Government Affairs Update

July 2019

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

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LOCAL

Boulder County

Boulder

Council Backs Off Home Size Caps: Recently Boulder’s City Council continued its discussion concerning a trend in north Boulder in which smaller homes are demolished on larger lots in order to build new, bigger homes. In essence, Council wanted to consider single-family home size restrictions and zoning possibilities for allowing more modest sized dwelling units like ADUs, cottages, tiny homes and duplex/triplexes.

After discussing the topic multiple times, the Council had directed staff to create a plan that would require smaller homes in residential zones in support of the City’s housing affordability and climate action goals. The first phase of that plan would have incorporated a cap on the size of single-family homes in residential estate (RE) and residential rural zones (RR).

However, what seemed reasonable in theory wasn’t acceptable to most of the Council once the plan was put in writing. Councilman Bob Yates called the cap “arbitrary,” and Cindy Carlisle said it was “draconian.” The majority agreed, saying it would not create affordability.

The concept of allowing more small dwelling units was received more favorably. Staff suggested allowing more square footage if it would be used to add an ADU or to convert an existing single-family home to a duplex or triplex, providing parking requirements are met (which could be difficult to achieve).

A majority of the Council would like to see ordinances to allow two ADUs per property and the conversion of one home to a duplex or triplex. The zoning changes would be addressed in the second phase of the project.

Staff will gather more public feedback this summer, but it appears unlikely this Council will consider zoning changes to allow duplexes or triplexes in single-family zones, before the next City Council election will take place in November. One can predict that the zoning revisions would be highly controversial and face strong opposition from current residents in the RR and RE zones

Lafayette

Town Considers Fee on Commercial Development: Since 2015 the City of Lafayette has imposed an affordable housing impact fee for residential development. Over time, that fee has risen from 30 cents per square foot to $1.00 per square foot. Now staff is proposing a new fee on commercial development of $1.00 per square foot.

The fee was recommended by the Livable Lafayette Task Force, which was convened by City Council in 2016. The Task Force recommended both an increase in the affordable housing residential impact fee and the newly proposed fee for commercial development.

According to a staff memo prepared for the City Council meeting on June 18, “Staff has found that non-residential development is associated with the generation of new jobs, which at various levels, including low- or moderate-income levels, decreases the amount of housing availability and affordability. Staff has also found that the number of affordable housing projects the City is working towards has exceeded initial expectations, while the costs of the projects continue to rise.”

The Town purchased 24 acres on the east side of town in 2016, known as Willoughby Corner. This project is a partnership with the City, Boulder County, and Boulder County Housing Authority to build an estimated 400 affordable residential units. The City is responsible for the purchase price, $3,495,000. Fritz Sprague, the City Administrator, says the Council believes that the proposed commercial fee will help defray the cost of that project, as well as future ones.

He also said that the Town will conduct a comprehensive impact fee review and assessment later this year. “If changes to the fee are necessitated, namely increases, staff will present that in a future resolution or ordinance.” The ordinance passed first reading easily; the public hearing will likely be held on July 2.

Note: Lafayette last week finalized the city’s Nine Mile Corner pact with Erie (https://tinyurl.com/y4sas8l6) freeing them up to initiate a large-scale commercial site of their own at the southwest corner of U.S. 287 and Arapahoe Road. In comparison, Boulder’s “linkage fee,” charges commercial development between $12.18 to $18.27 per square foot, depending on the type of use.

Longmont

Affordable Apartment Project Generates Opposition: The Kinzie multi-family project proposed for the intersection of Kimbark Avenue and Buckley Drive, which is now known as 2021 Kimbark, provided a test for the City Council’s resolve regarding affordable housing. The project would include 44 small rental units in a three-story building. The developers intend to deed-restrict ten of the units (nearly three times the number of units required by the inclusionary housing ordinance) while the remaining market-rate units would also be affordable at the proposed $700 a month rent.

The project requires staff, not City Council, approval because it is consistent with the Comprehensive Plan and wouldn’t require rezoning. However, some neighbors bitterly oppose the development, which they say would increase traffic and parking issues. Councilman Tim Waters requested an additional public meeting for Kinzie after meeting with constituents from his ward last month but didn’t attend although he was scheduled to offer introductory remarks at the meeting.

At that meeting, beleaguered city staff told angry neighbors that the Council would only be required to approve easement vacations for utilities and access. The neighbors have been showing up in force at recent Council meetings to voice their concerns. They had another opportunity on June 11 when the vacation ordinance faced its first hearing. They repeated their complaints about the project during the public comment section of the agenda, but the Council passed the ordinance on first reading without any discussion.

On June 25 the City Council held the final and public hearing on the vacation easement ordinance, which passed unanimously with a 6-0 vote. (Councilmember Bonnie Finley was absent). In addition, the Council approved an inclusionary housing agreement by resolution. In the agreement, the developer committed to providing the ten deed restricted units. The resolution passed 5-1, with Mayor Bagley opposed. He said he was worried about “sticking poor people into shoeboxes.” He described the 300 square foot units as too small and argued the project was not the “type of development we want in Longmont.”

Council Continues Moratorium Discussion: On July 11 the City Council had a disjointed discussion concerning a proposed development moratorium to allow the City staff to finish drafting a sustainability evaluation system (SES). The moratorium concept had been proposed on May 21 by Councilman Tim Waters, who has pushed for the SES tool since his election last year.

The Council made no formal decision to impose a moratorium on the 11th but unfortunately the idea wasn’t definitively ruled out, either. Representatives from Longmont Area Economic Development and the Longmont Chamber spoke in opposition to a moratorium. Developer Wendell Picket called the concept “a cold bucket of water” and said developers were more than willing to work with the City on the SES system. However, supporters of a moratorium, which some called “a short-term time-out” were also present. Former City Manager Gordon Pedrow argued it was “crap” to suggest a moratorium would destroy the City’s economy.

On June 25 Joan Peck made a motion to lift the moratorium, saying the issue had raised too many concerns. Mayor Bagley reminded her that there had never been a moratorium in place so there was no need to make a motion. Councilman Tim Waters explained that he never intended to ask for a moratorium, but simply wanted a “time out from development.” Finally, a motion was made and approved unanimously to end any attempt to adopt a moratorium.

Prairie Dog Ordinance Impacts Property Owners: On June 11 Planner Don Burchett asked the City Council to consider amendments to the prairie dog ordinance approved in January. Residents have complained about prairie dogs migrating onto their properties, creating damage as they dig new burrows. In additional, a daycare facility has incurred expense caused by prairie dogs moving from an undeveloped parcel of land onto the daycare’s playground.

As currently written, the ordinance prohibits exterminations and relocations from April until June. In addition, the ordinance includes minimum notification and wait times before permits for exterminations can be issued. It takes time to hire an exterminator and the ordinance requires more time for public notice if the property contains more than 25 prairie dogs, as is the case for the daycare property. The ordinance does not differentiate between developed and undeveloped properties, which has led to the issues described above.

Mayor Brian Bagley expressed frustration with his fellow council members, who were attempting to articulate revisions to the ordinance from the dais. He said the Council had spent a year developing the ordinance and yet there were still negative intended consequences. He argued the staff should simply be directed to come up with fixes for the problems without Council micro-management.

Mayor Pro Tem Polly Christensen argued that the Council was simply offering policy guidance. After a lengthy discussion, Tim Waters moved that staff should be directed to bring back changes that would allow “owners of developed property to do what they need to do.” That motion passed unanimously.

Weld

Firestone

Town Board Approves Water Deal: Firestone’s Town Board approved a resolution on June 12 that will allow developers to satisfy their water dedication requirements west of Interstate 25. Because of the limited availability of Colorado-Big Thompson (CBT) water shares, there hasn’t been development west of I-25 on vacant property annexed into the Town.

The new agreement is similar to an agreement the Town already has with the Little Thompson Water District, which led to the development of Barefoot Lakes, and will allow Left Hand Water District (LHWD) to be the retail provider of water to developers. With this agreement, the Town will not bear the cost of water service; it will be paid for by the developer and then the customers receiving service from LHWD.

According to Christopher Smith, the Manager for LHWD, the ability to transfer the units between users anywhere within Northern Water’s multi-county service territory without going to water court gives Colorado-Big Thompson water its investment value in booming building markets like the Front Range has experienced in recent years. In an article in the Times-Call,  Smith said that once Northern Water’s Northern Integrated Supply Project (NISP), is built, providers may routinely transfer water shares available to support development when a town has a proposal before it but has no available water to let a developer pay cash in lieu of dedicating new shares.

STATE

Governor Vetoes HOA Management License Bill: Governor Polis vetoed HB-1212 “Recreate Homeowners’ Association Community Manager Licensing.” According to the Colorado Sun, an administration spokeswoman said the governor’s background as an entrepreneur makes him “acutely aware that there is more that we can do to cut red tape and streamline regulation.” And a major concern are costs paid by professionals that are passed along to consumers. “Adding extra costs to HOA fees … is not the best path forward as the costs do not outweigh the benefits,” she said.

Democratic legislators who sponsored HB- 1212 to extend licensing for 1,617 managers of homeowner associations, or HOAs, for one year were critical of the veto. “The governor’s veto has reduced protection for consumers who live in managed communities and I plan on working to restore that protection,” said Sen. Rhonda Fields, an Aurora Democrat and bill sponsor in a statement.

The veto defied the 2017 sunset report from the Division of Real Estate that recommended extending the regulations with changes to help make sure the people who manage HOAs are competent. The legislation was designed to continue the program while interested parties discussed the issue before the 2020 session.

In his announcement, Polis said the regulations helped protect consumers in “very few instances.” But the sunset report found in fiscal year 2017 that regulators issued 12 cease-and-desist orders, eight letters of admonishment and censured two individuals. One license was denied, and one other was revoked. The state also issued seven fines totaling $5,750.

According to the Division of Real Estate, 44 percent of Colorado residents live in communities governed by HOAs. The Governor has issued an executive order to require the state to study HOA regulations before the 2020 legislative session.

The Division of Real Estate issued a statement on June 4, “The CAM licensing program will end at the Division of Real Estate (Division) on June 30, 2019, and the Division will no longer have any jurisdiction over community association managers and related management companies. The Division will cease to enforce any licensing, investigations, insurance, and continuing education requirements regarding this program, effective immediately.”

Governor Polis released a letter explaining his rationale for vetoing HB-1212, saying” Before any unregulated occupation is to be regulated, or any regulated occupation is to be continued, the state should complete its due diligence to ensure that regulation will, in fact, ensure consumer safety in a cost-efficient manner. This bill does not meet that threshold.” The letter also expressed concerns related to DORA’s sunset report saying none of the recommendations from that report were included in the bill, including allowing the division to establish renewal fees, changing definitions and repealing references to private or professional credential requirements.

Note: CAR supported HB-1212.

NATION

Congress Passes VA Loan Bill: The President is expected to sign H.R. 299, the “Blue Water Navy Vietnam Veterans Act.” This legislation includes language which will eliminate the cap on the VA home loan guarantee. Veterans, under this legislation, will be able to purchase any home they qualify for using the VA home loan (with zero down payment).

As introduced, the legislation would slightly increase some of the guarantee fees for all veterans using the VA loan program, in order to pay for the healthcare component. NAR opposed this language, and in conjunction with other groups, was able to mitigate the impact of these increases. NAR will continue to work with the VA on implementing the loan limit provision and assuring all veterans have access to the home loan benefit.

House Committee Passes Flood Bill: On June 12, 2019, by a unanimous vote of 59 to 0, the House Financial Services Committee approved HR 3167: the National Flood Insurance Program (NFIP) Reauthorization Act, sending the bill to the U.S. House of Representatives for consideration.

The NFIP Reauthorization Act would extend the program for five years and include significant reforms to strengthen flood mapping, enhance mitigation investments and remove several barriers to private flood insurance options. It easily cleared the first hurdle of the legislative process because it was the product of extensive, bipartisan negotiations between Chairwoman Maxine Waters (D-CA) and Ranking Member Patrick McHenry (R-NC).

NAR supported committee passage because the bill represents a long-term solution to NFIP and a breakthrough of the two-year deadlock that has resulted in 12 short-term extensions and two brief lapses so far.  The bill is not only a sensible, bipartisan pathway forward, but also includes numerous NAR-championed provisions and is consistent with long-standing NAR policy principles.

Next, the House of Representatives must vote on the measure, but the timing is not yet clear. NAR will urge the House to take up the NFIP Reauthorization Act at the first available opportunity and move the bill to the United States Senate. Currently, NFIP’s flood-insurance-writing authority is next set to expire on September 30, 2019.

Note: Remember, flooding doesn’t just happen on the coast. In Colorado, there were 1,174 flood events between 1996-2016, including the catastrophic 2013 flood. Over 2,160,005 homes are in a floodplain, according to NAR data and only 1 percent of those homes have flood insurance. The average Colorado NFIP claim payment is $254,509.

 

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