September 2021 | Page 31

LEGISLATION

Late Fee Limitations ( SB21-173 )

Customers paying late as a cost to a housing provider . Industrywide , the cost of a customer being more than 3 days late with their rent payment is 8 % of the past due payment . Late fees have been statutorily limited to 5 % and cannot be imposed until 7 days late . By preventing the housing provider from passing full the cost of the delinquent payment on to the defaulting resident , all the other residents who pay their rent on time end up with higher rent to cover this operating loss .

Raising Rent Once Per Year

( HB21-1121 )

Eviction Moratorium ( various Executive and Administrative Orders )

By preventing housing providers from recovering housing units from nonpaying residents , these units were effectively eliminated from the housing market for the full combined length of the various moratoria . Since the beginning of the various government-imposed virus closures ( March 2021 ) eviction filings have been only 38 % of normal . This translates into approximately 23,000 housing units being removed from availability to be rented to those in need of housing . The cost of the reduction in housing units , comes in higher rent for all the rest of us competing for scarce housing .

Rent rates can only be raised once each 12-month period , regardless of the length of the lease contract . This has little effect on rent rates for one-year leases ( since the lease contract prevented a change in rate for one year anyway ). However , there will be increases on all shorter-term rent rates ( 9 months , 6 months , 3 months , one month ) because the housing provider will have to be willing to honor that short-term rate for at least 12 months .

Rental licensing & Inspections

( various , including Denver Council Bill 21-0420 )

A number of localities ( most recently Denver ) have enacted requirements that anyone renting a property pay for a license to do so and pay to have the property inspected . Both these operating costs end up being passed on to the customer in the form of higher rent .

Energy Benchmarking

( HB 21-1286 )

This new law will impose fines on existing large multifamily residential buildings that are not in the lowest energy usage grouping . As originally proposed , 75 % of existing buildings would ’ ve been subject to minimum fines of $ 365,000 per year . Both the fine amount and the number of buildings that will be fined have been deferred to a task force and remain to be seen . But every dollar paid for a perceived lack of energy efficiency will lead to higher rent . This future administrative cost is particularly tragic , because multifamily housing is far more energy-efficient than single-family housing and this cost is only imposed on multifamily units . It is also misguided because housing units that have the highest energy usage have higher occupancy levels ( which tend to be poorer households ).

Right to Counsel ( various , including Boulder Ordinance 8412 )

These laws require housing providers to pay for lawyers to represent their customers when they ’ re in default . In the case of the Boulder initiative , the cost is $ 75 per rental unit ( annually ) and causes higher rent for the non-defaulting customers . Everyone pays higher rent , so that those who can ’ t get a free attorney .

Higher Property Taxes

( Repeal of the Gallager Amendment )

By repealing the Gallagher amendment to the state constitution , residential property tax assessment rates are 7.1 % rather than 6.8 %. This increase in annual property tax is paid by Colorado ’ s renters through higher rents .

Colorado ’ s consistent march towards greater expenses for building and operating housing units translates to higher housing costs . Most of us want our kids to be able to afford to live in Colorado . For that to happen , we must continually remind our elected officials to concentrate on making it less expensive to build housing units and less expensive to loan those housing units to someone .

10-Day Demand ( HB 19-1118 )

For more than 100 years , Colorado housing providers have been required to bring an eviction lawsuit before forcing a resident to move if there was a payment default . Prior to initiating that lawsuit , the housing provider was required to give the 3-day demand for the money due . This law change required a 10-day demand instead , which equates to 7 days more free rent for any resident in default . The cost of this free rent is paid by all other residents ( that are paying on time ) in the form of higher rent .

Upcoming Webinars :

• September 10 , 2021

• October 8 , 2021

• November 5 , 2021

• December 3 , 2021