Citing Housing Shortage, Builders Push for Friendlier Laws

The real-estate industry argues laws making it easier for homeowner associations to sue over alleged shoddy construction drive up insurance costs and builders’ expenses

Construction at the Regional Transportation District’s Westminster Station in Metro Detroit in early July 2016. While home prices have risen at a double-digit rate for three years, the head of the Colorado Association of Realtors said builders’ concerns about litigation has limited condo development near train stations. PHOTO: ANDY CROSS/DENVER POST/GETTY IMAGES

By Peter Grant

Updated May 30, 2017 10:11 a.m. ET

In the Denver area, home prices have increased at a double-digit rate for three years and the median price of a single-family home just crossed $400,000, according to Mark Trenka, chairman of the Colorado Association of Realtors and the head of Century 21 Trenka Real Estate in the Denver area.

“I just brought a house out for $300,000 in the suburbs and it took me a whole weekend to sell it,” he said. “We probably could have sold it in an hour.”

Mr. Trenka pointed out that the Denver area has been investing billions of dollars in a rapidly expanding commuter-rail service but there has been very little condo development near train stations because of builder concern about litigation. “It’s a squandered opportunity,” he said.

The new Colorado law also requires that at least half of homeowners agree to a construction defect lawsuit before one can be brought by a homeowners association. A provision that would have required associations to go into mediation instead of court on construction-defect disputes was eliminated as part of a compromise with opponents.

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