Ban on Local Anti-Growth Restrictions Passed by Colorado State Legislature

The Colorado state legislature recently approved a bill that would prohibit “governmental entities” from enforcing existing or enacting new local anti-growth laws that would limit housing supply, development applications or building permits within a locality. House Bill 23-1255 (HB 1255) passed the legislature on May 4 and currently waits on Gov. Jared Polis’s desk for his signature.

Sponsors and proponents of HB 1255 argue that growth caps hinder affordable housing by decreasing the supply of housing in the market, increasing demand and thereby increasing prices and market rental rates. HB 23-155 states that “anti-growth laws do irreparable economic harm to working class Coloradans by limiting the housing supply and driving up housing prices and rents” and “threaten the livelihood of Coloradans employed in construction and other building trades as well as businesses across the state that rely on the commerce associated with home building.”

Opponents of HB 1255 claim that growth limits help municipalities preserve local character and stay within the limits of their infrastructure. Some also claim that the bill favors deep-pocket developers and special interests over affordable housing.

The legislation’s ban on growth restrictions would apply to counties, cities, special districts, municipalities and all other forms of local government, with several exceptions. A governmental entity could temporarily limit growth for up to 24 months within a five-year period after a disaster emergency is declared, to develop or amend land use plans or land use laws covering residential development or the residential component of a mixed-use development, or for the extension or acquisition of public infrastructure, public services or water resources.

Golden, Boulder and Lakewood have each enacted growth restrictions that limit new housing development that will be superseded by HB 1255. Golden only allows its housing stock to expand by 1% per year, which equates to a maximum of 88 new units in 2023. Similarly, Boulder has a 1% annual limit, which results in an allowance of about 400 new units per year.

In Lakewood, a voter-approved growth measure restricts the growth of new residential units within the city to 1% of the existing housing stock per year, which results in the allowance of about approximately 600 to 700 new units annually. Lakewood’s anti-growth law exempts blighted property and the replacement of existing units and also allows the city to set aside a portion of the units allowed under the cap each year for affordable housing.

It remains to be seen whether there will be legal action challenging the bill regarding the state’s authority to preempt local law. If such a suit is brought, the outcome is likely to turn on a court’s determination of whether anti-growth laws are a matter of local, state or mixed concern.

This document is intended to provide you with general information regarding HB 23-1255 in Colorado. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.