By Debi Brazzale, COLORADO NEWS AGENCY
A panel of lawmakers were divided Thursday over whether a proposed measure was about allowing local governments to negotiate affordable housing contracts with developers or a slippery slope to rent control.
The debate was often times as much about labels as it was about law.
“This is not about New York-style rent control,” said bill sponsor and Health and Human Services Chair Sen. Betty Boyd, a Democrat from Lakewood.
Republican Sen. David Schultheis of Colorado Springs disagreed, saying that current state law already prohibits rent control, and that, “[t]his bill is a step towards trying to undo what is currently in statute.”
House Bill 1017 would carve out exceptions in the statute that prohibit rent control by allowing a city or county to negotiate voluntary agreements with a developer over rental prices. The agreements, said Boyd, can be temporary or permanent, and can run with the deed.
The bill was heard Thursday in the Old Supreme Court Chambers, a room that is used with larger turnouts such as today’s crowd. The majority of those in the room came to testify against the bill, but it ultimately passed on a party line vote. Republican Sen. Kevin Lundberg of Berthoud is concerned that if exceptions are made to the prohibitions on rent control, then local governments will coerce developers into the agreements by withholding approval for development unless the affordable housing requirements are met.
“I could easily see this being used as a carrot stick for a developer who is seeking approval from a municipality — where it (the agreement) becomes voluntary in name only,” said Lundberg.
Boyd countered that the intent of the bill was not to provide a tool to wield against developers but rather an avenue to create affordable housing in communities that are looking for ways to provide it — without passing an ordinance or resolution to do so, which would currently be illegal.
“You cannot do in a contract what state law prohibits,” said Boyd “The intent is to ensure that the lowest income levelsÉ that housing can be made available.”
Megan Pfanstiel, speaking on behalf of Hometown America Communities, warned the panel that the consequences of implementing rent control might actually defeat the goal of increasing affordable housing because market principals are still in play such as incentives to maintain or make improvements on a property that is owned at a loss.
“Rent control laws are often written by persons who believe that they protect the poor and the elderly from poverty and homelessness, but in fact they end up hurting them the most,” said Pfanstiel.
Schultheis said he believes that free market principals would work best to provide affordable housing and that if the government steps in, the free market would be disrupted causing more harm than the good intended by the bill.
‘”Whenever there’s a need, the free market moves in and fills that need. The free market would work if we would let it in this instance,” said Schultheis.
The Executive Director of Hope Communities, Larry Fullerton, disagreed with Schultheis, saying that the free market works very well for the majority of people but that sometimes it falls short.
“There is a very dire need for housing at the lower end of the income scale and the private sector is not fulfilling that need,” Fullerton told the panel.
The bill will now go to the full Senate for its second reading.