HB 23-1115: Proposal to Eliminate Rent Control Prohibition Gains Traction
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HB 23-1115: Proposal to Eliminate Rent Control Prohibition Gains Traction

Brownstein Client Alert, Jan. 27, 2023

On Monday, Jan. 23, 2023, 24 Democrats in the Colorado state legislature introduced House Bill 23-1115 that, if passed into law, would eliminate the state’s statutory prohibition on rent control. Newly elected Reps. Javier Mabrey (D-Denver, Jefferson) and Elizabeth Velasco (D-Garfield, Eagle, Pitkin) are the prime bill sponsors in the House. They are joined on the bill by prime bill sponsor Sen. Robert Rodriguez (D-Denver), who chairs the Senate Business, Labor, and Technology Committee.

What Would HB 23-1115 Do?

Under current state law, local governments are prohibited from passing ordinances or resolutions that limit or restrict the amount of rent charged to tenants to lease privately owned housing. If HB 23-1115 passes, local governments will have the authority to implement rent control within their jurisdictions. 

In 1981, Colorado lawmakers banned passage of local rent control ordinances—effectively leaving determination of rent to the private market. Colorado is one of approximately 32 states that prohibit local rent control measures. The state’s anti-rent control policy sits in notable contrast to the policies of cities such as New York City, Los Angeles and San Francisco, where rents charged in certain privately owned buildings are required to comply with local rules regulating rental amounts and annual rental increases.

Here, HB 23-1115 would strike a provision of Colorado Revised Statutes Section 38-12-301, which provides in relevant part that “…no county or municipality may enact any ordinance or resolution that would control rent on either private residential property or a private residential housing unit.” Nothing in Colorado law prevents local governments from managing and controlling residential property that they have a pecuniary interest in—for example, a local housing authority or similar agency. Nor does Colorado law prevent local governments from enacting inclusionary zoning, as the City and County of Denver has under the authority given to local governments through HB 21-1117. But HB 23-1115 breaks entirely new ground and opens the door to a rent control free-for-all across the state.

How HB 21-1117 Relaxed the Prohibition on Rent Control

As indicated above, lawmakers pushed back on the state’s 1981 rent control prohibition during the 2021 legislative session as a way to address affordable housing concerns. HB 21-1117 authorized local governments to require construction of affordable housing within their boundaries without violating the state’s rent control prohibition, so long as the local rule provides a choice of options to developers and creates one or more alternatives to building onsite affordable housing. Unlike the middle ground found by HB 21-1117, HB 23-1115 eliminates any obligation on the part of a local government to provide developers with alternatives to building onsite affordable housing. Instead, it wholly abrogates Town of Telluride v. Lot Thirty-Four Venture LLC, 3 P.3d 30 (Colo. 2000) and allows for rent control without any checks or balances.

If HB 23-1115 passes, there will be some confusion as to the impact on local governments that have enacted inclusionary zoning rules pursuant to HB 21-1117. For example, will Denver continue its Expanding Housing Affordability policy, which it adopted in June 2022? Like Denver, other Colorado local governments are currently considering adopting inclusionary zoning rules that comply with HB 21-1117. Although passage of HB 23-1115 would greatly simplify local governments’ policy considerations, whether rent control will result in more affordable housing remains hotly debated. 

Democrats Trifecta Control

After the 2022 elections, Democrats increased their majorities in both chambers of the state legislature. They now enjoy a 46-19 supermajority in the state house and a 23-12 advantage in the state senate, just one seat short of a veto-proof majority. That one seat may prove pivotal because, in the past, Gov. Jared Polis has not been in favor of repealing the state’s statutory prohibition on rent control. In a statement earlier this week, Gov. Polis’s office said he is “skeptical that rent control will create more housing stock, and locations with these policies often have the unintended consequences of higher rent.”

However, he has been clear that increasing the amount of available affordable housing is his administration’s primary objective for this term.

Brownstein is monitoring the status of House Bill 23-1115, including its first hearing before the House Transportation, Housing, and Local Government committee on Feb. 15, 2023. Please contact Blair Lichtenfels and Sarah Mercer with any questions. 

This document is intended to provide you with general information regarding Colorado House Bill 23-1115. 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.

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