an interesting way to address that.”

But he also sees the other side.

“What if the government has a really good negotiator? Then they could beat down the developer and make him do more than he wanted to,” he said. “And that would take away the incentive to develop the property in the first place.”

Once popular, rent-control statutes were largely watered down in the face of landlord opposition in the 1980s, although they remain in effect in some larger cities.

Affordable housing is a nationwide problem. Habitat for Humanity estimates that for every 100 low-income families, only 76 affordable-housing units exist. About 11 million Americans need affordable housing, and federal help is available only to 4.1 million of them, the nonprofit organization said.

Kagan said he is confident the bill will pass the Democratic-controlled legislature. The bill passed the state House last week and is now before a Senate committee.