Sweeping Statewide Land Use Bill Introduced In Colorado Legislature

Lawmakers heard multiple hours of public testimony on Thursday about an ambitious bill known as the More Housing Now plan, which is aimed at tackling the state’s housing crisis. The event kicked off formal discussion for what Gov. Jared Polis has called “the most ambitious land-use policy changes in Colorado in about 40 years.”

Senate Bill 23-213 would incentivize the construction of new housing units by preempting local laws that regulate the construction of accessory dwelling units, providing incentives for multifamily housing near public transportation options, and eliminating other “red tape” that prevents homes from being built, according to the bill’s text. 

Polis initially unveiled the plan March 22 and said in a press release it has earned the support of some environmental groups, businesses and local government officials. But the wide-ranging land use changes are seen as an overreach by some politicians, and the real estate community seems to be mostly staying out of the fray so far. 

Some Democratic lawmakers like Sen. Dominic Moreno of Commerce City support the bill because it can help local governments address Colorado’s growing housing unaffordability. Moreno said homes in his district sold for an average of around $180K a decade ago but are selling for around $400K today. 

“We need to be able to provide affordable housing for every income level and identify affordable housing strategies that can meet the needs of local communities,” Moreno said Thursday during the bill’s first hearing in the Senate Local Government & Housing Committee. 

The bill also requires municipalities to begin approving projects that meet its housing development aims. Cities can be granted an extension to upgrade their water and wastewater infrastructure. Moreno said these provisions could allow local districts to address the patchwork affordable housing requirements that exist in Colorado law. 

The bill would require Tier 1 cities such as Denver, Boulder and Colorado Springs to allow more multifamily housing construction and middle-housing units, which are defined as duplexes, triplexes or multiplexes. 

It also requires “all relevant cities” to adopt the state’s new land use provisions and requires them to submit a report to the Department of Local Affairs showing that their codes are compliant. The bill says the director of DOLA must set these reporting guidelines no later than Dec. 31, 2025.  

Further testimony from representatives from other parts of the state raised concerns, perhaps highlighting why a statewide land use change could prove tricky.

Sen. Dylan Roberts, a Democrat from Vail, said he has heard concerns from local officials in resort communities because the bill doesn't prohibit people from simply building second homes in places like Steamboat Springs and Vail. Colorado’s resort communities have struggled with housing for years, as hourly workers to staff these towns’ main draw, ski resorts, can’t afford to live in increasingly expensive mountain towns.

Sen. Barbara Kirkmeyer, a Republican from Weld County, said she was concerned about the bill preempting local land use regulations in favor of new state requirements. She added that there also isn’t a process for challenging any rules or regulations that come from the Department of Local Affairs regarding land use and homebuilding. 

“This is a very personal thing when you’re talking about someone’s personal property,” Kirkmeyer said. 

For its part, Colorado’s development community is quiet on the subject of a bill that could potentially reverberate across the state’s real estate landscape.

Of the 10 local developers contacted by Bisnow for this story, only one agreed to be interviewed. Industry groups had a bit more to say.

“There is no silver bullet to dealing with housing affordability or lowering the cost to build more homes,” Colin Dunn, a spokesperson for the National Multifamily Housing Council, told Bisnow in an interview. “But this plan addresses those issues from a number of different directions.”

Dunn added that the policies outlined in the bill show that Polis is planning for Colorado’s future growth, but it doesn’t address NIMBYism at the local level, which could derail the bill’s aims. 

One example is the strong statement issued by PLAN Boulder County, a group that advocates a “largely open, undeveloped, and scenic Boulder County,” according to its website. The group described the bill as “a large-scale power grab” in its latest newsletter. 

For some real estate developers like Carl Koelbel, chief operating officer at Koelbel & Co., the bill is a welcome sign that the state is willing to step in to expand the stock of developable land. Koelbel told Bisnow that he is “generally supportive” of the bill because it could also simplify the local permitting process and resolve some of the permitting backlog in cities like Denver.  

However, Koelbel added the bill does nothing to address Colorado’s construction defects laws, which have bedeviled developers in the state for over a decade by increasing the likelihood that they could be sued by condo owners, causing insurance rates to skyrocket.

In 2017, Colorado lawmakers passed a bill that required a majority vote among an entire building’s condo owners, rather than just a majority of the homeowners association board, in an effort to slow lawsuits and help shake loose new condo developments. That change has done little to fix the problem, however.

“We could see a major pullback from homebuilders simply because they can’t carry the insurance costs,” Koelbel said. 

At the same time, Koelbel said the construction defect issues for homebuilders could compound if other legislation like the state’s rent control or right of first refusal bills pass. Both bills have gained strong support from the Democratic-controlled General Assembly. 

“If those other bills pass, then this plan is a wasted effort,” Koelbel said.