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


Boulder County
Council to Consider Revising Occupancy Regulations: The City Council decided it wants staff to make revisiting occupancy regulations a priority, moving parking and gas & oil legislation to the back of the list. The Council’s decision to revisit occupancy limits is based on the pressure from activists to allow higher occupancy as a means to house more people. The City Attorney warned the Council it won’t be easy to come up with an easy solution saying there are too many exceptions and grandfathered homes, making the effective occupancy much higher than it appears on paper.

Councilmember Bob Yates said the real problem behind occupancy limits is “access and affordability, not just numbers. There must be a proven path to affordability.” Aaron Brockett said he disagreed with Yate’s analysis of the issue but didn’t elaborate. Rachel Friend warned her colleagues that “either we solve this, or the community will solve it for us (with a ballot measure.)”

After discussion, there was consensus to direct staff to move forward with a plan to evaluate the occupancy standards and possibly suggest changes. While not all members of the Council were pleased with the decision. it was clear they prefer to have the staff find palatable solutions rather than face another ballot measure in 2021.

Council Pushes for Rental Licensing: The Longmont City Council voted 5-2 with Mayor Bagley and Councilman Tim Waters voting against the motion, to direct staff to research rental licensing. The Council seems to believe that rental licensing would solve some of the complaints the City has received related to accessory dwelling units (ADUs) and short-term rentals (STRs). They said ADU and STR regulations are not enforceable.

Assistant City Manager Joni Marsh told the Council the staff has no idea how many dwelling units are rented in City or if a licensing problem would pay for itself. Currently, code enforcement has one full-time employee.  A rental licensing program would include inspection of all rental units on an annual basis; more full-time staff would be needed.

On the face of it, rental licensing doesn’t seem necessary. Take ADUs for example. Most complaints relate to ADUs in the east and westside historic neighborhoods. The size and scale of some ADUs and the five-foot property line setback seem to be the biggest issues. How would rental licensing help?

Owners of STRs are required to get a permit. That should provide the needed information if enforcement is needed, so why do some Councilmembers say the City doesn’t know who to contact when complaints arise?

A rental licensing program would cast a wide net, requiring all landlords to spend more time and money to comply. If the problems Council wants to solve relate specifically to ADUs and STRs, why not revise those regulations rather than create a whole new program that would necessitate more staff to enforce licensing requirements?

CDOT Pursues Front-Range Rail: Thanks to legislation enabled in 2018, The Colorado Department of Transportation has been tasked with studying the feasibility of a front-range rail line from Fort Collins to Pueblo. At that time the Colorado General Assembly allocated $2.5 million to pay for the Front-Range Rail Commission.

Ironically, CDOT cannot fund its $9 billion backlog of transportation projects but the rail project has its fans, including Governor Jared Polis who supports the train as a way to reduce greenhouse gas emissions. According to rail commission analysis, it would cost about $22 for a one-way ticket from Colorado Springs to Denver. In 2019 it was estimated that building the entire line would cost somewhere between $5 and $15 billion.

Even now, after COVID has affected state revenues, the Director of the Rail Commission, Randy Grauberger remains undaunted. He says the rail line could be built if Colorado receives federal funding as well as revenue from the State, which would likely be generated by a new tax paid by Front Range voters.

CDOT released a paper on initial model results at the end of August. The paper estimates a train could provide 23.4 million passenger trips a year. The biggest demand would be met by transporting people within the Denver/Boulder, Fort Collins or Colorado Springs regions.

That doesn’t mean front-range rail doesn’t have its critics. Senator John Cooke (Greeley) calls it a “boondoggle.” Henry Sobanet, former budget director for Republican and Democratic governors says there’s not enough money to pay for a multibillion-dollar rail line and billions of dollars in roadway improvements. In the meantime, Rail Commission is forging ahead.

Note: Is Mr. Grauberger naïve to think front-range voters would tax themselves for rail given RTD’s recent budget crisis and the FasTracks debacle?

State Eviction Moratorium: Governor Jared Polis ordered a moratorium on evictions for 30 days as of October 21. The executive order states tenants cannot be evicted due to nonpayment of rent due to COVID hardships. The order does not apply if a tenant poses a serious threat, commits a violent felony, or causes “serious” property damage.

While the order is only in effect for 30 days, the Denver Gazette reported the Governor intends to renew it until the end of the year. Landlords can request financial assistance for lost rental payments. According to the Governor’s Eviction Prevention Task Force, which recommended the moratorium, 95 percent of renters paid their rent on time in September and delinquencies are up 2 percent compared to 2019.

Draft Greenhouse Reduction Roadmap Released: As part of the Polis Administration’s goal to reduce greenhouse gas emissions, the State’s Energy Department released its draft Greenhouse Reduction Roadmap (aka Roadmap) at the end of September. If the Roadmap is adopted, its implementation will ultimately affect every Coloradoan who drives a car or owns a home.

Vehicles are one of the largest sources of emissions. The Roadmap envisions a transition to 100 percent electric cars on the road in 30 years (by 2050). Electric vehicles accounted for 2 percent of Colorado’s auto sales in 2019.

According to the Roadmap, “While Colorado’s electricity and transportation sectors are the top two sources of climate warming pollution, fuel use in residential, commercial, and industrial buildings is not far behind.” It calls for the expanded use of “clean electricity” as an alternative to fossil fuels, which it argues “could bring consumer cost savings.”

How consumers will afford electric cars and homes heated by electricity remains to be seen. Currently, neither are affordable for the average resident. Public comments on the draft Roadmap are due November 1.

More on Eviction Moratorium: Recently NAR President Vince Malta and other NAR leaders met with officials from the White House offices of the Domestic Policy Council and the National Economic Council to discuss the CDC eviction moratorium. President Malta outlined NAR’s significant concerns with the order and the burden it places on housing providers.

Malta explained that “kicking the can down the road” and creating mountains of debt for renters would simply lead to a flood of evictions come January. REALTOR® leaders presented anecdotes about the more than 40 percent of mom and pop owners around the country and how they are struggling to meet their obligations without rental income. They also explained about the confusion surrounding the order and how it is being interpreted very differently by different courts.

During the Q&A, REALTORS® asked what relief would be provided to property owners – who were ineligible to receive unemployment or PPP or EIDL loans to make up for their lost revenue. White House staff said the Administration is committed to an additional stimulus bill and are working with Congress. They are open to including rental assistance. In the absence of Congressional action, the Administration is also working to prioritize funds for more relief and will consider a rental assistance program as part of that. President Malta thanked the White House for their time and attention and offered NAR’s expertise as they move forward with further relief measures. The White House thanked NAR and REALTORS® for the dialogue.

NAR on Proposed Seasoning QM Rule: NAR’s submitted a response to the Consumer Financial Protection Bureau (CFPB) regarding its notice of proposed rulemaking (NPRM) on a Qualified Mortgage (QM) seasoning rule. Under the rule, loans that meet product restrictions are held on bank’s portfolios for at least three years (e.g. season) and experience no more than two 30-day delinquencies and no 60-day delinquencies will gain the preferred safe harbor legal status versus their initial rebuttable presumption QM or non-QM status.

NAR commented that:

  • A seasoning rule may improve liquidity of mortgages (we supported the small-lender rule), particularly for borrowers with income or employment that are more difficult to document;
  • CFPB should analyze and monitor for difference in risk taking by large banks vs small banks. The assumption is that holding the loan in portfolio aligns incentives, but if the bank is too-big-to-fail, it might circumvent this design;
  • CFPB should reform the QRM rule to allow and incentivize investors to push back dangerous loans that are designed to circumvent the QM rule.

SBA To Begin Processing PPP Forgiveness Applications: The U.S. Treasury Department has announced that the SBA will begin processing PPP loan forgiveness applications, following a delay which left many caught in a backlog.  PPP borrowers are eligible for forgiveness if they meet the program’s requirements, which include using at least 60% of the funds for payroll costs and the remainder for other eligible uses (including rent, utility bills, and mortgage interest) during the covered period. For full forgiveness requirements, visit PPP borrowers should submit their forgiveness applications directly to the SBA lender with whom they worked, who will then pass them to the SBA for processing.  For detailed instructions on how to fill out the PPP EZ Forgiveness application form, watch NAR’s step-by-step video.

Supreme Court Orders End to Census Counts: The Supreme Court ruled that the Census Bureau was required to stop all census counts by October 15, 2020. The Court issued its opinion ruling in favor of the Trump Administration after weeks of ongoing litigation on this issue. In late September, many advocacy groups filed a lawsuit against the Commerce Department seeking an injunction to prevent census counts from ending on September 30, 2020. A California federal court heard the issue and ruled in favor of the advocates and granted an injunction and ordered the Commerce Department to continue counts through October 31 and also order the Department to disregard the December 31deadline for when the total enumeration is due to the President. The Trump Administration filed appealed and also filed an emergency request asking the Supreme Court to rule on the issue. The Census Bureau ended counts yesterday and now must meet the December 31 statutory deadline.

There are many concerns regarding the accuracy and integrity of the data collected by the Bureau given the time constraints and pandemic-related impacts to its field operations. NAR along with other advocacy groups support Congress extending the statutory deadline to ensure a complete and accurate population count. NAR supports the Census Deadline Extension Act which is bipartisan legislation to extend the statutory deadline for when the Bureau must provide the total apportionment count to the President, Congress, and States.

NAR continues to monitor this issue and will provide additional updates.

 CFPB Rescinds RESPA Bulletin on MSAs: The Consumer Financial Protection Bureau (CFPB) rescinded the October 8, 2015, Compliance Bulletin (2015-05) which curtailed the use of Marketing Services Agreements (MSAs). Instead of replacing the Bulletin with another interpretation of the Real Estate Settlement Procedures Act (RESPA), the Bureau updated their Frequently Asked Questions (FAQs), recognizing industry best practices and focusing on a facts and circumstances analysis for determining RESPA compliance. The updated guidance includes common scenarios and examples that address RESPA compliance questions related to MSAs, as well as gifts and promotional activities.

NAR has long advocated for the withdraw of this bulletin, including last month in an industry coalition letter, to increase regulatory certainty. The Bureau’s actions are welcomed to enhance RESPA compliance and NAR will continue to engage with the CFPB in the development of resources to provide additional industry clarity on these issues.

The SBA is expected to quickly approve forgiveness applications for loans less than $2 million, with reports that the backlog may be cleared in as little as two weeks.  PPP borrowers have 10 months from the end of their loan’s covered period to apply for forgiveness before any payments are due on the loans.

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