Construction Defects: Will there actually be a fix in 2017?

Since 2001, construction defect legislation and litigation have had a significant impact on the construction of new affordable housing options in Colorado. Many developers, affordable housing advocates, and local officials attribute to the rise of construction defect cases to the decline of affordable owner-occupied attached housing in Colorado. Communities are faced with the decline of this housing stock in their communities and a large gap in affordable housing. This type of housing is not only popular for first time home buyers, but the aging population also is looking to downsize and, wherever possible, live closer to transit options.

Today, owner-occupied attached housing (condos)represents just 2 percent of new housing starts in the Denver metro area, compared to 20 percent in 2007. Because of this, would-be first-time home buyers, including young professionals, have significantly fewer options and are increasingly being forced into the skyrocketing rental market. The lack of condo options also leaves behind seniors who are looking to downsize from single-family homes. Rising rents all over the state of Colorado and lack of housing stock are amounting to a “housing squeeze” on Colorado citizens. The impact on low income families is even more severe.

Since the legislature has yet to adopt a statewide fix, several municipalities have adopted their own reforms. These communities include: Aurora, Arvada, Broomfield, Castle Rock, Centennial, Colorado Springs, Commerce City, Denver, Durango, Fort Collins, Lakewood, Littleton, Lone Tree, Loveland, Parker, Westminster, and Wheat Ridge. Each municipality designed a reform ordinance that they believe will work for their community. Solutions vary from allowing a developer a period of time to fix the issue, to utilizing plat notes, to creating barriers for suit involving specific building code violations.

However, this is not just a metro Denver issue. For example, several mountain towns are working to form a coalition to solve the issue in their communities. Even more rural, less populated areas are feeling the effect of the lack of residential ownership opportunities for their citizens.

The Colorado Municipal League supports common sense reforms to Colorado’s construction defect statute and that reform is in SB 16-156. This legislation creates a quick resolution process that is fair to homeowners who need repairs while protecting the rights of all owners in a community. CML is strongly advocating for the bill. At the same time, SB 17-157 as introduced provides a weaker change to the construction defect law while preempting meaningful reform at the local level, and the League is opposing this insufficient measure.

CML supports:

  • Alternative Dispute Resolution
  • Notice given to all unit owners
  • A simple majority vote of all unit owners before entering in a lawsuit

CML opposes:

  • Local preemption without a meaningful, comprehensive statewide solution

Construction defect reform is as important to local communities as it is to developers and contractors. There are clearly many forms a solution can take and local governments are already far ahead of the state in attempting to bring back condominiums in their municipalities. Municipal citizens need high quality affordable housing sooner rather than later, and local governments will continue to help provide that most basic of needs.

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The War to End Homelessness

Solving homelessness remains a top priority for municipalities. However, inflammatory, inaccurate rhetoric continues to portray as cities and towns “criminalizing persons experiencing homelessness.”

A report recently released by  the University of Denver, specifically the Homeless Advocacy Policy Project,  purports that Colorado municipalities spend roughly $5 million enforcing ordinances that criminalize homelessness.

First, CML disagrees with the initial assumption of the study that that these ordinances criminalize homeless. These laws involve time, place and manner restrictions used in every Colorado jurisdiction to protect the public space and to ensure the health, safety and welfare of all residents.  They address behavior and not status, and apply to all municipal citizens. Second, there are a number of flaws with the study that include not taking into account cases that may have been dismissed or ignoring municipal ordinances that set specific guidelines for law enforcement to connect homeless individuals with services. Third, the study does not take into account the millions of dollars in funding municipalities provide in services for persons experiencing homelessness. In Denver alone, $47 million dollars will be spent in 2016 on direct and indirect costs for services, an increase over prior years.  Municipalities like Colorado Springs, Boulder, and Fort Collins also have robust programs to reduce the number of homeless and address their specific needs.

Furthering the false narrative of a “war on the homeless” is legislation continually introduced in the Statehouse.  This year, HB 16-1191 is currently before the General Assembly and would create a “Bill of Rights” for these individuals. There are a multitude of issues with this legislation. Most significantly, the proposed bill does nothing to solve homelessness. It does not provide additional resources nor provides funding so local governments can continue to improve and expand services to those citizens in need.

CML opposes HB 16-1191, “the Right to Rest Act” not because municipalities care less about their vulnerable populations. On the contrary, cities and towns spend millions in services annually. Let’s change the conversation to expanding resources to get citizens housed and ending the cycle of homelessness.

 The Denver Post said it best. “No one is trying to sweep homelessness under the rug — not in Denver nor in many cities that are proud of their own initiatives.”

What Colorado needs are long term, collaborative state and local solutions to this very difficult issue, and Colorado municipalities’ efforts are currently leading the way.

A Perennial Proliferation of Pot Proposals

Nearly 30 days into the legislative session, and there are already at least ten bills that primarily address a proposed change in marijuana policy and another 13 that somehow mention legal marijuana in Colorado. More proposals are expected as the session progresses.

Proponents of legalized marijuana are often fond of saying it is supposed to be “treated just like alcohol.” (In truth, Amendment 64 declared that recreational marijuana is to be treated in a manner similar to alcohol)  And then the legislature has spent most of the last three years dealing with bills and proposals to treat it differently in nearly every phase from production to consumption.

Marijuana is most certainly similar to alcohol in one regard. Liquor legislation has been a regular feature in almost every legislative session since prohibition. Now, only a little over five years after the legalization of licensed medical marijuana and barely two years since the first retail store opened, there is significant pressure on legislators to continue to change the implementation of both in Colorado.

No place to go

Prior to Amendment 64, which passed in the November 2012 general election, it was generally understood (by most) that the consumption of medical marijuana, purportedly for medicinal purposes, was a private matter. There was little to no pressure to create legalized social structures for group consumption.  In their infinite wisdom, the drafters of Amendment 64 legalized possession, growth, and private use of marijuana, but created a constitutionally enshrined system that provided for retail sales that the whole world was invited to partake in. We built it and they came – but even before the first legal transaction at a retail store, people were already asking where they could congregate with other likeminded consumers.

Under the banner of private use, “private clubs” began to pop up in commercial settings, as local governments struggled to react to the issues instantly created: open and public use, zoning and land use conflicts, illegal transactions, and impaired driving. More recently, proposals among some around the Statehouse are to create a new, legalized method for public consumption, while trying to determine how such scheme would coexist with the prohibition in the constitution (left undefined) of open and public consumption. As of yet, there are no bill on this issue, but one legislator has contemplated the notion of “tasting rooms” appended to existing retail stores. Municipalities may have more to say about that if it is introduced.

Great American Beer Marijuana Festival?

In liquor law, special event permits are issued by local governments and the state for events at which alcohol will be served. The applicant must be of a non-profit nature, a political candidate, local government, higher education institution, or any number of other types of applicants that will not receive any “pecuniary gain.” Legislation introduced this session (HB 16-1092) would create a “special event permit” for marijuana, but the name was about the only thing similar to its counterpart in the liquor code. The legislation has a lot of problems, as introduced, but the goal of the proponents is to create a legal status for licensed retail stores to participate in a convention-style event, at which their product may be sold and consumed. Specifically, they want to create a legal path for the Cannabis Cup held at the Merchandise Mart in unincorporated Adams County at 58th Avenue and I-25. Municipalities are opposing the bill unless a number of changes are made, including a requirement that events are not allowed unless a municipalities specifically approves them.  And then there is that whole open and public consumption thing…

Protecting kids

Thanks to legislation last year that finally gave definition to the constitution requirement that personal growth of recreational marijuana allowed by Amendment 64 must occur in an “enclosed, locked space,” law enforcement has a means to help reduce diversion to young people, as well as theft or similar crimes. SB 16-080 would extend that same provision  to medical marijuana personal grows. Examples from law enforcement show open grows of medical marijuana just yards from schools, and there have been problems with theft and diversion.  Some municipalities require enclosed, locked spaces by ordinance, but a uniform statewide standard is appropriate in this case.

Protecting public health and other proposals

There is also a lot of chatter in the lobby about how to ensure that pesticides, otherwise prohibited and regulated by the state, are not used in a manner that endangers public health. While law allows for licensed testing facilities, they have been slow to start and the state has been woefully slow in getting rules and regulations in place. Local governments have been stepping up to fill that void, and some segments of the industry don’t like it. Unfortunately, they have spent the better part of the first quarter of the legislative session trying to figure out how to preempt local authority instead of moving the state more quickly to fulfilling its responsibilities.  Whether it be red tape or a lack of resources, the bottom line is that the state must move more quickly if people do not want local governments to take more immediate action to protect the public. While there is legislation that touches on the pesticides issues, none of it directly addresses the problem of lack of speedy implementation by the state.

Other legislation will correct an oversight in last year’s creation of a state license for medical marijuana testing facilities by ensuring that local governments will also be able to license the facilities, just like every other medical and retail license type. A recently introduced bill would add a new type of state and local license for “marijuana transporters.”  In this case, it is difficult to contemplate how a local license for a transporter would work if the deliveries are going across municipal and county lines. More investigation of this brand new bill will be necessary.

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