HB 1279 “Construction Defect Actions Notice Vote Approval” CAR Position – Support. This bill passed the legislature and will be signed by the Governor next week, which is a major win for CAR. HB-1279 focuses informed consent and does nothing to stand in the way of individual owners who have a legitimate construction issue from seeking a legal remedy. It protects homeowners by ensuring they are aware of a potential lawsuit that could impact selling or refinancing their home and tightens up voting procedures so a majority of homeowners must approve initiating a legal action against a builder rather than leaving that decision to a homeowner association board.
The Homeownership Opportunity Coalition, of which CAR is a member, believes this bill is a positive first step in the right direction to building more attainable housing for all Coloradans while also protecting homeowners and giving them a voice in whether or not to pursue litigation.
House Bill 17-1309 “Documentary Fee to Fund Affordable Housing” CAR Position – Oppose HB17-1309 died last week in the Senate State, Veterans, & Military Affairs Committee. The bill would have doubled the existing documentary fee for the recording of real estate deeds and instruments with half of the money allocated to the county treasurer and the other half of the money allocated to the Colorado Housing and Finance Authority to create a housing investment fund to support new and existing affordable housing programs.
Although REALTORS® understand the need for affordable housing in Colorado and we have supported affordable housing legislation and initiatives like first time home buyer savings accounts, the idea of making housing more expensive to make it more affordable makes no sense.
Similar to the proposed transfer tax (below), HB-1309’s fee increase hurts the very families that it is intended to help because like a transfer tax, a documentary fee is regressive — it disproportionately impacts low-to-moderate income earners. And it creates barriers to homeownership because it increases the amount of money needed to purchase a home. Again, down payment costs – including closing costs – remain a significant obstacle to becoming a homeowner, especially for low-to moderate-income households.
Second, real estate documentary fees, like transfer taxes 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.
Senate Concurrent Resolution 17-002 “Real Estate Transfer Tax For Affordable Housing” CAR Position – Oppose. SCR 17-002, sponsored by Senator Kefalas (D-Ft. Collins), died last week in the Senate Agriculture, Natural Resources and Energy Committee. The proposal would have deleted the prohibition in TABOR on new or increased transfer tax rates on real property of 1/10 of one percent of the value of the real property as specified in the deed for the privilege of transferring the title to real property.
Although REALTORS® understand the need for affordable housing in Colorado, one of our bedrock principles is that you cannot make housing more affordable by making it more expensive. CAR is an affordable housing advocate. We have supported legislative initiatives designed to create more affordable housing options. However, SCR 002 had several flaws. First, the transfer tax hurts the very families that it is intended to help because such a tax 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 transfer taxes are not a reliable funding source. Real estate transfer taxes 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 transfer taxes a poor revenue source to fund affordable housing.
Finally, real estate transfer taxes are unconstitutional under TABOR. This concurrent resolution would remove that prohibition against transfer taxes in the constitution.
HB-1358 “Disclose Amounts Payable To Real Estate Brokers” CAR Position – Oppose. On April 27 HB-1358, the commission transparency bill (Trelora bill), was killed in the House Business committee 11-2. The bill would have required real estate agents to disclose their fees. In addition, the bill would require brokers to disclose their fees or the basis for calculating their fees on all marketing materials relating to any specific property, including on-line multiple listing services. The committee didn’t believe the bill was necessary.