Colorado Affordable Housing Crisis—Part 3

Two months ago, we talked about the Affordable Housing “Crisis” in Colorado (substack, 3/10/23) and the Governor’s attempt to impose his will on his subjects.  (Have I disclosed my bias already? Whoops!)  Then, as the legislative process (the mess) unraveled, we reviewed how a bill becomes a law (Colorado Affordable Housing Crisis-Part 2, substack, 4-14-23…for those of you who want to review or catch up) and now this week, we will go over what happened!

When we last left this tale, the public had emerged from the Senate Local Government and Housing Committee hearing where 250 people spoke for over 12 hours.  The vote in Committee was delayed while the sponsor negotiated, twisted arms, amended and the usual, until it was passed on to the Senate Appropriations Committee, again with more amendments and off to the Senate floor. The State Senate passed a bill that had removed almost all of the objectionable mandatory zoning language in favor of creating a regulatory structure where everyone would spend a lot of time making up housing plans which would be reviewed by new State employees hired to read and comment on those local housing plans who would….I don’t know what.  This whole process would cost “only” $15 million/year.  The local government costs to play this game went unmentioned.

NOTE TO READER:  Whenever anyone in the Government says the cost of blah blah blah… whatever is ONLY …and the number is in 7 figures, my blood runs cold.  Don’t know how much money you all are making and giving to your state governments, but I know that this $15 million “rounding error” for just this one year will be more money than I will ever contribute in my lifetime from my meager labors, and I suspect more than perhaps than the entire readership of this column.

Anyway, back to the tale…. Only $15 million…

Off to the House where the House Transportation, Local Government and Housing Committee prompted put back all the bad stuff that the Senate had taken out.  The Bill was then pencil whipped by the House Appropriations Committee with more amendments that no one could find and off to the House floor for passage.  (In all there were 80 amendments to this bill so that at the end, I suspect no one actually knew what was in it.) Breaking ranks, 9 Democrats voted against the Bill in the House but with so many Democrats to spare, 46-19, it went through with a comfortable 37-28 margin.

So now we had a Senate version that was essentially a bureaucratic $15 million study vs the House version with a bureaucratic $15 million study plus a state takeover of residential zoning.  Negotiations ensued.  Remember, that with only 19 Republicans out of 65 in the House and 12 out of 35 in the Senate, the Republicans, all of whom were opposed to this nonsense, were essentially irrelevant to the discussion (and treated as such), and the Democrats went off to negotiate among themselves and the Governor.

Now the Colorado Legislature has a 120-day time limit on its session (thank God), and time was coming to an end.  Some of the Progressive Democrats wanted tenant protections from gentrification (as if that was ever going to happen), protection from rent increases and generally the hardships of life while others wanted more affordable housing (which this bill didn’t address).  Others were concerned about where all the water was going to come from for all these new people, and yet others thought it was just a stupid idea (unconstitutional) while even others wanted to do whatever the Governor wanted.  At the end of the day…. actually, it was at night on the last legislative day, the Senate Majority Leader and sponsor of the Governor’s bill revealed that he did not have the votes of 18 of the 23 Democrat Senators required to pass the House version, and he admitted defeat. 

The good news was that with the collapse of the negotiations with no time remaining, the good citizens of Colorado were spared from spending the $15 million which now can be wasted on other programs, secondly, there was the hope that from this experience, the Governor and his allies learned something about housing and the desires of the people of whom he was elected to represent.  Those hopes were soon dashed.

The Governor or his office, I don’t recall which, issued a statement saying how disappointed he was that “special interests”, (i.e. the people who didn’t want their neighborhoods to be crapped up) were able to carry the day and that he would be back next year to change the “status quo”; the status quo being those content with where they lived.

On a political note, this was the Governor’s first defeat since his election in 2019.  He was used to having his way with us and his party as he has progressively taken control of the state oil and gas, electric and gas utility, and health care industries.

Whether this will be a trend where moderate democrats (and I use that term loosely) will act independently and do what they believe is best for their constituents or whether they will simply fall back in line like the members of the Russian Duma is yet to be seen.

As for the Housing Crisis, the proposals advocated by the Governor and his legislation to densify residential areas, force people to live in apartments around the railroad tracks (transit-oriented development) and to destroy single family residential neighborhoods are merely copies of other state proposals in California, Oregon, Massachusetts, Minnesota and Utah all of which faced opposition and none of which worked.  The common theme in all of these jurisdictions is that states are trying to impose their concept as to how people should live and those people are fighting back.

Next year as the battle is renewed in Colorado, hopefully, the debate can start at a more thoughtful level, focusing on basic fundamental issues:

1. Is there a housing crisis?  We learned that Colorado was short some 60,000 to 200,000 units which indicates that “the powers that be” really don’t know.  In the process of this debate, we also learned that there are more than this number of housing units that had already been approved by local municipalities but just hadn’t been built yet, which means its not the fault of local municipalities zoning practices.  In addition, the projected number of new residents in Colorado as well as the projected increase in housing prices have dropped over the last few months.  Has the housing crisis come and gone?

2. Is the expenditure of more than 30% income for housing constitute a crisis?  This figure appears to come from some bureaucrat from the Department of Housing and Development (HUD) but is it true?  Isn’t it a matter of choice and wouldn’t the price of other necessities constituting the other 70% be more important as to how much one chooses to spend on housing?   For those of us who were in the housing market in the late 70s and early 80s, the reality of double digit mortgage interest rates made housing costs a much greater percentage of total spending than 30%. And although unpleasant, we lived.

3.  Is mandating a greater percentage of multi-family housing a good thing?  Since World War II, owning a single-family home has been part of the American dream.  Is it still?  Should it be?  Surveys have shown that over 80% of the people would rather live in a single family home over a housing unit that shares walls even if it required a longer commute, including nearly 90% of Millennial homebuyers who told Redfin that they would choose a single-family home over an equally priced unit in a triplex with a shorter commute. Should we have a policy that diminishes the quality of life of our citizens?

4. Do people really want to live around railroad tracks in Transit Oriented Developments?  With the diversity of jobs, schools, shopping and entertainment throughout a metropolitan area, transit lines simply do not go where a substantial number of people want or need to go.   In 1920, 71% of the trips were to the central business district.  Now the number of trips is only 4%.  Light rail will never be a major transportation factor and forcing people to live near transit stations will not increase transit ridership nor change this modern reality.

75% of people believe that it would be better for the environment if houses were farther apart.  60% believe that higher density creates more traffic, and 62% believe that densely populated areas have higher crime rates. The question is should we as a matter of policy increase density and multi-family housing when our society doesn’t want it, and it would make the quality of our lives poorer? 

If the government really wants to create affordable housing, it can always use tax dollars to build it.  We call this housing “the Projects” which quite frankly don’t have a strong history of success. See Cabrini Green in Chicago and the Pruitt-Igoe Housing Project in St Louis.

There are, of course, a number of initiatives that the State can take to reduce the cost of housing. For example, it can do its fair share and cut property taxes or cut any taxes for that matter.  This would leave more money that citizens could use to spend on housing. 

The State can repeal the recently enacted restrictive environmental building code regulations that have been predicted to increase the cost of a 2200sf house by $70,000. It can repeal the construction defects law which has stopped the building of condominiums, often a first step for first time home buyers, to get into the housing market. The government can reduce permit fees. I’m sure there are other burdens that the State has placed on the housing industry or citizens that it could just remove if it really wanted to help. Hey…Do I have to think of everything? 

Do I anticipate that our governmental overlords will take these modest actions to relieve regulatory and tax burdens on the public?

No… This is about transforming Colorado and the rest of the United States by taking away the dreams of single-family home ownership and freedom to travel in order to make us a society of apartment renters crammed together and to eliminate cars and driving in the mistaken view that by limiting the dreams and reducing the quality of life of its citizens that they will save the planet.

Will our government help us to live the best life we can?  No…not the current government.  We are on our own.