Colorado voters in 2020 will likely be asked whether to hit the brakes on development.
The state Title Board on Oct. 2 approved language for a 2020 ballot measure that would impose growth limits on new private residential housing for at least two years in some of Colorado’s fastest-growing cities. While the measure hasn’t been approved for circulation yet, proponents and opponents alike predict it will reach that stage and gain the signatures needed to be on the ballot. The issue is bringing together two regional concerns: growth vs. cost of living.
If adopted, Initiative 122 would cap growth of privately owned housing in 11 Front Range counties at 1% annually for 2021 and 2022, and the limits would stay in place after that unless amended or repealed through referendum. The measure allows slightly higher growth limits for affordable and senior housing, and municipalities outside the specified counties would have the right to set their own limits through initiative and referendum. Voters in Lakewood, Colorado’s fifth-largest city, approved a similar measure in July.
FAMILIAR COMPLAINTS
The driving force behind the proposed ballot measure is Daniel Hayes, a longtime crusader for housing growth limits. Hayes, a resident of Golden, managed to get a similar law passed in his city in 1995, and he has been pushing for a statewide initiative ever since.
“My mom was a land developer and my dad built subdivisions, so I’m kind of odd,” said Hayes, who owns and manages 20 properties in the metro area. He insists his proposal isn’t meant to keep his rents or home values high by limiting available housing. He said his motivation is the “out-of-control” growth that has clogged highways and replaced open space with housing developments.
“We could end up with three L.A.s,” Hayes said. “Fort Collins to Colorado Springs could just be one solid, big city, and it could be huge. Is that what we want?”
While complaints about traffic, crowding and strained infrastructure are familiar to anyone living along the Front Range, so are concerns about the lack of affordable housing. Opponents of the initiative argue limiting the growth of housing supply will only push rents, prices and homelessness rates higher.
“That’s just simple Economics 101,” said Holland & Hart partner Jim Borgel, who represents commercial and residential real estate developers.
If housing becomes even more expensive, it could chip away at the competitive advantages that have contributed to Colorado’s robust economy, according to Borgel. He said part of the reason Colorado has been successful in attracting coastal businesses is because the state is competing with coastal cities on cost of living and housing prices.
Hayes said the initiative, which permits a growth cap of 1.15% each for affordable and senior housing, allows for more affordable housing than is being built now. The initiative defines affordable housing as that priced at least 30% below the average price for comparable units.
“There’s nothing keeping developers from building affordable homes, but they haven’t,” Hayes said.
TEST CASES
Hayes is happy with the results of the 1% housing growth limit he won almost 25 years ago in Golden. Thanks to growth limits, the city has maintained its “Western, small-town” charm, he said.
But opponents say the housing markets in Golden and Boulder, which has had a 1–2% cap on housing growth since the 1970s, are illustrative of the problems created by imposing limits. The median home sales price was $622,000 in Golden and $747,500 in Boulder in May 2019, compared to $400,000 in Denver, according to statistics compiled by Common Sense Policy Roundtable.
“I think it’s pretty apparent if you look at the housing market in those two cities that affordability is a real significant issue,” Borgel said.
Lakewood passed its own measure to limit residential construction to 1% of current housing stock in a special election in July. Borgel is already anticipating legal issues for some of his clients with projects there. One developer for a master-planned community in Lakewood that had vested property rights now faces uncertainty, he said.
“There’s a real question as to whether that vesting that they negotiated very hard with the city, four or five years ago, is still valid in the context of this new ordinance,” Borgel said.
“It’s going to lead to a lot of litigation because developers that have vested property rights up and down the Front Range are going to have those same kinds of issues,” he said.
HURDLES AHEAD
In addition to lawsuits over specific projects, Colorado’s 90-plus home rule municipalities could stand in the way of a statewide growth cap. Borgel said he would expect cities to claim a growth-limiting statute violates their rights under the state constitution, and Hayes is bracing for a battle from home rule jurisdictions that could go to the Colorado Supreme Court.
There are other hurdles to clear before Initiative 122 goes before voters. Anyone who objects to the actions taken by the Title Board on Wednesday may file an appeal to the Colorado Supreme Court. Hayes expects to face court challenges over whether the proposition adheres to the single subject rule for ballot questions.
At Wednesday’s Title Board rehearing, Recht Kornfeld shareholder Trey Rogers, representing registered elector Scott Smith, argued that the provisions for affordable and senior housing are separate subjects meant to appeal to different factions of voters, thereby violating the single subject requirement, but the Title Board disagreed.
After the ballot title gets the approval of the court and the secretary of state, Hayes will be able to start circulating petitions to collect signatures.
TIME TO SIGN
When Hayes last fought for a statewide housing growth cap, he was trying to get an amendment on the 2018 ballot. But Colorado’s Amendment 71, which was approved by voters in 2016 and imposed stricter signature requirements for constitutional amendments, prevented Hayes from gathering enough signatures in time. Under Amendment 71, Borgel said, “you have to be able to go throughout the state and get signatures as opposed to just standing in front of a King Soopers in the metro area.”
Hayes is trading the durability of an amendment, which is harder to repeal, for easier petitioning with his latest proposition. He’s not worried about getting the 124,632 signatures he needs.
“Oh, I’ll get the signatures,” Hayes said. “The signatures aren’t hard. You stand in front of a store, or wherever you’re at, and you say, ‘Would you like to sign the growth proposal for the Front Range?’”
“Now the question is, will they vote for it with all the brainwashing that’s going to come from the developers’ TV ads?” he said. Borgel said he suspects the petition will be circulated and get the signatures needed. If that happens, the real estate industry and local business community will likely mount a substantial, and costly, effort to defeat the initiative, he said.
“Frankly, those resources could be much better spent by trying to address some of the real issues associated with growth,” said Borgel.
— Jessica Folker