In this issue…
ADU Changes Approved
Steady Growth in New Homes
Competitive Election in Erie
City Updates Comp Plan
Christensen Calls for Radon Disclosure
Council to Consider Repeal of Residential Metro Districts
Council’s 2020 Work Plan
Broomfield Poised to Consider Inclusionary Housing Ordinance
Larimer County Offers Class
Land Use Code Update
Town Board Approves Rec Center Financing
Three Mile Plan
Town Updating Plans
City to Proceed with School Fee-in-Lieu Discussions
NISP Secures State Approval
COLORADO ASSOCIATION OF REALTORS®
Top Ten Issues Affecting the Industry
EPA Finalizes WOTUS Rule
Coalition Requests Delay from Regulators
ADU Changes Approved: The Boulder City Council approved changes to the ADU regulations on third reading without any discussion. Modifications to the roof-pitch ratio standards for legally existing accessory structures that are converted to ADUs can be administratively approved. The architectural consistency requirement for detached ADUs has been removed. Co-ops and ADUs are now allowed on the same parcel. The last provision expressly prohibits the sale of an ADU separate from the principal dwelling unit.
Steady Growth in New Homes: Fred Starr, Erie’s Planning and Development Director recently released a building permit report. Over the past five years, the Town’s single-family building permits have trended steadily upwards. In 2015 Erie issued 426 single-family permits. By 2019 this number had grown to 601 permits for a five-year average of 523 per year.
Competitive Election in Erie: Like many statutory towns, Erie’s municipal election is April 7. There are three candidates for mayor – Jennifer Carroll (incumbent), Barry Luginbill and Cristiaan van Woudenberg (trustee). There are nine Trustee candidates for three seats, include Bryon Bednar, Brandon Bell, Ari Harrison, Dan Hoback, James Lee, Sara Loflin, Jim Luthi, Todd Sargent and Andrew Sawusch.
Van Woudenberg has two years remaining in his trustee term. One assumes that if he is unsuccessful in his mayoral run, he may continue to serve as a trustee. An email to the Town Clerk regarding this topic did not receive a response. If he is elected mayor, his trustee seat will be vacant.
Erie’s Chamber of Commerce will host a candidate forum on Thursday, March 12 at 6:00 pm at Vista Ridge Academy, 3100 Ridge View Drive.
City Updates Comp Plan: The City of Lafayette’s current Comprehensive Plan (“Comp Plan”) was originally developed in 1987, updated in 1997 and went through a major review and update in 2003. The City is currently going through the process, working with all of the stakeholder groups and the residents of Lafayette, to complete a new, overhauled Comprehensive Plan that will guide the City’s evolution through 2040.
This planning process, known as Legacy Lafayette, will create a roadmap for the future of the community. The Comp Plan is important because it is the foundation for other important plans, such as Future Land Use and Potential Redevelopment, and Housing and Economic Development Strategies.
Legacy Lafayette will include a number of ways to get involved and provide input on the future of the community, including workshops, online discussion forums and input via email.
Participation by members of our industry is important because input from residents will contribute to the creation of alternatives on key topics. This in turn, will lead to the creation of “preferred” elements of the Comprehensive Plan for various planning topics including transportation, land use, housing, etc.
The final community meeting is scheduled for February 27. Get more information about that meeting, or sign up for email updates here: https://legacylafayette.org/upcoming-events/. Lafayette staff intend to have a final version of the Comp Plan finished by this summer.
Christensen Calls for Radon Disclosure: On January 28 After a short presentation by Boulder County staff for Radon Awareness Month, City Councilmember Polly Christensen argued that all real estate transactions in Longmont should include a mandatory radon disclosure document.
Mayor Brian Bagley asked about current building code requirements. Staff said that new homes are already required to be constructed with radon-resistant materials. A representative from Boulder County public health department said that is not the case for multi-family construction and suggested for “social equity reasons “that should be added to Longmont’s building codes. No other Council members voiced support for Christensen’s proposal or changes to the City’s building codes.
Council to Consider Repeal of Residential Metro Districts: Watching previous discussions about metro districts, it was a foregone conclusion that the City Council would decide to revise its residential metro district policy. On February 4 the Council voted 4-3 with Mayor Bagley and Councilmembers Martin and Water opposed, to consider repealing the existing ordinance, which was passed last year.
Councilmember Polly Christensen made a motion to repeal and replace the ordinance with the previous version. That ordinance only allowed metro districts in mixed-use developments in which the residential units could not consist of more than 50 percent of the project. (No such development has ever been submitted to the planning department for review.) She likened residential metro districts to sub-prime loans, saying there were “good tools and bad tools. This is a bad tool.”
Although the City’s Special Counsel Carolyn White told the Council it was free to restrict and limit the powers of metro districts, Mayor Pro Tem Aren Rodriguez remained skeptical. He seconded Christensen’s motion, saying he was prepared to support metro districts if they offered “exceptional benefits” but changed his mind because he was too worried about the City’s inability to restrict their “excesses” without going to court.
Councilmember Tim Waters made an impassioned plea about the importance of metro districts as a means of offering first-time homebuyers products they could afford, but his arguments made no headway with his colleagues. The first reading of the replacement ordinance is scheduled for February 23.
Council’s 2020 Work Plan: One way to predict the types of legislation we might see in any given year is to look at annual goals. For example, Louisville’s 2020 City Council Work Plan gives us ideas about what to expect this year.
The issues listed as “high priority” include the development of a transportation master plan, the development of an economic vitality strategic plan, an update to the 2016 Louisville Sustainability Action Plan, Rocky Mountain Metropolitan Airport Noise Mitigation Efforts and a new approach to City budgeting.
Although this list only addresses items the City Council intends to address proactively, it also tells us what the Council thinks is important – or unimportant. Housing appears nowhere on the list at any priority level, which could be good or bad depending on your opinion of local government’s role in addressing housing inventory or affordability.
However, transportation and economic vitality are certainly relevant to our industry and possibly airport noise, depending on how big of a problem that is to consumers looking to buy or sell real estate. To learn more about the City Council’s 2020 Work Plan, click here: https://www.louisvilleco.gov/home/showdocument?id=22360.
Broomfield Poised to Consider Inclusionary Housing Ordinance: Tony Kassel, the Chair of Broomfield’s Housing Advisory Commission (HAC) and a real estate broker, told the City Council that HAC’s analysis showed that only four percent of Broomfield’s housing stock is affordable to families making 80 to 100 percent of Broomfield’s area median income (AMI). The Housing Advisory Commission has been working on recommendations for several years. One of its first recommendations was to legalize ADUs, which the City implemented last year.
On February 4 the HAC presented the inclusionary housing ordinance (number 2100) which the City Council will formally consider next week. It will require that 20 percent of any rental development is affordable for families at 60 percent AMI. 10 percent for a for sale development of at least 25 units will be required to be affordable to families making 80 percent AMI. Deed restrictions will be put in place for both types of developments. 40-year deed restrictions will apply to for rent properties and for sale units will be deed-restricted for 30 years. The ordinance also allows cash-in-lieu fees.
Mayor Patrick Quinn and the City Council were complimentary of the HAC’s work. He said, “I am completely behind it.” Kevin Standbridge, the City/County Manager, said the staff has been budgeting for the positions required to administer the ordinance.
Larimer County Offers Class: Larimer County 101 is a series of classes designed to give the public an inside look at Larimer County’s government and the services it provides. Topics will include county history, land use, the criminal justice system and property taxes.
Applications are due March 1. The class meets Thursday nights from 6 p.m. to 9 p.m., March 19, 2020, to May 28, 2020, at county locations in Fort Collins and Loveland. More information is available here: https://tinyurl.com/uf3elfc
Land Use Code Update: Following the adoption of the updated Comprehensive Plan last year, the County is preparing to update its Land Use Code. The intention is to update the regulations for clarity and enforceability, tailor regulations to the County’s three context areas (mountain and foothill, rural/agriculture, and urban) and implement the Comp Plan as well as other major plans. More information is available here:https://www.larimer.org/planning/luc2020
A public open house is scheduled on February 13 at 5:00 p.m. at The Ranch in the south hall of the First National Bank Building.
Town Board Approves Rec Center Financing: On January 28 the Berthoud Board of Trustees voted 5-2 to approve an ordinance that will allow the Town to proceed with a plan to issue Certificates of Participation (COP) to fund the Waggener Farm Park and Recreation Center. COPs are commonly used by governments to fund infrastructure. Investors purchase a share of the lease revenues of a program rather than the bond being secured by those revenues. COPs do not require a public vote, unlike bonding or sales tax measures.
A majority of the trustees were positive about the decision, saying the rec center will be a nice addition to the Town. Mayor Pro Tem Jeff Hindman said studies show that towns get a good return on investments in parks and recreation. Even Mayor Will Karspeck who voted against the ordinance admitted the rec center will be a “huge transformational facility for our community.” Town Manager Chris Kirk said staff is working with the Library District and it is possible a new library branch will also be added to the rec center site.
The Rec Center issue has been a thorny one for Berthoud. In 2018 town voters approved a measure to authorize a one percent sales tax to help fund the Rec Center but voted against a measure that would allow the Town to issue $30 million in bonds. Then in 2019, a group led by the mayor’s father pushed a measure to limit the trustees’ ability to take on debt. That ballot measure was aimed at preventing the trustees from using COPs to fund the Rec Center. The measure failed by two votes.
Trustee Resigns: Pete Tomassi, who joined the Berthoud Board of Trustees in 2018, resigned on January 29 in protest of the Board’s vote to approve its agreement to issue COPs to fund a rec center. He looked uncomfortable during the Board’s meeting on the 28th at which he joined Mayor Will Karspeck in voting against the ordinance. He told the Reporter-Herald, “As far as I’m concerned, using certificates of participation was in direct opposition to the voters in this situation.”
In other election news, Trustee Brian Laak changed his decision, and will not run for re-election. None of the seats in the April 7 election are challenged. Mayor Will Karspeck is running unopposed. With four candidates for four seats, incumbent Jeff Hindman and newcomers Mike Grace, May Soricelli and Lonnie Stevens will win seats on the Board of Trustees.
Council Approves Three Mile Plan: The City Council approved a resolution without comment to formally adopt a Three Mile Plan for 2020. The Three Mile Plan consists of the City’s comprehensive plan, other adopted plans covering infrastructure, services and surrounding areas, and procedures and gives proper legal standing for the City of Loveland to annex.
The three-mile plan is a long-range planning opportunity for municipalities to consider where they want to annex, how they will provide service in the newly annexed areas, and how they will sustain adequate levels of service throughout the rest of the municipality. It ensures that the municipality will annex land only when it is consistent with pre-existing plans for the surrounding area.
State statute requires a three-mile plan to generally describe the proposed location, character and extent of future public utilities and infrastructure (e.g., streets, bridges, parks, playgrounds, aviation fields, waterways, open spaces and other public grounds) as well as proposed land uses for the area. The master or comprehensive plan takes into account all land that is functionally related to the growth of the municipality, not just land within three miles of the municipal boundary.
Adoption of the resolution ensured Loveland in good legal standing to grow and annex property. The failure to have a plan prior to the completion of an annexation could prevent the annexation from moving forward legally.
Colorado law limits those who have a right to challenge annexations to property owners within the annexed area, the county in which the land is located and neighboring municipalities within one mile. In areas with growth pressures, it is increasingly likely that these three groups will use the lack of a plan as grounds for invalidating the annexation.
Town Updating Plans: The Town of Wellington is updating its Comprehensive Plan (Comp Plan) and its Land Use Development Code. According to the Town’s website, the goal is to “identify and articulate the community vision and objectives that will set the roadmap for the Town’s growth from now into 2040.” Comp Plans routinely address important topics such as housing, so there should be plenty of motivation for REALTORS® to engage.
For more information about opportunities to get involved in the Comp Plan, visit the Town’s website https://www.townofwellington.com/451/Comprehensive-Plan or its FaceBook pagehttps://www.facebook.com/WellingtonCo1905
City to Proceed with School Fee-in-Lieu Discussions: Greeley currently has no mechanism to provide land for new schools as the City grows. On February 4 Brad Mueller, the City’s Community Development Director, told the City Council staff has been meeting with representatives from the Eaton, Windsor and Greeley-Evans School Districts to explore the possibility of adopting an Intergovernmental Agreement (IGA) that would require builders to make cash payments to the school districts for land when applying for building permits.
The purpose of the discussion was to get direction from the City Council as to whether staff should continue to work with the school districts on this proposal. The formulas vary by school district, but as an example a consultant said a fee of $2,498 per single-family unit seems “reasonable.” A majority of the City Council present (Brett Payton was not in attendance) said the discussions with the school districts on this topic should continue.
Kristin Zasada was the only Councilmember who wanted to postpone the IGA discussions. She said the City already has a housing challenge. She wants the City to take a look at current impact fees and make sure they’re not onerous before adding any new fees. She said, “I’m not saying no… I just want to bump it to the future for a little bit.” Zasada added that she hopes to discuss her idea of reviewing the impact fees at Council’s retreat this weekend.
Note: The school cash-in-lieu concept is currently utilized by two-thirds of Colorado’s municipalities. Windsor and Severance already require cash-in-lieu.
NISP Secures State Approval: The Colorado Department of Public Health and Environment issued Colorado 401 Water Quality for Northern Integration Supply Project (NISP). Northern Water hopes to get approval from the U.S. Army Corps of Engineers by June. Northern Water will also require a 1041 permit from Larimer County. If the final permits are approved, construction could begin in 2023.
NISP would store 170,000 acre-feet of water at Glade Reservoir north of Fort Collins and 45,000 acre-feet at Galeton Reservoir northeast of Ault. The project would serve 15 towns and water districts, including Windsor, Erie, Evans, Lafayette, Severance and the Tri-Towns (Firestone, Frederick and Dacono). The project has been in the works since 2000. For more information, click here: https://www.northernwater.org/sf/nisp/project-info/project-overview
COLORADO ASSOCIATION OF REALTORS®
Legislative Update: Here are some of the bills discussed by CAR’s Legislative Policy Committee at its most recent meeting:
SB-138 “Consumer Protection Construction Defect Time Period” CAR Position: Oppose
This bill attempts to roll back some of the construction defects legislation supported by CAR three years ago by making it easier to file lawsuits against builders of condominiums and single-family homes. It would extend from six years to 10 years the time period for homeowners to file legal action based on purported construction defects. It also would require that a homeowner know that a problem was caused specifically by a construction defect before the two-year statute of limitations begins on that particular issue.
Meanwhile, the Home Ownership Alliance coalition (which includes CAR) issued a statement saying that the bill comes at exactly the wrong time, as local leaders are seeing a boost in condo development but continue to look for ways to spur even more of the lower-cost housing. (Denver Business Journal, Jan. 29)
HB-1155 “High Efficiency New Construction Residence” CAR Position: Oppose
CAR’s Vice-president of Public Policy Liz Peetz told the LPC this particular bill is a high priority for the Democratic leadership in the House and the Senate. It would require home builders to offer an electric vehicle charging system, or a wiring upgrade to accommodate the future installation of a charging system in new single-family or owner-occupied condominium units. The LPC voted to oppose the bill because its requirements to would add yet another cost to new residential construction.
SB-108 “Landlord Prohibitions Tenant Citizenship Status” CAR Position: Neutral
“The bill creates the “Immigrant Tenant Protection Act” (Act), which prohibits a landlord from demanding, requesting, or collecting information regarding or relating to the immigration or citizenship status of a tenant; disclosing or threatening to disclose information regarding or relating to the immigration or citizenship status of a tenant to any person, entity, or immigration or law enforcement agency…”
This bill was the subject of a long LPC discussion. LPC members said they had no desire to wade into an immigration controversy. They simply want to ensure landlords or property managers can do background or credit checks and there were concerns provisions in SB-108 could interfere with those tasks. CAR lobbyists are working with the bill’s sponsors to request revisions.
SB-133 “Business Fiscal Impact Statements” CAR Position: Support
Sponsored by Senator Rob Woodward (Larimer County), SB-133 would require the preparation of fiscal impact notes to access the potential direct economic effects of a bill on Colorado businesses, including costs related to compliance, impacts on hiring or job losses, savings or cost reductions, and other fiscal impacts.
The LPC supports this will because it would “provide policymakers with the financial analysis to better understand how legislation impacts Colorado businesses.”
Top Ten Issues Affecting the Industry: The Counselors of Real Estate has identified the current and emerging issues expected to have the most significant impact on real estate, with U.S. infrastructure being the leading concern of the 1,100-member organization. The report indicates that “roads, bridges, tunnels, railways, airports, the power grid, water systems, and levees are giving way with greater frequency. While the White House and Congressional leadership have discussed funding of up to $2 trillion, it remains unclear what action government leaders will take.”
The list was released during the National Association of Real Estate Editors’ annual conference in December 2019. After infrastructure, the other top issues include housing in America, weather and climate-related risks, the technology effect and end-of-cycle economics. To read more about these issues and why they made the top 10 list, click here: https://www.nar.realtor/commercial-connections/the-top-ten-issues-affecting-the-industry.
EPA Finalizes WOTUS Rule: EPA Administrator Andrew Wheeler and Assistant Secretary of the Army for Civil Works R.D. James announced a new, clear definition for “Waters of the United States.” With the Navigable Waters Protection Rule, the U.S. Environmental Protection Agency (EPA) and the Department of the Army (Army) are delivering on President Trump’s promise to finalize a revised definition for “Waters of the United States” that protects the nation’s navigable waters from pollution and will result in economic growth across the country. NAR supports this new rule because it will allow states to more efficiently manage local waterways while maintaining current environmental protections and encourage economic development.
The Navigable Waters Protection Rule ends decades of uncertainty over where federal jurisdiction begins and ends. For the first time, EPA and the Army are recognizing the difference between federally protected wetlands and state-protected wetlands. It adheres to the statutory limits of the agencies’ authority. It also ensures that America’s water protections – among the best in the world – remain strong, while giving our states and tribes the certainty to manage their waters in ways that best protect their natural resources and local economies.
Coalition Requests Delay from Regulators: NAR led a coalition of more than 35 associations to send a letter to the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (FED), the Federal Deposit Insurance Corporation (FDIC), the Securities and Exchange Commission (SEC), the Federal Housing Finance Agency (FHFA), and the Department of Housing and Urban Development (HUD), requesting a delay in their review of the qualified residential mortgage rule.
In the wake of the financial crisis, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The law affects housing finance in two ways. First, it makes originators liable to prove that a borrower/recipient can afford the mortgage they originate under the ability to repay (ATR) rule and an exemption to the ATR called the qualified mortgage rule (QM).
Second, it forces securitizers of mortgages to maintain sound capital and quality standards for the mortgages they bundled and sell to investors under the qualified residential mortgage rule (QRM). The QRM rule, the focus of this coalition letter, requires securitizers to hold an increased amount of capital if the loans they securitize are of a lower quality. As a result, borrowers who use non-QRM mortgage typically face higher rates and limited access.
To avoid higher costs and market disruptions, regulators created a broad measure of safe loans in the QM rule and then set QRM equal to QRM, so that the majority of mortgages were high quality and could be bundled into QRM-eligible securities. This alignment has maintained low costs and good access for the majority of the market.
Earlier this year the regulators announced their intent to review and update the QRM. However, the CFPB is reviewing the QM rule and announced a delay. Because the QRM rule depends on the QM rule, NAR and the co-signers have asked the regulators to delay their review of the QRM until the CFPB completes its review of the QM and finalizes any changes.