After stunning defeats last year, the Colorado governor and legislature have broken apart the large bill into smaller parts that have each passed. Two new land use bills passed that take away local government control and hand it to the state of Colorado. The new bills allow ADUs on any property regardless of local rules and mandates density in front range cities.
The two primary land use bills that passed are regarding accessory dwelling units along with zoning density throughout the front range. In essence the state of Colorado is mandating zoning changes throughout the front range regardless of the local zoning codes/ordinances. Just like the moose above in my backyard, taking whatever he wants because he can, the state is bullying local jurisdictions that have historically handled land use based on the needs of their communities.
Accessory Dwelling units mandated throughout the front range:
The bill requires a subject jurisdiction to allow, subject to an administrative approval process, one accessory dwelling unit as an accessory use to a single-unit detached dwelling in any part of the subject jurisdiction where the subject jurisdiction allows single-unit detached dwellings. The bill also prohibits subject jurisdictions from enacting or enforcing certain local laws that would restrict the construction or conversion of an accessory dwelling unit.
- A municipality that has a population of 1,000 or more and that is within the area of a metropolitan planning organization; or
- The portion of a county that is both within a census designated place with a population of ten thousand or more, as reported in the most recent decennial census, and within the area of a metropolitan planning organization.
There is a thought that ADU’s are going to be the silver bullet to Denver’s housing problem. Unfortunately this is a huge stretch that it will even make a dent. The law only applies to owner occupied units. Does the government really think that a 4m house in Cherry creek is going to build an ADU in order to make a few extra bucks renting it? No, you will see in the more expensive areas that homeowners build another structure for a family member or as a guest house. On the opposite end of the spectrum, someone living in a 250k house will likely be hard pressed to finance the construction of a 75k ADU in order to have extra rental income.
Long and short, the ADU rule will do little if anything to move the needle on affordable housing regardless of what the legislature is promising.
Mandated Housing in Transit Oriented Communities
The state of Colorado mandating zoning in cities is a whole new ballgame. The new law is very onerous for local governments.
A housing opportunity goal is a zoning capacity goal determined based on an average zoned housing density and the amount of transit-related areas within a transit-oriented community. The bill requires a transit-oriented community to meet its housing opportunity goal by ensuring that enough areas in the transit-oriented community qualify as transit centers. In order to qualify as a transit center, an area must:
- Be composed of zoning districts that uniformly allow a net housing density of at least 15 units per acre;
- Identify the net housing density allowed by law;
- Meet a housing density established by the transit-oriented community;
- Not include any area where local law exclusively restricts housing occupancy based on age or other factors;
- Have an administrative approval process for multifamily residential property development on parcels that are 5 acres or less in size;
- Be composed of contiguous parcels, if located partially outside of a transit area; and
- Be located wholly within a transit area and not extend more than one-quarter mile from the edge of a transit area, unless the department allows otherwise.
A transit-oriented community is required to demonstrate that it has met its housing opportunity goal by submitting a housing opportunity goal report to the department of local affairs (department).
Summary
The state of Colorado getting into statewide zoning is a slippery slope that will end very poorly for residents. Local governments that are elected by local residents have shaped development in cities throughout the country for hundreds of years. The two recently passed bills upend that tradition and will end very badly.
Let’s take for example a city like Breckenridge that has a local transit system. The state down the road could come in and say that we want to add 5k more units around a transit development regardless of whether locals want it or not or if the town can support the proposed development or not. Another example is a recent defeat of a high density affordable housing development in Steamboat that was shelved as a result of a citizens petition. Under the new paradigm established by these two bills, the State could dictate the approval of development in certain areas regardless of what citizens want. This is extremely bad precedent to have state officials dictating local land use especially in Colorado where the front range has very different political and economic motivations than other cities.
Long and short, we are just halfway up the mountain on land use discussions and these two laws are setting a dangerous precedent that will have huge consequences for cities throughout the front range especially for rural resort communities and smaller towns/cities.
Additional Reading/Resources
- https://leg.colorado.gov/bills/hb24-1152
- https://leg.colorado.gov/bills/hb24-1313
- https://coloradohardmoney.com/big-changes-in-colorado-ski-real-estate/
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Written by Glen Weinberg, Owner 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 from this 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…
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