Government Affairs Update

May 2018

Barbara Koelzer, Regional Government Affairs Director








Boulder County
Council Votes to Increase Linkage Fee: The Boulder City Council is poised to increase the City’s commercial linkage fee from $12 a square foot to $30 a square foot pending a second vote on the ordinance on May 1. The affordable housing commercial linkage fee is charged on new non-residential development to mitigate the impact of new development on the need for additional affordable housing.

Prior to the vote on April 17, staff listed some of the possible negative impacts that could result from increasing the linkage fee. It was explained the increase would increase the overall cost of nonresidential development and cause some employers to leave Boulder, and lead developers to delay or abandon future commercial projects. Staff noted they would consider lowering revenue projections for construction and business use tax for 2019 and beyond. However, these cautions did not deter the majority on Council. As Mary Young said, “Four of us that are up here now campaigned very strongly on linkage fee increases, so I think the election speaks for itself.”

The three Council members who opposed the ordinance, Bob Yates, Jill Grano and Aaron Brockett, argued the increase would have negative consequences and wouldn’t solve the need for more affordable housing. They agreed with staff and a consultant who said the increase was too high but were overruled by the majority.

This decision is interesting in light of the fact that Boulder’s sales tax revenues have not met budget projections and the City is considering service cuts. The City Manager will now have to figure out how to cut this year’s budget by $4 million and the trend is not expected to improve in coming years. The City Council’s decision to more than double commercial linkage fees is unlikely to encourage new businesses to locate in Boulder and could cause existing ones to leave, exacerbating a trend that is already causing problems in Boulder’s economy.

Housing a Concern for Employers: Longmont Economic Development Partnership recently surveyed primary employers and found access to workforce housing is a growing concern. 44 percent of employers view a lack of workforce housing as an issue in recruiting and retaining employees. 52 percent have employees who have expressed concerns regarding a lack of affordable housing in Longmont.

Predictably, only about 14 percent of employers support the concept of a commercial linkage fee, but 35 percent of employers support inclusionary housing and dedicating general fund dollars to affordable housing as policies that address workforce housing issues. However, it could be argued that support for these policies would decrease if employers understood that the City is not targeting workforce housing with inclusionary housing or a dedicated revenue stream for affordable housing. According to the survey results, 40 percent of the workforce lives in Longmont, with a majority of employees living elsewhere.

City Studying Transportation Along Hover and Ken Pratt: In December 2017, the City kicked off the Southwest Longmont Operations Study to address future demands on Longmont’s multimodal transportation system in the southwest part of the City. This study examines the roadway network formed by Ken Pratt Boulevard, Hover Street, and Nelson Road, including major intersections along these corridors.

Several of the City’s major transportation improvement projects in the next five to ten years are located within the southwest part of Longmont. The Southwest Longmont Operations Study builds on the previous planning efforts by focusing the study area and completing a more detailed analysis of the City’s short-term and future transportation system demands in the southwest part of the City.

The City has hired Short Elliott Hendrickson, Inc. (SEH) to complete the study and develop recommendations for future improvements. The consultant is tasked with identifying needed intersection and transportation system improvements, including pedestrian, bicycle and transit improvements and determining the most cost effective, beneficial improvements to the City’s transportation system.

This area sees some of the highest traffic counts in Longmont. For example, the intersection of Hover and SH 119 current has average daily traffic volumes between 25,000 to 30,000 resulting in long wait times at that intersection. However, by 2040 the volume will increase to 30,000 to 38,000 which is a failing service level.

Transportation Advocacy Group Seeks Funding: Commuting Solutions, a service organization that advocates for multi-modal improvements and funding in Boulder and Broomfield counties, has kicked off its new Transportation Matters campaign.

The goal of Transportation Matters is to educate businesses regarding the shortfall in transportation funding. In June feedback from public meetings held throughout the area will be presented to the Metro Mayors. Commuting Solutions will ask the elected officials to finalize a proposed project list and funding initiative, most likely a regional sales tax.

One of these public meetings took place at the Boulder Area REALTOR® Association for members of BARA and the Longmont Association of REALTORS®. Members of Commuting Solutions presented a list of potential projects for feedback. The list includes bus rapid transit (BRT) on State Highway 119 and US 36 as well as a BRT feasibility study for SH 287 as well as a project to create bidirectional lanes on the I-25 and US 36 interchange. When polled, 46 percent of the meeting participants said the project list did not meet their needs. Critics said the list focused too much on multi-modal transportation versus cars and lacked focus on future needs for the area.

Commuting Solutions will host a public meeting on May 15 in Longmont. The meeting is scheduled from 8:00 am to 9:30 at the Longmont Museum, 400 Quail Road. Registration is encouraged, using this link:

Transportation is a REALTOR® issue! We encourage LAR members to attend this meeting and voice your thoughts about the proposed project list.


Legislative Update:
HB-1352 “Oil And Gas Facilities Distance From School Property” CAR Position: Oppose. Status:  Scheduled for a hearing April 26 in the House Health, Insurance and Environment Committee.

Two of the sponsors for this bill include Senator Matt Jones and Representative Mike Foote of Boulder County, which is the epicenter of anti-oil and gas sentiment. The bill increases the oil and gas setbacks from schools, stating that the minimum 1,000-foot distance from any school applies to the school property line and not the school building.

SB-109 “Authorize Audio-video Communication Notarial Acts” CAR Position: Oppose unless amended.  Status: Not on calendar.

The bill authorizes notaries public to perform a notarial act on behalf of an individual who is not in the notary’s physical presence, but only with respect to an electronic document. To perform a “remote notarization”, a notary must use a tamper-evident electronic system that conforms to standards established by rules of the secretary of state, including using real-time audio-video communications and keeping an audio-video recording of the notarization for at least 10 years. CAR has concerns about the privacy of individuals who might use this service since their information could be sold by notaries in the bill’s current form.

Call for Action on HB-1195 “Tax Credit Contributions Organizations Affordable Housing” CAR Position: Support. Status: Not calendared.

For income tax years commencing on or after January 1, 2019, but prior to January 1, 2030, the bill creates a state income tax credit for a donation of cash or securities a taxpayer makes to an eligible developer to be used solely for the costs associated with an eligible project.

The bill defines “eligible project” to mean the development of new residential housing for home ownership consisting of one or more residential units constructed for sale to a buyer whose median income is 120 percent or less of the area median income and for which each unit sold is to be preserved as affordable housing by means of a specified deed restriction.

CAR held a “Call for Action” on HB-1195 to encourage House Democrats to support this bill and get it moving forward. The bill was in limbo until the budget bill was passed but has not been calendared for further hearings since the budget passed.

SB-001 “Transportation Infrastructure Funding” CAR Position – Support. Status – Passed Senate, introduced in House. Sponsored by Senator Cooke (Greeley) and Rep. Buck (Windsor)

SB-01 would allow CDOT to issue $3.5 billion in transbonds over the next three (fiscal) years. The bill allocates $250 million a year to transportation for the next 20 years. Unfortunately, in order to get support from Senate Democrats, the bill was amended to delay voter approval of the bonding to 2019. This is problematic because interest rates are rising and there is no guarantee Democrats will refer the measure to voters if they hold the majority in the House and the Senate after the November 2018 election. Democrats support the delayed vote because they support the Denver Metro Chamber’s proposed transportation sales tax initiative which the DMC hopes to get on the November ballot. However, this is the first time in four attempts that the transportation bonding measure has passed the Senate AND been assigned to a non-kill committee in the House. (See more information, below.)

HB-1227 “Real Estate Commission Flexibility in License Period” CAR Position – Support Status – Has passed House and Senate.

HB-1227 is a clean-up bill for the 2017 real estate sunset bill. In the sunset bill, the expiration date of real estate licenses changed from an anniversary date to a calendar renewal on December 31st of the third year after issuance.  However, the legislative legal services committee had a few concerns about some rules promulgated to effect this change and therefore a clean-up bill this year will address those concerns to ensure that real estate licenses can be renewed on the calendar date instead of the anniversary date. CAR’s LPC and the Division of Real Estate support this legislation.

CAR says, “Several of our rural members and local boards previously did not have the same access to a quality transition course. Some do not have offerings because only one type of education service provider can offer the course and this would mean members would have to travel long distances to meet their requirements. Additionally, depending on the timing of their renewal date during that transition period, some transitioning licensees could be closer to a more current annual update course offering and the transition course would be dated since it is only updated once in five years. The number of continuing education requirements will remain the same under the amendments, but in the transition license period two annual update courses will be required and the rest of the requirements can be met with elective courses.  As amended in the House and Senate committees the bill now will allow for calendar renewals of licenses and clear up some of the confusion around the transition period.”

Colorado Succeeds to Survey Gubernatorial Candidates: Colorado Succeeds (CS) is a business-driven advocacy organization that is pushing to improve Colorado schools to prepare students for the workforce. According to its website, CS “puts business to work for schools, providing a perspective that paves the way to a better public education system. We connect business leaders to the education system and legislative processes – we’re the only organization in Colorado to bring together these critical players to reimagine our schools.”

Colorado Succeeds wants to heighten education in the gubernatorial election. It will survey the top 12 candidates on their positions regarding education and release the information later this spring. CS focuses on education outcomes and wants to get government out of the way, allow schools to get more efficient with school funding. Note: CAR is a member of CS.

Partisan Battle Over Transportation Bill: According to the Denver Business Journal, hours after the Colorado Senate unanimously passed a formerly divisive transportation-funding bill Wednesday that sets up a potential $3.5 bonding initiative on the 2019 ballot, House Democrats signaled that the bipartisan agreement may not survive their chamber.

During an all-day budget debate, the House approved an amendment to move the majority of the roughly $500 million in one-time funds that the Senate had put toward state highway expansion to city and county roadway needs and to multi-modal projects instead. House leaders also said repeatedly that they do not want to tie up future state budgets in what they call irresponsible bond repayments for fear that it will cause funding shortfalls in other areas of the government when the next recession hits.

The House vote seems to leave in peril a bipartisan agreement on how to address what is considered by many business leaders to be the most important issue of the 2018 legislative session — addressing the $9 billion backlog in transportation funding that has left major arteries like Interstate 25. The Denver Metro Chamber of Commerce continues to look at running a ballot initiative in November that would raise sales taxes to fund roads and transit and is considering multiple ballot titles in that quest.

SB-01 would make that fix by putting $500 million in the upcoming fiscal year toward new highway construction — a one-time payment requested by Democratic Gov. John Hickenlooper. Then, the bill proposes that voters be asked for permission to sell $3.5 billion in bonds to address the state’s biggest highway pinch points, paying that back with an annual general-fund allocation of $250 million.

House Speaker Crisanta Duran, resisted calls from some in her caucus to move some or all of the transportation-funding money to education, but she insisted it be divided between the state, local governments and a fund for transit to bike lane projects. An amendment added by Duran and Rep. Faith Winter, Chair of the Transportation Committee, divides the allotted $495 million 35 percent to the state, 25 percent to cities, 25 percent to counties and 15 percent to the multi-modal project fund.

Duran said the division is necessary in order to get the money into the hands of local officials who understand their transportation needs the best. And she continued to argue that the one-time funding proposal is superior to the long-term funding commitment imagined through bonding in SB-01. SB-01 has been assigned to the transportation, finance and appropriations committees but will not be scheduled for hearings until the House completes its budget deliberations.

Note: If Colorado wants to be eligible for federal funding under the proposed infrastructure plan, it must show “skin in the game” (see below). That’s why the Democrats plan to move funding in SB-01 to local governments is dangerous. In addition, pushing the referred vote on bonding to 2019 will cost the State more because of rising interest rates. Finally, if the Dems take both chambers in the November election it is entirely feasible they could decide not to refer the measure to the voters at all.

Appraisal Qualifications in Colorado: The Appraisal Qualifications Board of the Appraisal Foundation has recently changed the Real Property Appraiser Qualification Criteria. As of May 1, no college level education is required for licensed residential appraisers. Certified appraisers are still required to have a bachelor’s degree

The Division of Real Estate will be undertaking Emergency Rule-Making before the Colorado Board of Real Estate Appraisers on April 30, 2018, in order to incorporate and be in compliance with these new appraiser qualifications.  Once those rules are adopted, the Division will incorporate the new qualifications on its site.

FHFA Review of AMC Appraisals: On March 26, 2018, the Federal Housing Finance Agency (FHFA) published a working paper entitled “Are Appraisal Management Companies Value-Adding? – Stylized Facts from AMC and Non-AMC Appraisals.” The paper compared efficacy of appraisal management company (AMC) appraisals vs. non-AMC appraisals. The main findings were that both types of appraisals have similar levels of overvaluation, but AMC appraisals tend to be more prone to contract price confirmation and super-overvaluation (above 6 percent). Both types have the same level of mistakes, despite AMC appraisals tend to use more comparable properties in their analysis.

NAR, under its Responsible Lending Principles, supports the principles of appraiser independence that AMCs are designed to facilitate, but recognizes that alternatives to AMCs can also provide the same conformity to appraiser independence rules.

Initiative to Combat Sexual Harassment in Housing: On Thursday April 12, 2018, the day after the 50th Anniversary of the signing of the Fair Housing Act, the Department of Housing and Urban Development (HUD) and the Department of Justice (DOJ) announced the creation of a new, joint initiative to combat sexual harassment in housing. The initiative consists of (1) a HUD and DOJ interagency task force to combat sexual harassment in housing, (2) an outreach toolkit, and (3) a public awareness campaign.

The newly created HUD-DOJ Task Force to Combat Sexual Harassment in Housing will focus on five key areas: continued data sharing and analysis, joint development of training, evaluation of public housing complaint mechanisms, coordination of public outreach and press strategy, and review of federal policies.

The outreach toolkit provides templates, guidance, and checklists based on DOJ pilot program feedback to help HUD offices and Justice Department’s nationwide network of U.S. Attorney’s Offices reach victims of sexual harassment.

Finally, the public awareness campaign will bring together stakeholders, develop a social media campaign, and create public service announcements run by DOJ’s Executive Office of U.S. Attorneys. More information is available here:

Administration Encourages Faster Infrastructure Permitting: On April 9 the Trump administration announced an agreement to encourage speedier approval of infrastructure proposals, requiring agencies to work together to reach permitting decisions in two years or less. Twelve departments and agencies, including the departments of Transportation, Interior and Energy, the Army Corps of Engineers and the Environmental Protection Agency, pledged to work with each other to speed up decisions on environmental and other permitting. Streamlining environmental and other permitting decisions is a major part of Trump’s infrastructure agenda, along with spending $200 billion of federal money over 10 years to spur $1.5 trillion in total spending from all levels of government and the private sector.

NAR Analysis of Infrastructure Plan: In this recording of March 28, 2018, live webcast, NAR’s Advocacy Group looks at the Trump administration’s $1.5 trillion infrastructure plan. What has to happen next? And will there be opportunities for real estate professionals if all or part of the plan is enacted?

NAR Supports Short Sale Bill: On March 26, 2018, NAR submitted a letter of support for H.R. 5237, the “Fast Help for Homeowners Act,” introduced by Reps. McNerney (CA-D) and Jones (NC-R). The legislation H.R. 5237 would help to streamline the short sale process by requiring a lender holding a second mortgage on a property to review and make a decision on a short sale agreement within 30 days. If the lender does not make a decision within that time frame, the short sale will be deemed approved on the 30th day.

Enormous amounts of time are spent on potential short sales that result in foreclosures. Even if successful, the process still takes many months and countless hours and often requires re-marketing of the property because buyers lose patience and terminate the contract. The short sale process is even more challenging to complete if the property owner has two mortgages loans on the property. In these situations, cooperation of the first lender and second mortgage lender are needed for the process to move forward, creating unnecessary difficulty and frustration for the property owner.

Establishing a time frame for responding to potential buyer offers will reduce the amount of time it takes to sell the property, improve the likelihood the transaction will close, and reduce the number of foreclosures. This will benefit the lender, the seller, the buyer, and more importantly, the community.

NAR Supports CFPB Structure Change: On March 28, 2018, NAR sent a letter thanking a bipartisan group of legislators for introducing H.R. 5266, the “Financial Product Safety Commission Act of 2018.” This legislation would transition the governance structure of the Consumer Financial Protection Bureau (CFPB) from a sole director to a five-person, bipartisan commission.

Due to its critical mission of consumer protection related to financial products and services, the CFPB’s authority is too important and vast to be controlled by a single individual. With every new presidential administration, rules, guidance, and other decisions made by a sole director at the CFPB may be unendingly overturned by each new director. This creates enormous regulatory uncertainty for financial services and real estate industries, which ultimately harms consumers, small businesses, and the overall economy.

A bipartisan commission at the CFPB would strengthen the governance of the CFPB, prevent it from becoming a political football, allow for a diverse set of voices regardless of who sits in the White House, and ensure its longevity.

Furthermore, in order to safeguard consumers and continue encouraging responsible lending practices, NAR believes the CFPB should remain independent from the Congressional appropriations process, preserving the existing funding from the Federal Reserve. Such independence shields the agency from political pressures and bureaucratic impediments that may inhibit agency operations and protection of consumer financial interests.

In conclusion, H.R. 5266 will improve accountability, transparency and policy consistency at the CFPB. A more reliable consumer financial advocacy agency would bolster real estate professionals’ role as trusted advisors to advance tour nation’s pursuit of responsible homeownership.

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