Can rent control help solve Colorados housing affordability crisis?

For years, the idea of rent control in Colorado simmered at a low temperature. Advocacy groups have pushed for it, some lawmakers have nudged at it, but there was no broad political movement to cap rising rents.

Even as Minneapolis, St. Paul and the state of Oregon have enacted or are considering policies capping how much rent can be raised in a given year, Colorado has eschewed it. When one lawmaker proposed limited rent protections for mobile home residents last year, Gov. Jared Polis threatened to veto it. A state law, on the books for more than 40 years, prohibits local governments from enacting any form of rent caps.

“It’s important to remember — this housing crisis we’re in right now, this affordability crisis, it’s actually a very new thing,” said Brian Connolly, a lawyer who works in land use policy and has taught at the University of Colorado law school. “Even five years ago, there was such little conversation — even though it was a problem — so little conversation about housing affordability and how we address this.”

The problem is not what it was five years ago. The housing crisis in Colorado has come to a head, several state and local officials say, prompting broader conversations about how to address it. The lessons of the pandemic — which required tens of millions of dollars of federal intervention to stave off mass evictions — and broader questions about the state’s role in addressing a statewide problem have reframed the housing debate.

Rent for Denver apartments increased more than 14% between 2021 and 2022, according to one survey. Another found that suburban rents had jumped 25% on average since the pandemic began.

When lawmakers return to the capitol this month, housing will be a dominant topic, and advocates — and some lawmakers — say there is more momentum around including rent caps in that debate than there has been in years.

“People are working two to three jobs to try to pay rent in units that are often dilapidated, and we have to do something about that,” said Rep.-elect Javier Mabrey, an eviction defense attorney newly elected to represent Denver in the statehouse. “We have to do something about it. Yes, it means building more affordable housing, but I do think there’s an appetite to giving communities the ability to pass rent stabilization, rent control.”

If enacted, a rent control or stabilization policy would cap residential rent either to a dollar amount or set a ceiling on annual increases. These policies often come with exemptions for newer buildings to incentivize development. In Oregon, for example, landlords can only raise rent by 7% plus inflation in a 12-month period. In St. Paul, the annual cap is 3%. New York famously has decades-old rent control and stabilization policies, while San Francisco has strict limitations on covered units, including that landlords must be licensed to increase rent.

The argument for rent protections is simple: Tenants live at the whim of developers and landlords who can otherwise raise rents as much as they wish, at a time when the state is facing a housing shortage, record inflation and the aftershocks of a devastating pandemic.

“Everyone deserves a safe and stable home, where they can raise their families, they can make connections and really set down roots in their neighborhoods,” said Carmen Medrano, the executive director of United for a New Economy and the co-chair of Colorado Homes for All. “And with the increases of rent, it is pushing communities to move out of their neighborhoods, their cities and even the state.”

The argument against the policy is simple, too: Capping what landlords and developers can earn on their investments will harm development, opponents say. Indeed, the city council in St. Paul overhauled its program in September to allow for more exemptions, just months after the policy was put into place. Landlords subject to stabilization policies have turned apartments into condos, further limiting supply. Researchers at Stanford who examined the impact of rent control in San Francisco found that “landlords do not passively accept the burdens of the law”; the availability of units declined and rent “likely” increased as a result.

Rent control is attractive because it’s easily understandable and direct, said Peter LiFari, the CEO of Adams County’s Maiker Housing Partners. Tenants and advocates can touch it, more so than debates around land use or funding for programs that may take years to materialize.

“If you are experiencing the toxic outcomes of being a victim of rapidly increasing rents, rent gouging, price gouging — this is your salvation,” he said.

Still, LiFari was wary of the policy. He favored a supply-side solution: more units, more density, built faster. Connolly, the lawyer and university professor, said it would be “disastrous” to enact rent control without addressing the state’s supply issues.

For their part, supporters say rent caps wouldn’t be the only solution but part of a push to address housing affordability generally. More to the point, Mabrey and others say, the legislature shouldn’t be blocking local governments from enacting the policy, anyway.

“As long as this housing crisis continues to crunch our state, legislature and the state are going to have to answer for how they are responding to exorbitant rent increases in this state,” said Robin Kniech, a Denver city councilwoman.

Local versus state

The statewide prohibition, passed by the Colorado legislature in 1981, means the path to rent protections here runs through the Capitol. That fact presents advocates and supporters with two options: Lawmakers could nix the prohibition, as some unsuccessfully attempted to do in 2019, and leave it up to local governments to decide whether to institute rent increase caps. Or they could enact a statewide policy of their own, as Oregon did nearly fours ago.

The first approach — clearing the way for local governments to intervene should they choose — is more politically feasible, officials said. It calls for local control, and several officials said city and county leaders are best positioned to decide what’s right for their community. Kniech said she regularly hears from constituents who want a government response to rising rents, unaware that state law ties local leaders’ hands.

“There are choices here. Lead or get out of the way and let local communities lead,” Kniech said. “But the failure to lead is really harming renters in our state, and we are seeing record profits from mega owners of these properties.”

When lawmakers tried to repeal the ban on local rent control in 2019, the four-page bill died a quiet death in committee. Rep. Serena Gonzales-Gutierrez, who sponsored that bill and is now running for Denver City Council, said she wanted to see exact language on any proposed repeal before committing to supporting it.

“There are a lot of inequities when it comes to landlord and tenant relationships, and those are things that need to be continued to be worked on,” she said. “I want to make sure we’re continuing to level the playing field.”

Two other lawmakers who also sponsored the 2019 bill to repeal the ban, Democratic Sens. Julie Gonzales and Robert Rodriguez, did not return requests for comment. Medrano, of the housing coalition, said last month that her group isn’t planning for a bill but believes there’s more momentum behind rent protection policies now.

“Housing and rent increases have always been an issue in our communities, but recently because of COVID, it has really become an unprecedented problem and really at the forefront for many individuals,” she said. “I hope that legislators are able to see that and that there is a higher likelihood that they’re wanting to take action, now.”

Though it wouldn’t be easy, officials said removing the statewide prohibition on local governments enacting rent caps would be more feasible for the legislature than instituting a blanket policy statewide. The House will reconvene on Jan. 9 with historic Democratic majorities and an expanded progressive wing, and supporters of rent intervention will be armed with an argument similar to Kniech’s: If the state won’t do it, let local leaders step in.

But beyond the House is the Senate, and beyond that chamber is Polis. The Denver Post spoke with more than 15 officials, advocates, lobbyists and experts for this story. Nearly every one mentioned Polis as a primary barrier to enacting rent stabilization or control in Colorado.

Hamrick, of the apartment association, said he assumed any bill on rent control would come from the House. If so, he said, he would hope to kill it in the Senate and stop it before it gets to Polis. If the rumors are true and the governor has presidential ambitions, Hamrick said, he won’t want to fight his own party on a progressive policy. One other local official quipped that the policy shouldn’t be a nonstarter for the legislature just because of one man’s opposition.

In a statement, Polis spokeswoman Melissa Dworkin said the governor was “skeptical” of rent control and wary of its potential unintended consequences of increased rent. Dworkin indicated Polis supported an approach that focused on supplying more housing, something other experts — like LiFari and Connolly — said should be front and center.

Even if a bill repealing the prohibition passed and became law, local governments would then need to implement their own policies. That would be a tall order, given the heated opposition certain to come from developers. It would also create a patchwork system, where some counties and municipalities have a policy and others don’t.

Despite the obstacles, advocates say local leaders are best positioned to respond and decide what works for them. The legislature, they said, should let them do it.

“Colorado is a very diverse state with regards to the different housing situations,” said Thomas Davidson, a former Summit County commissioner and the executive director of the nonprofit group Counties and Commissioners Acting Together. “In some places where the demand for housing far outstrips supply, you see elected leaders looking for every single tool they can get their hands on to try to make sure that the people that work in their community get to live in their community.”

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