Barbara Koelzer, Regional Government Affairs Director
Council Changes Direction on STRs: During a discussion on short-term rentals (STRs) Mayor Bagley and Councilmember Tim Waters said they regretted their July votes to prohibit owners of investment properties from renting homes as STRs. Mayor Bagley said prohibiting owners from renting their properties was interfering with peoples’ property rights. Waters agreed, calling the decision “using a sledgehammer to kill a fly.”
The discussion came up as the staff presented recommendations to revise the City’s STR regulations in order to make the current rules more enforceable and to deal with complaints the City had received about several nuisance STRs from neighbors. Assistant City Manager Joni Marsh told the Council there are currently 94 licensed STRs in Longmont. Eight of them are investment homes.
The Council voted to separate the STR revisions into two ordinances. One will address what is allowed, and the other will deal with enforcement. Then Councilman Waters moved an ordinance to specifically allow investment properties to be used as STRs. Councilmembers Aren Rodriguez and Susie Hildalgo-Fahring also changed their minds on the issue and joined Brian Bagley, Tim Waters and Marcia Martin to support Water’s motion, which passed 5-2 with Councilmembers Christensen and Peck opposed.
Polly Christensen was frustrated; she had pushed hard for the prohibition on the use of investment properties as STRs in July. Tuesday night she said, “The issue is that we need to make sure people who live in Longmont can afford to live here. Now Council members have changed their minds. We voted on this 5 months ago. This is frustrating.” The ordinances discussed on November 17 will come before Council sometime in the near future.
Council Approves CostCo/Affordable Housing Deal: The City Council unanimously approved three ordinances to approve a complicated Public Private Partnership Agreement (P3) deal with Diamond G Concrete and Costco. CostCo will build a new retail warehouse on land currently owned by Diamond G in the Harvest Junction area. Staff described the CostCo warehouse as a “significant economic development opportunity for Longmont community members to enjoy a diversification of retail opportunities locally as well as stemming the leakage of sales tax dollars from the City.”
As part of the deal, the City will acquire nine acres of the property for affordable housing. The total hard dollar cost to the City of this overall development is estimated at $12,530,953. Of that amount, $9,605,431 is the cost to the City to essentially incentivize Costco to locate in Longmont. The balance of $2,925,522 is the costs related to the affordable housing aspect of the development.
Of the total $12,530,953 of hard cost to the City, $1,470,150 will ultimately be funded from the Affordable Housing Fund to buy the Affordable Housing Property. The balance of the City cost will ultimately be funded through sales tax to be generated from the Costco Project. That includes $1,397,847 of site improvements and $57,525 of fees related to the affordable housing property.
Costco will likely not open to the public until 2024. The details of the affordable housing component were not discussed.
COLORADO ASSOCIATION OF REALTORS®
2021 Legislative Preview: Recently Liz Peetz, CAR’s Vice-President for Public Policy, provided a preview of the 2021 session for members of several local associations. She said it could be a difficult session for real estate because one party has a majority in both the House and the Senate, making it easy for them to pass bills without much compromise.
Liz said some of the topics will be familiar, such as HOA transparency and rent control, having been the subject of bills in previous sessions. Other topics we are likely to see include funding wildfire mitigation, inclusionary housing, greenhouse gas reduction/electrification, special and metro district transparency and long-term proposals to revise the Gallagher Amendment (property taxes).
CAR, working with a coalition that includes Habitat for Humanity, intends to introduce four bills focused on equitable access and racial justice issues to celebrate CAR’s 100th anniversary. The bills will focus on financial literacy for high school students, using rent to build credit, utilizing revenues from Proposition EE to provide grants for local governments to incentivize affordable housing and a reporting requirement for the Department of Local Affairs to list how federal homeownership grants were spent.
State Explains Red COVID Dial Rules: The State just provided a more detailed explanation of the requirements for real estate providers during the new Red COVID phase. CAR was especially pleased that the Division of Real Estate defined what a real estate transaction is.
CAR Attorney Scott Peterson posted a new Legal Bites video that succinctly reviews the requirements. That video is available here: https://www.youtube.com/user/ColoradoRealtors
Read the Division of Real Estate’s FAQs, including the definition of a transaction: https://docs.google.com/document/d/19…
To the best of our knowledge, Boulder, Broomfield, Larimer and Weld counties will adhere to the State requirements without creating any additional local restrictions. As always, your local association is your primary source for information on real estate-related COVID regulations.
Housing Issues on Agenda for Legislative Special Session: Governor Polis called a special session to focus on COVID relief after Thanksgiving. Housing was one of the priorities for stimulus spending.
One of the 10 bills passed, Senate Bill 20B-002 “Housing and Direct COVID Emergency Assistance” provides tenant and landlord relief. The bill transfers a total of $60 million to cash funds supporting housing assistance programs, including $1 million in legal eviction aid. In addition, it creates the Emergency Direct Assistance Grant Program in the Division of Housing in the Department of Local Affairs (DOLA). The program will provide grants to individuals who experience financial need due to the COVID-19 pandemic and who may not be eligible for other types of assistance.
HB20B-1006, “Insurance Premium Tax Payments and Credits” allows affordable housing investors to use affordable housing tax credits against premium tax payments to off-set Colorado state income tax or insurance premium liability. Prior to this legislation, state law only allowed the credits to be applied on an annual basis which prevented companies from obtaining a refund from overpayments. These changes provide additional incentive to invest in the development and preservation of affordable rental housing across the state.
New Oil and Gas Drilling Rules: the Colorado Oil and Gas Commission (COGCC) recently published new drilling rules that go into effect on January 15, 2021. The most important thing for Realtors® to know is that new wells will require a 2,000-foot setback from homes and schools. Some local governments are already moving to implement the same setback requirement.
Will the new setbacks limit producers’ ability to drill? And if so, how will that affect oil and gas revenues, which are so important to Colorado? We will soon find out.
Front Range Rail Project Pushes Ahead: The Front Range Passenger Rail Project (FRPR), initially funded by the legislature, is moving forward even though the project is estimated to cost between $1.5 and $2.5 billion to roll out a “modest” first phase. On December 4, Director Randy Brauberger told FRPR’s commission the first phase would include two to six round trips a day between Fort Collins and Colorado Springs on trains traveling an average of 45 miles per hour on existing freight rail tracks.
Ultimately the FRPR vision includes line from Cheyenne, Wyoming to Trinidad. Speeds would top out at 90 to 110 miles per hour on newly laid track. Trains would run every 30 minutes at peak times, and it all could cost between $7.8 billion to $14.2 billion.
How could Colorado pay for this project? According to Colorado Public Radio, Amtrak is interested in investing in the rail line. Another option is a new tax district that would cover the Front Range. That would require legislative action and a vote of the district’s members.
It is also possible RTD could be interested in collaborating in order to complete a long-promised extension of the B Line through Boulder and Longmont. But considering that cost estimates for a full build-out of the B Line are $1.5 billion to $1.7 billion, which have pushed the expected completion date to 2050, and RTD’s current financial woes, its ability to partner on the project are limited at best.
Learn more about FRPR here: https://www.codot.gov/about/southwest-chief-commission-front-range-passenger-rail/news/vision
New COVID Relief Legislation Coming: NAR lobbyists say Congress is making progress with a proposed $908 billion COVID relief bill. While all the details aren’t available yet, NAR says the package will include $160 billion for state and local governments, $180 billion for additional unemployment insurance, $288 billion to extend the PPP program and $25 billion in rental assistance.
NAR to Feds – Delay Actions on GSEs: Recently NAR sent a letter to the Treasury and Federal Housing Finance Agency asking them to refrain from any rushed actions to end the conservatorship of Fannie Mae and Freddie Mac. These two entities currently finance the majority of single-family mortgages and are critical not just to supporting housing during the pandemic, but also for the future of homeownership. A rushed exit from conservatorship could jeopardize reforms that have been made to-date and reforms that remain undone.
2021 FHA Loan Limits: On Wednesday, December 2, 2020, the Federal Housing Administration (FHA) announced increases to the FHA Single Family loan limits for 2021. In high-cost areas of the country, FHA’s loan limit ceiling will increase to $822,375 from $765,600. FHA will also increase its floor to $356,362 from $331,760. The maximum loan limits for FHA forward mortgages will rise in 3,108 counties. In 125 counties, FHA’s loan limits will remain unchanged. These limits go into effect on Jan 1, 2021.
FHA Single-Family Loan Limits in Northern Colorado –
Boulder MSA $644,00
Fort Collins-Loveland MSA $454,250
Greeley MSA $404,800H
Search for HUD FHA Mortgage Loan Limits here by MSA:
New NAR Anti-Trust Lawsuit: Inman reported that the U.S. Department of Justice has filed an antitrust lawsuit against the National Association of Realtors alleging NAR’s rules are illegal restraints on Realtor competition, the DOJ announced Thursday.
The federal agency filed a settlement at the same time as it filed the suit requiring NAR to repeal or change several of its rules, which the DOJ deems anticompetitive. According to the DOJ’s 13-page complaint, these include:
- prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn if a buyer purchases a home listed on a multiple listing service;
- allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free;
- enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered and to exclude homes with lower commissions from consideration by potential homebuyers; and
- limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS.
NAR has not communicated with its member about the lawsuit. However, Mantil Williams Vice-President of Public Relations and Communication Strategy at NAR told Housingwire.com, “In response to questions from the U.S. Department of Justice, we have been working to explain our rules. We have reached an agreement that fully resolves the questions raised by the DOJ about the MLS system and commissions.” Williams added, “we have agreed to make certain changes to the Code of Ethics and MLS Policies while we remain focused on supporting our members as they preserve, protect and advance the American dream of homeownership.”
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