Fight over rent control surfaces at state Capitol

The latest to make the list of bills Gov. Jared Polis might not like is a measure from two first-year Democratic House members, backed by their leadership, that would strike down the state’s ban on rent control.

While Polis has signed two bills in the last two sessions tied to rent control, he did so only after veto threats to the sponsors if they didn’t modify the language to his liking. With 33 new lawmakers, the 2023 session is expected to be a rollercoaster, with highs and lows for the new lawmakers as they find out what the governor is willing to accept — or not.

Colorado’s prohibition on rent control dates back to a statute adopted in 1981, in response to a 1980 citizen initiative in Boulder that imposed rent control, and a 2000 Colorado Supreme Court decision called Town of Telluride v. Lot Thirty-Four Venture, LLC.

The 1981 state law said rent control on private residential housing is a matter of statewide concern; hence, local governments cannot enact ordinances or resolutions that would “control rent on either private residential property or a private residential housing unit.”

The Supreme Court followed up in 2000 with a decision to strike down a 1994 ordinance adopted by the Town of Telluride regarding affordable housing. That ordinance imposed what’s known as “inclusionary zoning,” requiring developers to create affordable housing for low-income individuals. The Telluride ordinance mandated that affordable housing be made available to 40% of the employees generated by new development. Owners could construct new housing units with fixed rental rates, pay fees in lieu of housing or convey the land to the town for affordable housing.

That’s rent control, in violation of the state law, the court concluded.

Democratic lawmakers in 2019 tried to rewrite the rent control statute to allow local governments to adopt ordinances or other measures they argued would stabilize rent on private residential property or housing units. But, lacking enough votes to pass, Senate Bill 225 died on the Senate floor at the end of the session.  

Two years ago, the General Assembly approved House Bill 1117, which clarified the state law to say that inclusionary zoning is not, in fact, rent control.

The legislation effectively undid the Supreme Court's Telluride decision. 

Kevin Bommer of the Colorado Municipal League, which backed HB 1117, said the original 1981 statute was not on land use and was, in fact, based more on what lawmakers thought at the time was going to happen around traditional rent control.

The 2021 law faced a veto threat from the governor, Bommer said, but the bill was eventually crafted in a manner that Polis could sign it.

Polis also threatened to veto last year's House Bill 1287, which initially would have imposed a cap on rent increases, based on inflation, at mobile home parks. The bill was watered down to prohibit landlords from hiking rent at mobile home parks if the landlord’s registration with the state is “not in good standing.”

The most recent effort on rent control comes in the form of House Bill 1115, sponsored by Democratic Reps. Javier Mabrey of Denver and Elizabeth Velasco of Glenwood Springs, as well as Sen. Robert Rodriguez of Denver. The measure seeks to strike down the 1981 statute in its entirety. Joining Mabrey and Velasco are 20 fellow House Democrats, including House Majority Leader Monica Duran of Wheat Ridge.

Both sides of the argument have perennially offered points for or against rent control.

A 2019 Stanford University study on San Francisco's housing situation suggested rent control negatively affected the city's stock of low-income housing units.

"Landlords treated by rent control reduce rental housing supplies by 15% by selling to owner-occupants and redeveloping buildings ... while rent control prevents displacement of incumbent renters in the short run, the lost rental housing supply likely drove up market rents in the long run, ultimately undermining the goals of the [San Francisco] law," the study said. 

Supporters, on the other hand, argue that rent control protects tenants, promotes lively cities, and reduces one of the biggest sources of rising inequality.

Only California and New York have laws allowing rent control, although about 200 cities also have similar regulations. 

Rodriguez, who sponsored the 2019 bill, told Colorado Politics that rent control is not a one-size-fits-all solution to the state's housing woes, which look different depending on the community.

"We have a housing and affordability problem," he said, adding there are different tools to fix it.

Rent control "isn't going to fix everything," he said. "I'm not here to tell counties what's good for their communities."

He added: "We need to look at different solutions ... I don't think every community will choose to do this. If there's something that will help, that's the direction (to take)."