Government Affairs Update

October 2019

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

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LOCAL
Longmont
Accessory Dwelling Unit Regulations To Be Revised: The City Council decided to take another look at Longmont’s accessory dwelling unit (ADUs) regulations after a resident built an ADU on top of a garage that overlooks neighboring properties, affecting their privacy. To-date 118 ADUs have been approved and built in the City. The City is preparing stock ADU plans, which will be available to residents at no charge to encourage the construction of more ADUs as one way to expand Longmont’s affordable housing options.

Councilor Bonnie Finley suggested adding neighbor notifications to the requirements. Polly Christensen suggested a notification requirement for any kind of addition on a property, including sheds, garages or porches. Ultimately, the Council asked staff to bring back ideas to improve the ADU regulations, including neighbor notifications and penalties for violations.

Mountain Brook Metro District Approved: On October 8 the City Council voted 4-3 with members Christensen, Rodriguez and Peck opposed, to approve the Service Plan for the Mountain Brook metropolitan district south of Rogers Road and west of Dry Creek Drive. The project will include 110 single-family homes, 149 townhomes and 200 condos, as well as a 26-unit Veterans Village for homeless veterans and eight Habitat for Humanity homes.

The metro district will be capped at 50 mills, which is about $100 a month for a home appraised at $350,000. Those mills will be used to pay for the infrastructure for the project, as well as the construction of greenways, parks, buffered bikeway and an amenity center with a swimming pool.

After the service plan was approved, the Council considered the development’s inclusionary housing agreement, in which they plan to donate 2.4 acres for the Veterans Village and the Habitat homes. Councilor Aaron Rodriguez said he couldn’t support the agreement because “the developer is already getting huge financial aid for the project because of the metro district.” Polly Christensen agreed with him.

Councilmember Tim Waters became irate, saying he was offended and wanted Rodriguez and Christensen to explain why they voted against the service plan for the project — and their comments about the ‘financial aid’. Councilmember Bonnie Finley pointed out that the developer wasn’t getting any financial aid and in fact, by donating the land for the Veterans Village and Habitat homes, the developer was making a donation to the tune of $2.5 million. Rodriguez and Christensen declined to explain their comments and the inclusionary housing agreement passed on a 5-2 vote, with Christensen and Rodriguez opposed.

Partnership Creates Longmont Mobile Home Co-op: Colorado Housing and Finance Authority (CHFA) announced its partnership with a capital development fund to support the preservation of the Longmont Mobile Home Community (Longmont MHC) by converting its structure to a resident-owned cooperative. This co-op eliminates the homeowners’ risk of displacement, gives them more control over lot rent fluctuations, and preserves affordable homeownership in Longmont. The Longmont MHC has 36 individually owned manufactured homes.

CHFA made a $1.19 million purchase for participation in an existing acquisition loan made by ROC USA Capital. Impact Development Fund (IDF) purchased a $1.34 million participation interest in the loan. ROC USA Capital remains the loan servicer. The loan was used by the Longmont MHC’s homeowner cooperative to purchase the community’s land. The City of Longmont also supported the transaction with a no-interest, deferred-payment $300,000 loan from its Affordable Housing Fund.

While this type of affordable housing finance may be emerging in Colorado, it’s a model ROC USA has used in multiple states across the U.S. Thistle Communities, ROC USA Network’s affiliate in Colorado, provides technical assistance for board training, loan compliance, and community development. Longmont MHC worked with Thistle through the purchase process and will continue to do so for at least the next decade.

City Adopting New Flood Maps: On October 15 the City Council got an update on the adoption process for new flood plain maps. After the catastrophic 2013 flood, the legislature passed a bill to reanalyze potential flood hazards and that information was submitted to FEMA (Federal Emergency Management Agency) for review. FEMA is now in the process of revising its maps, which are known as FIRMs. The FIRMs are important to Longmont because they will determine flood insurance rates in the included areas.

According to Longmont’s Floodplain Administrator, Monica Bortolini, the new maps are not expected to become official until early 2021, pending any appeals. Once the maps are in effect flood insurance requirements will change.

The City will hold multiple public meetings to present the new maps to the public after the beginning of the year. In addition, specific meetings with owners of property within the flood plains of the St. Vrain and Left Hand Creeks are also being planned.

Council Adopts Sustainability Evaluation System: On October 22 the City Council approved an ordinance instituting a new requirement for development applications along Longmont’s river corridors. Currently, any development proposal that is adjacent to a river requires a variance if the project is within a 150-foot setback. The new ordinance will require that the applicant use a Sustainability Evaluation System (SES) to evaluate and score the “economic, environment and societal impacts and benefits of development in the river/stream corridors, riparian areas, and wetlands.”

However, some members of the Council made it clear that their goal is to broaden the use of the SES and require its use for properties that are not within the setback. Aaron Rodriguez, Polly Christensen and Joan Peck attempted to amend the ordinance to require the SES for any development proposal for property that is adjacent to a river corridor. However, the City doesn’t have a definition for what “directly contiguous or adjacent to a river corridor” means.

Tim Waters, Marcia Martin, Bonnie Finley and Mayor Bagley opposed the amendment due to legal concerns. Waters said it is important that the SES is “legally defensible” to avoid potential takings lawsuits. Joni Marsh, Longmont’s Community Development Director, suggested it was important to tackle the topic step by step and reminded the Council that staff plans to come back next month with the definition of adjacent as well as suggested language to include additional waterways that are listed as “areas of concern” in the newly adopted Wildlife Plan.

The Council voted unanimously to adopt the ordinance as written. Staff will continue its research on how broadening the use of the SES would affect new applications and draft additional language to define adjacent and contiguous. More discussion scheduled for the November 19 Council meeting.

COLORADO ASSOCIATION OF REALTORS®
CAR Takes Positions on State Ballot Issues: On October 16 CAR’s Board of Directors ratified recommendations from the CAR Political Action Committee on two questions referred to the voters by the Colorado General Assembly.

Ballot Issue CC “Retain State Government Revenue”
CAR Position – Oppose

This question asks voters to allow the State to retain Taxpayer Bill of Rights (TABOR) surplus revenue permanently rather than refunding it to taxpayers. The revenues would be split evenly between transportation (including transit), K-12 and higher education. The State has not issued a refund in 10 years.

While CAR agrees that transportation, K-12 and higher education are crucial, this measure will not provide reliable, adequate funding streams because TABOR refunds are small and infrequent. For example, there may be a TABOR refund in fiscal year 2020 but estimates of the refund vary between $150 million and roughly $348 million. To give one example of why this amount would not go very far, according to the Colorado Department of Transportation, an additional $9 billion is needed to fund all the projects on its list. In addition, because this is a statutory measure, future legislators could decide to use the revenue to fund other priorities.

Ballot Issue DD “Taxation of Sports Betting to Fund Water Projects and Obligations”
CAR Position – Support 

This question asks voters to legalize sports betting in Colorado. A 10 percent tax on casino profits from those bets would be used to fund state water projects and pay for the regulation of sports betting.

Although sports betting is clearly not a REALTOR® issue, water is vitally important in order to fund the growth that Colorado will see in the near future. This measure will help implement the Colorado Water Plan, which was released in 2015 and identifies actions by which our State will address future statewide water needs.

Legislative Preview: Recently CAR staff and lobbyists provided their thoughts on issues that are likely to come up during the 2020 legislative session. Because it is a major election year, it is likely we’ll see a lot of “statement” bills, said Jason Hopfer, CAR’s contract lobbyist.

Given the make-up of the legislature, we can expect more bills focused on rent control, landlord/tenant responsibilities and short-term rentals. There are rumors that inclusionary zoning may be a new focus of interest, along with condominium conversion legislation.

The Department of Regulatory Affairs (DORA) just released its sunset report on home inspections. Unfortunately, the report does not recommend legislation to regulate home inspectors, so it is unlikely we will see any bills related to that topic in 2020.

STATE
State To Apply Stricter Drilling Rules: The Colorado Oil and Gas Conservation Commission (COGCC) is expanding the range of oil-well permits subject to additional scrutiny after it and state health officials released a study on the health impacts from emissions. In a press conference, COGCC director Jeff Robbins said the agency will immediately begin applying the stricter rules for any drilling operator that wants to dig a well within 2,000 feet of a home. The current range for additional scrutiny is 1,500 feet from an occupied home.

The new regulations will apply to 39 permits awaiting approval, including 27 in Weld County, two in both Larimer and Boulder counties, and one in Adams County. However, the new rules do not apply to wells currently operating within range of a home.

The new rules come with the release of a modeling study from the COGCC and Colorado Department of Public Health and Environment to measure volatile organic compound emissions from wells in Northern Colorado and Garfield County in the far west section of the state using emissions samples and weather data from 2016.

It determined that there are short-term health risks such as headaches, nausea and nosebleeds for people breathing air near an active well, especially if the well is in a backflow or there are adverse weather conditions. However, the study said the risk of long-term health effects from VOC-specific emissions is low and the chance of cancer falls within the U.S. Environmental Protection Agency’s current acceptable risk range.

The study will be used in the current rulemaking round for Senate Bill 181, and will be used for additional rulemaking in 2020 to reduce oil and gas emissions. Robbins also said agencies will start more real-time monitoring of active drilling sites within the next several months.

NATION
National Flood Insurance Program Extended: National Association of Realtors® President John Smaby issued the following statement after President Trump signed H.R. 4378 into law Friday evening, extending the National Flood Insurance Program’s funding authority through November 21.“With this CR temporarily ending the threat of a program lapse, Realtors® urge Congress to resume working toward a long-term reauthorization of the National Flood Insurance Program.”

“NAR strongly supports the NFIP Reauthorization Act, which includes a 5-year extension along with significant reforms to improve mapping, enhance mitigation and remove obstacles to private flood insurance. H.R. 3167 strikes a delicate balance between NFIP sustainability and affordability, and we urge both chambers of Congress to take up this legislation after its unanimous approval in the House Financial Services Committee.”
The National Association of Realtors® is America’s largest trade association, representing more than 1.3 million members involved in all aspects of the residential and commercial real estate industries.

Agencies Increase Residential Appraisal Threshold: On September 27, 2019, the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (collectively “the Agencies”) adopted a final rule increasing the threshold for requiring an appraisal in residential real estate transactions from $250,000 to $400,000. Federally related transactions under $400,000 will require an evaluation, rather a full appraisal, to determine value of the real estate in question. A federally related transaction is a non-Fannie Mae or Freddie Mac transaction and a non-federal financed transaction, such as loans under the Federal Housing Administration, the Rural Housing Service or the Department of Veterans Affairs.

The NAR position was to have these limits indexed like the GSE conforming loan limits.

NAR, Allies Set Record Straight: To counter a growing narrative that the Federal government has expanded its exposure to risky mortgages, NAR recently published an op-ed with the Mortgage Bankers Association, the American Bankers Association, and the National Home Builders Association in the American Banker to set the record straight. The op-ed describes how comprehensive characteristics, along with new laws passed in the wake of the crisis, have ensured a greater focus on sustainable mortgage lending. The article also detailed how rates of serious delinquency and foreclosure remain at or near-historic lows across both GSE and FHA mortgages.

https://www.americanbanker.com/opinion/lets-get-housing-reform-right-this-time

CFPB Director Testifies: Last week, Consumer Financial Protection Bureau (CFPB) Director Kraninger provided her semi-annual report to Congress. Director Kraninger testified before the House Financial Services Committee and the Senate Banking, Housing, and Urban Affairs Committee to discuss current updates and developments at the Bureau.

Director Kraninger provided testimony on the CFPB’s new innovation policies that were recently announced and symposiums hosted by the Bureau on behavior economics, and defining “abusive practices or acts” under the Dodd-Frank Act. Additionally, Director Kraninger provided some insight on the qualified mortgage (QM) patch. She explained that the QM patch will expire in January 2021 and that the Bureau is working on a plan as the transition to end the QM patch is forthcoming. Director Kraninger also expressed that the Bureau is working to increase access to mortgages. One of the major topics also discussed was whether the Bureau is constitutional based upon its structure, and recently the Supreme Court has agreed to hear a case on the matter.

NAR is continuing to monitor updates and new developments from the CFPB.

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