Government Affairs Update
February 2020
Barbara Koelzer, Regional Government Affairs Director
[email protected]
303.886.5675

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Government Affairs Update
February 2020
Barbara Koelzer, Regional Government Affairs Director
[email protected]
303.886.5675

LOCAL
Boulder County
County Solicits Feedback on New Floodplain Maps: Boulder County is conducting outreach on new floodplain maps of waterways affected by the 2013 floods.  In particular the County wants to hear from property owners who might be impacted by the new maps. Six open houses have been scheduled in which residents can view the maps and discuss them with County staff, as well as Federal Emergency Management Agency (FEMA) and Colorado Hazard Mapping Program representatives. A list of the meetings is available here: https://tinyurl.com/qnzwwgr

The maps will most likely become final in 2021 and will be used by lenders and insurance providers to determine which properties require flood insurance. A 90-day appeal period will begin sometime this spring. During this time, property owners can submit formal appeals but those must be based on “scientific and technical data.”

Boulder
Council Discusses Construction, Energy Code Updates: On January 21 the City Council unanimously passed a package of updates to municipal building codes on second reading, including the 2018 International Residential Code and the 2020 City of Boulder Energy Conservation Code. For the first time, the residential code will allow tiny aka micro homes – 400 SF or less.

The tiny home amendment requires these homes to be constructed and inspected on a fixed foundation and hooked to fixed utilities, as is the case in most municipalities. The Council did ask staff to add language for third reading allowing off-site construction of these units, which would then be placed on permanent foundations.

The sprinkler exemption for single-family and duplex dwellings was removed from the residential building code. This means that moving forward new single-family and duplex homes and any single-family or duplex unit undergoing a change of use, including detached ADUs, must include sprinklers for fire safety. Thus, Boulder will join Boulder County, Aspen, Cherry Hills Village, Vail and seven other jurisdictions in Colorado in requiring residential sprinkler systems. The cost to install them is estimated to cost an additional $1.35 per square foot. In addition, the City Council approved a variety of other local amendments, including straw-clay construction for non-load bearing walls and the use of strawbale construction for structural and non-structural walls.

Regarding the approved amendments to Boulder’s energy code, new homes larger than 3,000 SF must meet net-zero energy requirements. It is the City’s goal eventually, to require net-zero construction for all new buildings but it will take several building code cycles to get there. Also, increased recycling and reuse rates are now required for materials during demolitions. During public comment a commercial architect applauded this, but criticized the City’s increasing review times, which is hurting small businesses, he said.

The ordinance to adopt all the code changes will require third reading and possibly a fourth. The effective date was changed to July 1, at Council’s request.

Erie
Trustees Approve Carriage Houses:  Erie’s Board of Trustees approved the fourth phase of development in Erie Highlands, south of Erie Parkway and west of Weld County road 5. The project will include 156 single-family lots on 29.6 acres. The homes are described as “carriage” houses, which range from 1,200 to 2,200 square feet in size and are clustered around a shared driveway. The carriage style house is becoming more common in Northern Colorado as a way to create entry-level homes.

In order to bring the project into compliance with Erie Highland’s PUD (Planned Unit Development), the trustees approved a modification to the PUD to allow carriage houses and increase the density from five to eight dwelling units per acre.

Longmont
Council to Consider Prohibiting Residential Metro Districts: After a long discussion, the City Council voted 4-1, with Tim Waters against, to begin the process of repealing the ordinance which allows residential metro districts in Longmont. Polly Christensen made the motion after saying Longmont has plenty of new homes and builders don’t need the metro district option to finance new development. She argued metro districts are “fiefdoms of privilege.”

Joan Peck explained her vote by saying, “my confidence that this Council will monitor metro districts is very, very low.” Aren Rodriguez, who ran the meeting as Mayor Pro Tem, said he is “not inherently against them but they should be cautiously applied.” Mountain Brook, the only metro district that has been approved in Longmont since the Council passed an ordinance to allow them last year, didn’t provide enough affordable homes, in his opinion. Susie Hildalgo-Fahring said, “We run the risk of stretching our staff too thin. I’m a labor and union supporter. Too many hours were spent on Mountain Brook.”

Tim Waters was the only Council member who spoke in support of metro districts. He argued that the Council did a disservice to a segment of our population if it passed the motion. “We can talk the talk about affordability and then we craft policies that obstruct that.”

A study session will be held to discuss the details of Christensen’s proposed ordinance to repeal residential metro districts. Given the Council’s schedule, that meeting may not happen until early February. LAR’s Board of Directors sent an email to the Council which encouraged them to allow metro districts, saying the Council has the authority to regulate them and protect residents. In addition, the email stated, “Allowing residential metro districts will add to the inventory of homes and increase the supply.”

COLORADO ASSOCIATION OF REALTORS®
LPC Takes Positions on Bills: CAR’s Legislative Policy Committee (LPC) spent hours at its first meeting of the session taking positions on real estate-related bills. Here is a sample of the most interesting bills and CAR’s positions:

SB-096 “Remote Notaries Protect Privacy” CAR Position – Support

SB-096 authorizes notaries public to perform a notarial act through use of audio-visual communication, commonly referred to as “remote notarization” and, most importantly, prohibits the use or sale of personal consumer information by a remote notary or the provider of a remote notarization system outside the notary transaction.

CAR supports uses of new technology such as remote notarization; however, data privacy concerns of consumers must be considered. This legislation would protect consumer data privacy in a meaningful way for consumers and it also aligns with NAR and REALTOR® ethics standards.

SB-109 “Short-term Rentals Property Tax” CAR Position – Oppose

SB-109 changes the definition of a residential improvement property tax classification from residential to commercial property when a building, or portion of a building, designed for use predominantly as a place of residency by a person, a family, or families, but that is leased or available to be leased for short-term stays during the property tax year. This would change the property taxes from 7.1% to 29% for those that rent out their property as an investment.

Classifying a short-term rental unit as a nonresidential property interferes with the private property right of a homeowner and excessive regulation could be considered a taking of property under the U.S. Constitution.

HB-1141 “Fees Charged to Tenants by Landlords” CAR Position – Oppose

The bill prohibits a residential property manager or landlord of a mobile home park from charging a tenant a late fee for late payment of rent unless the rent payment is late by at least 14 calendar days or charging a late fee in an amount that exceeds $20 or 3 percent of the tenant’s or home owner’s monthly rent or 3 percent of the amount of the rent that has not been paid. Additionally, the proposed legislation would prevent the initiation of eviction procedures as a result of the tenant’s failure to pay late fees. A landlord could not charge a late fee more than once per late rent violation or charge interest on the late fee imposed. Finally, any amount of the late fee would not be allowed to be taken from a rent payment but instead from a security deposit.

Many of Colorado’s property owners enter the rental market as landlords because they are looking to downsize, are required to relocate due to occupational demands, such as military orders, as a source of income, or to provide retirement stability. Property owners do not have the opportunity to pay their mortgage late if a tenant is late paying their rent and do not have enough savings to cover their mortgage payments when rent is late or does not show up at all. This legislation does not balance the property owner and tenant obligations evenly, it adds litigation procedures and treble damages for not acting in good faith.

STATE
What’s Next for Transportation Funding? Following the failure of multiple transportation measures to gain voter support, the question now is how can Colorado fund highways? CDOT has a $9 billion list of needs and the legislature will need to decide if it is willing to allocate any general fund dollars to supplement the Colorado fuel tax, which is declining in value. The fuel tax has not been increased in our state for nearly 28 years.

The Fix North I-25 Alliance, advocates for a $300 million general fund annual allocation. A fuel tax increase and an increase in the fees paid by electric vehicle owners might be the most equitable and simple solution to augmenting Colorado’s transportation budget, if legislators would support it.

In the meantime, a bill (HB-1151) was just introduced by Representative Matt Gray (Broomfield) and Senator Faith Winter (Westminster) that would allow groups of local governments to create transportation planning organizations and impose various taxes (with voter support) for transportation and transit solutions. Some transportation advocates fear this idea would simply “balkanize” Colorado’s highway system and put rural areas at a disadvantage.

Gray and Winter do not intend to hold hearings on the bill for a while, hoping that a statewide solution will emerge. However, if no bi-partisan agreement is found, Winter said the bill will move forward.

Note: Only seven states (including Colorado) have not increased their fuel tax since 1997.

New Ballot Measures: Several proposed ballot measures should seem familiar. Colorado Rising, an anti-fracking group is working to put oil and gas setbacks on the November ballot and has submitted six different proposed measures. Anti-growth activist Daniel Hayes of Golden received approval from the Ballot Title Setting Board for his “Limits on Local Growth” initiative which would limit growth in Front Range counties to one percent a year. The proposal, known as Initiative 122, must have its ballot language approved before proponents can gather signatures to place it on the ballot.

More information on proposed ballot initiatives is available here:
https://tinyurl.com/y7crwep2

 NATION
Flood Insurance Extended: Congress has been preoccupied in the past month but did manage to pass an important spending package which extends the National Flood Insurance Program (NFIP) through the 2020 fiscal year (September 2020). After the passage NAR issued the following statement, part of which is available below:

“On flood, NAR is pleased to see a 9-month program extension worked through Congress with little fanfare. While the agreement will ensure NFIP policies can be issued and renewed through the end of the fiscal year, we will continue to push lawmakers to use the afforded time to find compromise on a longer-term reauthorization and reform package.

 As we know all too well, this program has operated on a string of short-term extensions and endured multiple lapses over the past two years.  From Montana to Mississippi and everywhere in between, that unpredictability has put home sales in jeopardy and left insurance policies in limbo. While NAR research has shown that NFIP lapses threaten 1,300 transactions each day, the resulting uncertainty impacts our nation’s overall housing market and economic stability.”

Congress Passes Temporary Tax Extensions: Also included in the budget passed by Congress are temporary extensions of three tax provisions directly impacting our industry: 1) the exclusion of forgiven mortgage debt from gross income, meaning that owners of primary residences who sold them short and had part of their mortgage debt written off will not have to pay tax on the amount forgiven; 2) the deductibility of premiums for mortgage insurance; and 3) the deduction of the cost of improvements to commercial buildings that make them energy efficient. These provisions had all expired at the end of 2017, but the bill extends them, retroactive to the beginning of 2018, and through the end of 2020.

NAR’s 2020 Advocacy Agenda: Are you curious about NAR’s priorities for 2020? NAR has released its advocacy agenda for the year. The entire document is available via the link, below.

Federal Taxes and Real Estate – NAR is monitoring the regulations being issued by the Internal Revenue Service and the Treasury Department as a result of the Tax Cuts and Jobs Act (2017) and will ensure the most positive outcome for real estate practitioners as possible.

Other topics of issue include the National Flood Insurance Program, Association Health Plans, GSE Reform, technology and as always, Fair Housing.

https://tinyurl.com/tjnhckm

Administration Streamlines NEPA Reviews: The National Association of REALTORS® is backing the Trump administration’s proposal to reform the National Environmental Policy Act, which NAR President Vince Malta says could help modernize environmental standards while also helping to alleviate housing shortages. Malta joined President Donald Trump and other officials at a White House event Thursday to announce the proposed NEPA changes, which would be the first in more than 40 years.

The Trump administration says the reforms will help streamline approval of infrastructure and housing projects, highways, and energy pipelines. The plan is still subject to public hearings before it can be approved. Malta says the reforms could reduce regulatory burdens while still retaining strong environmental quality standards. “NAR has long advocated for common-sense reforms to promote infrastructure development and streamline review processes without compromising on critical environmental protections,” Malta said in a statement. “Since NEPA was last updated nearly four decades ago, the housing industry has seen countless infrastructure modernization projects paralyzed by arbitrary delays and unreasonable cost increases.”

In recent months, NAR has intensified its calls for comprehensive reforms to the nation’s infrastructure. “The National Association of REALTORS® is confident that the reforms announced [Thursday] will remove the barriers standing in the way of infrastructure improvements that stimulate economic growth and create jobs,” Malta said. “We look forward to partnering with the White House as it works to implement these changes in the most responsible and effective way possible.”

NAR’s sentiment was echoed by other housing groups, including the National Association of Home Builders, which says the reforms could help spur new home construction. “This proposal to modernize and reform the NEPA review process will streamline the NEPA reforms could help spur new-home construction permitting process and reduce unnecessary costs and delays for vital infrastructure projects that are needed to support residential land development projects,” says NAHB CEO Jerry Howard. “For the housing industry, those uncertainties and delays create challenges for communities, businesses, and builders, and further exacerbate the current housing affordability crisis. We welcome the latest action by the administration to remove regulatory barriers that hinder housing and economic growth.”

AQB Proposes Update to Appraiser Criteria: On January 6 the Appraiser Qualifications Board (AQB) released proposed changes to the Appraiser Qualification Criteria that would align with recent changes by the federal banking agencies allowing the use of evaluations for residential properties under $400,000 in lieu of an appraisal in federally related transactions. The proposed changes to the Criteria would allow licensed residential real property appraisers to perform appraisals of complex one-to-four residential unit properties up to $400,000. Currently the limit is $250,000 which reflects the former value used by the federal banking agencies. Comments are due February 6, 2020.

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