After meeting with CAR lobbyists, who expressed significant concerns, sponsors introduced HB-1309 “Doc Fee to Fund Affordable Housing.” This bill would double the existing documentary fee for the recording of real estate deeds, with half of the money allocated to the county treasurer and the other half allocated to the Colorado Housing and Finance Authority to create a housing investment fund to support new and existing affordable housing programs.
CAR says the bills has several flaws.
“First, the fee that would double under this legislation hurts the very families that it is intended to help because such a fee is regressive. It disproportionately impacts low-to-moderate income earners – those that can least afford it, which creates a barrier to homeownership. Down payment costs – including closing costs – remain a significant barrier to homeownership, especially for low-to moderate-income households.
Second, real estate documentary fees are not a reliable funding source. Real estate documentary fees are extremely sensitive to market forces, making the frequency of transactions and value of property variable in relation to the strength of the economy, which makes real estate documentary fees a poor revenue source to fund affordable housing.
Finally, real estate documentary fees for affordable housing are likely unconstitutional under TABOR. The Colorado Supreme Court has weighed in on the issue of taxes versus fees, and ruled that fees levied must be directly related to the services being performed. New fees that pay or fund something not directly related to the cost of service are actually taxes, and as such, violate TABOR’s requirement that citizens are entitled to vote on new taxes.”
CAR’s Legislative Policy Committee is scheduled to review HB-1309 this Friday (4/14).