Capitol Connection – April 23, 2024
Legislative Advocacy This Week at the Capitol
Only 15 days remain until May 8th when the legislative ends, as mandated by our state constitution, yet hundreds of bills remain alive and we still expect more to be introduced. At least one bill yet to be introduced would impact your property taxes. This bill will be separate from the Property Tax Commission who will meet for a final time this Friday, April 26th. We want to acknowledge REALTOR® Sean Dougherty who served countless hours on this Commission to be a voice for property owners.
Bill Updates
Short-Term Rental (STR) bills SB 33 and HB 1299
Good news on both STR bills SB 33 Lodging Property Tax Treatment and HB 1299 Short-Term Rental Unit Property Tax Classification!
Late last Tuesday, SB 33, which would have assessed properties used as Short Term Rentals (STRs) for more than 90 nights at the commercial lodging rate, was defeated in the Senate Finance Committee on a bipartisan 6-1 vote. The only supporter of the bill was the bill sponsor Sen. Hansen.
As we worked with Rep. Shannon Bird, a 2023 REALTOR® Champion, to sponsor HB 1299 to counter SB 33 and protect property owners who may have one or two properties used as an STR, we requested her to kill (technically “postpone indefinitely”) HB 1299 on Monday, which is what transpired. Both STR bills are no more in 2024.
As shared previously in our Legislative Advocacy section, there remains at least one bill yet to be introduced related to property taxes, possibly even before the Property Tax Commission has their final meeting on Friday. Because these STR bills (SB 33, HB 1299) also deal with property taxes, we will have to remain vigilant that any property tax relief bill(s) are not amended to include anything problematic from SB 33 or HB 1299.
(Monitor) HB 1175 Local Governments Rights to Property for Affordable Housing
Sponsors: Rep. Boesenecker, Rep. Sirota, Sen. Winter, Sen. Jaquez Lewis
This bill, also known as Right of First Refusal (ROFR) and Right of First Offer (ROFO), will be heard in the Senate Local Government & Housing Committee on Thursday upon adjournment of the Senate Floor Session. HB1175 gives local governments the right of first refusal to buy current subsidized multifamily or mixed-use residential buildings to continue to use them for affordable housing. It provides local governments the right to offer to purchase a for-sale multifamily or mixed-used residential property with more than 15 units and less than 100 units before the property is listed for sale to other parties. CAR was originally in an amend position on this bill; however, due to amendments that we secured, CAR moved from an amend to a monitor position.
Most notable amendments for CAR shortened the timeframe provisions that the seller and local government must abide by when the local government is exercising either ROFO/ROFR. CAR ensured that the timeframes would fit within the 180 days to preserve 1031 exchanges for mom and pop investors.
(Oppose) HB 1300 Home Sale Wildfire Mitigation Requirements
Sponsors: Rep. Story, Rep. Brown, and Sen. Marchman
HB 1300 was amended in a House Committee back on March 26th to allow any of our 64 counties or hundreds of municipalities to require a wildfire mitigation certification at the point of sale for existing residences. The introduced version mandated a wildfire mitigation certification at the point of sale for existing residences in 12 specific counties.
CAR remains opposed to HB 1300 even if it is permissive for local governments to enact as it still complicates the home buying process at a time of record low inventory, high interest rates, and volatile property insurance markets. Furthermore, achieving a wildfire mitigation certification does not guarantee adequate property insurance coverage or eliminate the possibility of being uninsured. If one property achieves full compliance, but surrounding properties cannot do the same, then property insurance can still be denied due to wildfire risk.
(Oppose) HB 1230 Protections for Real Property Owners
Sponsors: Rep. Parenti, Rep. Bacon, Sen. Winter, Sen. Cutter
HB 1230 will be heard in the Senate for Second Reading tomorrow morning. If this bill passes, it will have a significant negative impact on Colorado’s housing supply. Colorado is already facing a housing shortage, and HB 1230 will exacerbate the housing shortage and cause more construction defect litigation for developers on all property types. This bill would drive developers out of the real estate market in Colorado. There is a proposed amendment that would rewrite the bill from the proponents of the bill, however, the strike below would still significantly increase costs and construction defect claims for developers. The amendment would change the bill to only keep the following provisions from the original bill language.
The bill makes it a violation of the “Colorado Consumer Protection Act” to obtain or attempt to obtain a waiver or limitation that violates current law. This would allow for attorneys to be awarded attorneys’ fees and treble damages.
The bill allows a court to award prejudgment interest on residential property construction claims of 6% from the date the work is finished and then 8% after the property is sold to an occupant. Again, this provision does nothing but drive up costs by incentivizing demands and increased settlements.
This is not an official Call For Action, but please reach out to your State Senator to respectfully request they vote NO on HB1230 and any amendments. Your voice and action can make a difference in this crucial matter.
RPMA
“Don’t Miss Out on the Action – Sign up for REALTOR® Party Mobile Alerts”
Text REALTORS to 30644
REALTOR® Party Mobile Alerts offers REALTOR® Associations and REALTORS® a way to stay connected directly from their cell phone or tablet. When a national or state legislative call for action is launched, subscribers get a short text message containing information to take action. Stay in the “know” as housing legislation heats up at the state capitol and nationally this year.
*If you sign up for RPMA and receive a Call For Action, taking action does NOT subscribe your information to a listserv.* RPMA and CFA are strictly to inform members of legislation that the National Association of REALTORS® or Colorado Association of REALTORS® needs grassroots engagement.
Events
Join us on May 29th for CAR’s Virtual Property Management Forum and gain insights from seasoned professionals in property management.
Hear from Peter Muccio, Senior Associate Attorney with Tschetter Sulzer, as he provides a legal risk management update specifically for property managers. Learn from John Lucero, founder and principal broker at Lucero Development Services, about the intricacies of transforming office buildings into living spaces. Stay up-to-date with legislative issues impacting the industry from Brian Tanner, CAR Vice President of Public Policy.
This forum is valuable for property managers seeking to update their practices and adapt to the evolving market.
NAR / ICYMI
Washington Update – April 2024
Share Facts About NAR’s Settlement
You and your members have questions about what NAR’s settlement agreement means, and many headlines aren’t separating fact from fiction. Here’s the truth. You can get more straight answers at facts.realtor, which includes a toolkit for communicating about the litigation to members and consumers.
NAR Highlights Dire Lack of Housing Affordability and Inventory in Congressional Testimony
Dr. Jessica Lautz, deputy chief economist and vice president of research at the National Association of REALTORS®, testified before the House Committee on Financial Services Subcommittee on Housing and Insurance.
During the hearing, “The Characteristics and Challenges of Today’s Homebuyers,” Lautz shared NAR’s existing-home sales research with members of Congress. She emphasized that in 2023, the annual number of existing-home sales was at the lowest recorded since 1995. While January 2024 shows an increase in home sales, this follows a retraction in the housing market due to limited inventory and an erosion in housing affordability.
Lautz pointed to NAR’s research, confirming that bidding wars for homes are more frequent due to the lack of housing inventory. She outlined research from the association showing that in January 2024, the typical seller received 2.7 offers, and 16% of homes sold were over the list price. Further, she explained that home prices continue to rise because of the lack of inventory, pushing more potential buyers out of the market.
Read the full press release here.
NAR and MBA Urge GSEs and Regulators to Confirm Support for Buyer Financing
The National Association of REALTORS® (NAR) along with the Mortgage Bankers Association (MBA) sent a letter to the Federal Housing Finance Agency, Federal Housing Authority, Fannie Mae, and Freddie Mac seeking confirmation that homebuyers will continue to have access to mortgage credit after the proposed settlement in the Burnett et al and Moehrl et al cases is complete. Specifically, NAR and MBA asked the regulators and GSEs to confirm that the custom of excluding seller’s payment of commissions for buyer’s agents will continue to be excluded from the limits on Interested Party Contributions. This confirmation is a critical piece of the post-settlement puzzle.
This letter continues NAR’s efforts to engage the GSEs and regulators to provide near-term clarity to the market and members. This effort is one of several focused on supporting mortgage finance for buyers in the post-settlement environment.
Read and download the coalition letter here.
NAR Submits Comments to Department of Veterans Affairs on Allowable Fees
The National Association of REALTORS® (NAR) submitted a letter to the Department of Veterans Affairs (VA), urging them to revise its policies pertaining to fees veterans cannot pay when using their VA home loan benefit. Under VA policies, veterans using the home loan benefit are prohibited from compensating their professional representative directly. This puts VA buyers at a disadvantage in situations where offers of compensation are not offered from a seller, potentially forcing them to forego professional representation, choose a different loan product, or exit the market entirely.
NAR wants to ensure veterans maintain their access to the VA home loan program, which has been a significant tool in helping service members achieve the American dream of homeownership. NAR remains committed to working with the department to create solutions for those who served our country.
Read and download NAR’s letter to the VA here.
Community Outreach Grant Funding Extended!
Transform a vacant lot into a vibrant park or gathering spot to boost downtown vitality and foster economic growth. Tackle regulatory hurdles to address housing inventory and affordability. Further fair housing and advocate for smart growth. Community Outreach Grants empower state and local REALTOR® associations to enhance communities, improve affordability and livability. Associations can access grant applications through October 15th or until capacity is reached. Explore success stories, schedule a grant planning meeting or view a recording of Champion Issues with Community Outreach Grants and Webinar for ideas on supporting your association’s initiatives. For inquiries, reach out to Christine Windle.