Close to 300 Bills Introduced in First 19 Days of Session
The General Assembly has been in session for three weeks, and already there have been almost 300 bills introduced. The legislature’s fast pace this year has included a slew of bills around housing policy. Housing is one of the Chamber’s top three policy priorities. Our workforce should have housing they can afford and be able to live in the communities in which they work.
The Chamber supports many of those bills, such as Senate Bill 1, which establishes a public-private partnership model and identifies underutilized state land to build housing. The Chamber also supports Senate Bill 35, which clarifies how the middle-income housing authority is operationalized, empowering it to be as effective as possible in fomenting housing development. We encourage the General Assembly to continue creating incentives-based models, cut regulations and reform zoning code, and we hope to work with them to fix construction defects litigation.
Rent Control Comes to Colorado
We do not align with every policy solution on this topic. House Bill 1115, introduced in the House last week, amends current state law which prohibits local governments from enacting rent control within their boundaries. If passed, it will permit municipalities and local governments to enact rent control, which would send a chilling effect through the housing market. As the saying goes – anything you restrict you get less of – and rent control policies keep overall rents artificially high by disincentivizing new construction. The Chamber took an oppose position on House Bill 1115.
Why We Oppose House Bill 1115
This bill will further exacerbate the housing shortage and drive up the cost of Colorado’s already unaffordable housing stock.
- In a severely under-built housing market, this bill will stall construction of new apartments and other for-rent development. The state should incentivize growth and work to bring housing units to market for all budgets—including the missing middle.
- Lifting restrictions on rent control is the first step toward a statewide mandate, which jeopardizes our already low housing stock, will drive up the cost of housing and diminish the quality of for-rent units in the state.
- Lifting the prohibition on rent control creates unintended consequences: a patchwork approach to rent prices distorts the market and creates artificial pressures across municipal boundaries. This will increase housing prices and disincentivize growth and development. Developers will be producing units for a market where rents are frozen, but the costs to build rental units is not; therefore, as building costs go up, they will be taking those costs out of their own bottom line. Further, their ability to compete with artificially low unit prices will disincentivize creating new product.
- Landlords of rent controlled units are less able to make necessary repairs, perform routine maintenance, and otherwise improve their properties. Where rent control is instituted, the quality of rental units decreases and blight and disrepair increase. Our workforce deserves to live in for-rent properties that will allow them the highest quality of life.
Rent Control Isn’t the Answer
While we acknowledge that rent prices have increased dramatically in the last few years, this sharp increase was due to simple economics: demand outstripped supply, and as a result, prices rose.
However, rents are now on the decline. According to the Denver Post, “Average apartment rents in metro Denver fell more in the fourth quarter than they did during the worst of the dot-com bust, the Great Recession and even the early months of the pandemic, with more declines likely as new units pour out into the market this year.”
This decline proves that increasing housing inventory decreases prices: simple economics – supply and demand. Last year, “developers delivered 10,992 new apartments, of which only 6,993 apartments were occupied or filled with a tenant.” As supply increases, prices decrease.
Rent control doesn’t work. Here is what will really drive down the cost of housing:
- Loosening zoning restrictions to encourage development of new housing units
- Cutting red tape and creating incentives for our development community to bring housing to market
- Reforming construction defects litigation so developers can once again build higher density condo units. Condominiums are more affordable, are a more efficient use of land, and provide the workforce with more choice in what type of home suits their lifestyle and needs.
The best guardrail against rising rents is a healthy supply of housing units—not a mandate that manipulates prices, exerts artificial pressures on the real estate market, and will create a patchwork of price interventions which will have a negative effect on our state’s housing market.
Seeking Member Advocacy on Employee Scheduling Bill
We are anxiously watching House Bill 1118 Fair Workweek Employment Standards because of its capacity to be detrimental to the business community should it pass.
What is it?
This bill changes scheduling practices for nonexempt employees who are employed by a business with at least 250 employees globally in food, beverage, or retail, or employers that provide those industries with janitorial, security or integral labor. It requires a 14-day advance notice of any new work schedule; bars employers from hiring additional staff until existing employees are scheduled for their desired number of weekly work hours, up to 40 hours a week or 12 hours a day, by penalty of six months of required retention pay to the existing employee; and entitles certain employees to predictability pay, rest shortfall pay and minimum weekly pay.
Why should we care?
This bill would have a significant and widespread impact on thousands of public and private sector employers and employees across Colorado. The bill creates new restrictions on scheduling practices, removes much needed flexibility in the workplace, and ultimately hamstrings those it is intended to help. Creating an employee schedule takes time, elaborate coordination, labor demand management, and often negotiating between an employer and an employee about availability and preference. The bill demonstrates a dire misunderstanding of the way retail, food and beverage, and related industries operate. In its current form, the proposed bill is entirely unworkable for Colorado businesses.
How YOU can help
House Bill 1118 is scheduled to be heard in the House Committee of Business Affairs & Labor on Feb. 16. It is urgent that we share with members of the committee the various business concerns we have about this proposal. Please consider using our advocacy tool and sharing how this might impact your business by clicking below.
In Other News… Let’s Talk Water!
Water is vital to the West and remains one of the most important, but complex issues we face. As less and less water has been flowing through the Colorado River and its reservoirs, US Bureau of Reclamation Commissioner Camille Touton last year called on the basin’s seven states – California, Arizona, Nevada, New Mexico, Colorado, Utah and Wyoming – to figure out how to cut 2-to-4-million-acre feet of usage, or as much as 30% of their river water allocation.
- The debates over how to cut water use by roughly one-third have been contentious.
- The Upper Basin states of Wyoming, New Mexico, Colorado and Utah have said the Lower Basin states — Arizona, California and Nevada — must do the heavy lifting.
- The seven states that rely on the drought-stricken Colorado River failed to meet a Jan. 31 federal deadline to strike a deal on voluntarily cutting their water use.
- After negotiations reached a standstill, six of the seven states — Arizona, Colorado, Nevada, New Mexico, Utah and Wyoming — submitted a “consensus-based modeling alternative.”
- The proposal notably excludes California, the largest user of the Colorado River. Officials said the state will release its own plan.
- Colorado Gov. Jared Polis on Monday said he is encouraged by the six-state agreement but there is more work to be done. “Although we did not cause this crisis, I am proud that Colorado is part of the solution.”
Even though the reaction from federal officials remains unclear about the six-state plan, Colorado continues to do its part in conservation. The Colorado Water Conservation Board unanimously approved the final 2023 Colorado Water Plan on Jan. 24. The plan updates the original 2015 version and helps set a vision for how the state, local governments and residents can address water challenges in the future.
The Latest on the Colorado Privacy Act
The Colorado Privacy Act was signed into law in 2021. This law created additional protections for the personal data of Colorado residents; changed the way in which businesses can collect, process and use personal data; and created new enforcement provisions. It’s been in a rulemaking phase with the Office of the Attorney General since it passed.
The Chamber has provided comments to the Attorney General during the pre-rulemaking making phase and in response to draft regulations released on Dec. 21, 2022, and Jan. 27, 2023. On Wednesday, we delivered testimony at the official rulemaking hearing.
A special thanks to Aloke Chakravarty, Partner at Snell & Wilmer and member of our Legal Advisory Council, for his immense support in helping to prepare the delivered comments. Also, we want to thank all the members who helped explain how the draft rules would affect their business. Those perspectives were integral to our submitted feedback and allowed us to justify the suggestions we were making.
The Attorney General plans on adopting final and official rules before July 1, 2023. We and other industry groups encouraged a longer delay between when the rules become final and when they become enforceable at Wednesday’s hearing. We expect the final rules to be released soon, barring the need for additional rulemaking hearings.
We will keep you posted when those rules are released and will share any available guidance on how best to comply.
Need a deeper dive into the Colorado Privacy Act? Read our previous blog post on the topic here: Rulemaking Process Impacts Data Privacy, Paid Leave and Colorado Health Plans
Bills We Took a Position On
- Senate Bill 51 creates the Office of Future of Work in statute and expands its duties. This bill also amends statutes to enable the U.S. Department of Labor’s Office of Apprenticeship to recognize Colorado’s state apprenticeship agency and modifies language to make this change.
- Senate Bill 56 makes full repayment to PERA for their entitled distribution established in 2020 by allocating an additional $35,050,000.
- Senate Bill 66 extends the Advanced Industry Export Acceleration Program and the Advanced Industries Acceleration Grant Program by 10 years. It also broadens eligibility for qualifying businesses to access an international export development expense reimbursement. Additionally, the Advanced Industry Export Acceleration program allows businesses to receive an international export development expense report, provided they meet eligibility requirements.
- House Bill 1078 creates a dependence allowance for an individual receiving unemployment compensation for each of the individual’s dependents. The allowance starts at $35 per week and increases annually for inflation. This bill also requires the division of unemployment insurance to report to the general assembly regarding the dependence allowance annually starting Aug. 31, 2025 and by Aug. 31 each year after.
- House Bill 1090 further prohibits any board member from acquiring any interest in debt from any entity with which the director of a residential special district has a conflict of interest.
- House Bill 1092 prohibits state money from being used to further certain social, political or ideological interests beyond what controlling state and federal law require. The bill limits PERA to make investments solely on financial factors and prohibiting them from investing in certain social, political or ideological interests and requires a government contract to verify that a company entering into a government contract doesn’t engage in an economic boycott of another company to further their social, political or ideological interests.
- House Bill 1095 amends current law to prohibit a rental agreement from including: an unreasonable liquidated damage clause stemming from an eviction notice; a one-way, fee-shifting clause that awards court costs and attorneys’ fees to only one party; and the clause must award attorneys’ fees to the prevailing party. The bill also prohibits a waiver of the right to jury trial or to join a class action lawsuit or the implied covenant of quiet enjoyment; a provision allowing a landlord to levy a fee if tenant does not provide notice of renewal prior to the end of the rental agreement; and a provision that requires a tenant to pay a fee in excess of the amount a landlord paid for a service.
- House Bill 1105 creates the HOA Task Force and the Metro District Task Force. The HOA Task Force is required to: study issues regarding homeowners’ rights, including HOA fining and authority, foreclosure practices, and communications with homeowners; prepare an interim report regarding its findings; and prepare a final report on or before Dec. 31, 2023. The Metro District Task Force is required to: study issues confronting metropolitan districts homeowners’ rights, tax levying authority and practices, foreclosure practices; and prepare a report regarding its findings on or before March 1, 2024.
- House Bill 1115 repeals a statute that prohibits counties and municipalities from enacting rent control on residential property.
- House Bill 1118 changes scheduling practices for nonexempt employees who are employed by a business with at least 250 employees globally in food, beverage, or retail; or employers that provide those industries with janitorial, security or integral labor.
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