First, thank you to everyone who reads my blogs and has contacted your legislatures and various associations to ensure that the real estate industry is being heard at the Colorado Capital. Many of the original proposed bills have been greatly altered or eliminated as a result. There were still some big bills with major impacts on the real estate industry. Why was carpet such a hot topic in this legislative session? Did Colorado Vote to ban security deposits and implement rent control? What passed this legislative session in Colorado and what does this mean for you and the real estate industry?
Below, I’ve gone through the bills that passed and the ones that didn’t this Colorado legislative session. Note, we are just at the beginning of the huge changes in Colorado with a huge shift left as we can see with the bills that were proposed. Even though a bill might not have passed this session, you can rest assured it will more than likely come back in another form in subsequent sessions.
What bills Passed the Colorado legislature that will impact real estate?
Construction Defects and Middle Market Housing: The Colorado Legislature has passed a new law to limit lawsuits against builders in order to incentivize builders to increase supply of affordable housing. Will the new law help or hurt the market. Gov. Jared Polis, a Democrat, cheered the bill at a news conference Wednesday as a proposal that “balances homeowner protections, de-risks the market and allows more condos to be built and sold.”
Although the law was greeted with great fanfare that it will radically increase affordable housing throughout Colorado, the reality is far different. The law is so onerous that builders will continue to focus on the higher end more profitable segment along with the very low income builds that are government subsidized. Ironically, how the law is written today, this bill will likely further strain any affordable housing projects that are not government subsidized.
Tenant Security Deposits: This bill was radically altered from its original form that would have prohibited the collection of security deposits from tenants. The passed bill is much narrower focusing on the return of security deposits but still has big impacts on landlords. Here is one section on refunding of security deposits:
A landlord does not have actual cause to retain any amount from a security deposit for the replacement of carpet or painting unless there is substantial and irreparable damage that exceeds normal wear and tear and did not preexist the tenancy. If a landlord has actual cause, the landlord may retain only the minimum amount necessary to replace the carpet or to repaint in the area that is damaged. A landlord may not deem carpet substantially and irreparably damaged if it has not been replaced with new carpet within the 5 10 years preceding the termination of the lease or surrender of the premises. The bill takes effect January 1, 2026.
Long and short, with the focus on carpet, I would advise any rental properties to use laminate or other hard surface to eliminate the discussion over carpet
Ban on rent setting software: It is a very slippery slope to start targeting companies relying on AI models for pricing. Every major company from ski resorts to Disneyworld use pricing models to determine the optimum prices. Think of Airlines, who are one of the early adopters of demand-based pricing. During the holidays flights cost more, every airline is using a model that looks at demand along with competitor prices to determine the optimal price. For example, on a hot route like Atlanta to Denver there is more competition, and pricing will be less than on a flight from Atlanta to Aspen where there is considerably less competition and huge demand. This is basic business decision making using the best data available. Furthermore, it is disappointing that the Colorado Legislature is wasting so much time and resources trying to pin housing inflation on pricing models as opposed to actually working to mitigate the real drivers of housing inflation. I have not seen a single proposal out of the Colorado statehouse or major cities like Denver that would lower the cost of building, ironically all their proposals are doing the opposite making it more and more difficult to build cost efficient rental units. Note although this passed the legislature, Governor Polis just vetoed this legislation .
What bills failed in the Colorado Legislature that impact real estate?
Statewide Rent Control/Jury Trials: Under the proposed bill any tenant can now request a trial by jury and no consideration has to be given if they are deemed to not have substantial funds. In essence, someone getting evicted doesn’t have money to pay their bills and therefore will use a trial by jury to indefinitely delay an eviction. The time to evict could now be basically into perpetuity as jury trials for evictions will now compete with criminal trials, other civil trials, etc… Furthermore the costs for an eviction will be huge with a jury trial for each and every non payment. This is one of the most substantial bills with the biggest impact on property owners. Fortunately this bill did not pass the legislature this session.
Summary of Colorado 2025 legislative session
This legislative session continued the focus on housing. The legislature and government continue to think that the only way to help the housing market is to create more laws. Unfortunately, the inverse is happening as Colorado becomes more closely aligned with California. As we can see in California, the increased legislation has exacerbated the housing crisis as we are now experiencing in Colorado.
Ironically all the bills above that passed and the proposed bills that failed will deter long term investment of affordable units in Colorado. Colorado has now become a much more expensive market than almost every other market in the country which will ultimately lead to considerably less investment, especially in the Denver metro area. Ultimately this will lead to higher rent prices and reduced supply.
Using increased legislation to try to help the housing market is backfiring in Colorado and will continue to create longer-term issues. Unfortunately our legislature is all in on the strategy as they believe somehow, they can defy economics with more legislation.
The good news is that if you own multifamily property, rents will ultimately increase over the next 5 years as supply dwindles, and everyone is forced to raise prices due to the various new laws like having the state dictate when you replace the carpet.
Additional Reading/Resources:
https://coloradohardmoney.com/new-construction-law-in-co-will-it-help-or-hurt/
https://coloradohardmoney.com/colorado-eliminates-security-deposits/
https://leg.colorado.gov/bills/hb25-1249
We are a Colorado Private/ Hard Money Lender funding in cash!
If you were forwarded this message, please subscribe to our newsletter
I need your help as my goal in writing these articles is to provide the best information/insight on Colorado Real Estate that you cannot get anywhere else! Please like and share my articles on linked in, twitter, facebook, and other social media and forward to your friends/associates I would greatly appreciate it.
Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. He is the owner of Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
Glen resides in Colorado, lends in Colorado, owns property in Colorado, and services loans in Colorado which provides a unique real estate prospective of what is actually happening on the ground both in Denver and throughout Colorado. My goal of this real estate blog is to provide an honest assessment of what I see happening in Colorado real estate and how it will impact real estate owners, buyers, realtors, mortgage professionals, etc…
Fairview is the recognized leader in Colorado Hard Money and Colorado private lending focusing on residential investment properties and commercial properties both in Denver and throughout the state. We are the Colorado experts having closed thousands of loans throughout the Front range, Western slope, resort communities, and everywhere in between. We also live, work, and play in the mountains throughout Colorado and understand the intricacies of each market.
When you call you will speak directly to the decision makers and get an honest answer quickly. We are recognized in the industry as the leader in Colorado hard money lending with no upfront fees or any other games. Learn more about Hard Money Lending through our free Hard Money Guide. To get started on a loan all we need is our simple one page application (no upfront fees or other games)
Tags: Denver hard money, Denver Colorado hard money lender, Colorado hard money, Colorado private lender, Denver private lender, Colorado ski lender, Colorado real estate trends, Colorado real estate prices, Private real estate loans, Hard money loans, Private real estate mortgage, Hard money mortgage lender, Hard money mortgage lender, residential hard money loans, commercial hard money loans, private mortgage lender, Hard Money Lender, Private lender, private real estate lender, residential hard money lender, commercial hard money lender, No doc real estate lender