Regional Government Affairs Update Novemberr 19, 2021 🍂

Welcome to the latest government affairs update. New City Council members are “drinking through a fire hose” and learning about their new jobs. As such, few councils are tackling complicated policy issues right now. Expect a lull for the holiday season before elected leaders get to work on big issues after the first of the year.

Best Regards,

Barbara Koelzer
Regional Government Director

Boulder County

Referendum Approved for Ballot:
The Boulder City Council has approved the certification of a referendum that will require Boulder voters to decide whether they want to repeal the annexation agreement approved in a 6-1 vote in September. The Council hasn’t yet decided how it will proceed moving forward.

The referendum was deemed sufficient on November 1 by the City Clerk’s Office with more than 5,700 signatures. Signature gatherers with Save South Boulder and PLAN-Boulder County were required to obtain at least 3,336 signatures.
The Council could repeal the CU South annexation agreement, however, that is unlikely because the City Council majority supports the annexation agreement, meant to guide flood mitigation and development on the 308-acre property owned by the University of Colorado Boulder. Alternatively, the Council could submit the referendum to a vote of Boulder’s electorate, either in the next municipal election or in a special election before that time.

Sources say the City Council will decide how to proceed sometime in December. The Council cannot make the decision ahead of Dec. 1 because there is an opportunity for people to challenge the sufficiency of the referendum signatures up until then.

Brockett Elected Mayor: Aaron Brockett was appointed mayor in a 6-3 vote. Bob Yates also expressed interest in the role but received three votes. Rachel Friend was unanimously appointed mayor pro tem. This will be the last time the Council elects a mayor. In 2023, the mayor will be selected by the electorate through ranked-choice voting.

Larimer County
Fort Collins
Ohlson Criticizes Land Use Code Recommendations: The Fort Collins City Council discussed the guiding principles and work plan for revisions to the Land Use Code as part of the Housing Strategic Plan on November 9.

The guiding principles for the project include:

  1. Increase overall housing capacity (market-rate and subsidized) and calibrate market-feasible incentives for Affordable Housing.
  2. Enable more affordability especially near high frequency/capacity transit and priority growth areas.
  3. Allow for more diverse housing choices that fit in with the existing context and/or future priority place types.
  4. Make the code easier to use and understand.
  5. Improve the predictability of the development permit review process especially for housing.

Kelly Ohlson lambasted the staff and consultant’s recommendations. He said, “I am disappointed in what we’ve been presented tonight. The quality of the work product is the worst I’ve ever seen.” Cost does not equal the price, he argued. That is “a basic economic fact that staff and consultants should know. If cost goes down, developers will still charge as much as they can get.” He claimed high density infill won’t be affordable. He said the result will be to “cram in more and more development with less and less scrutiny. A nightmare scenario. I was open to zoning changes but now there could be less scrutiny. It’s surreal.”

Ohlson added that “so-called streamlining of development review isn’t good for existing homeowners. The City must move away from stakeholders that are corrupt. In this case that is the developers. They will want less oversight, lower fees and less regulations. Stakeholders can’t just be economic vested interests – that is corrupt.” In his opinion, the Planning Department should represent average citizens. That is their job.”

The other Councilors didn’t comment on Ohlson’s critique. Tricia Canonico said, “We are headed in the right direction.” But she added that she doesn’t want to see accessory dwelling units (ADUs) used as short-term rentals.

Shirley Peel wondered, “How does supply and demand play into this?” Once Council approves the guiding principles consultant Peter Park said they will look at existing principles and existing policies and gaps between aspirations and regulations – do they support them or not? What can people afford and what do the regulations require?

Susan Gutowsky asked what staff knows about “cash-rich investors who flip homes and make them unaffordable. What can the code do to slow that process down?” She said the investors are impacting affordability in Fort Collins.

Mayor Jeni Arndt said she wants to see flexibility in the code. Fees need to be built in, especially increases in them) to financial assumptions. She liked the guiding principles; they square with what she hears in the community. Making the code easier to use and understand is good, more transparent.

Ohlson added that it must be legal to say that ADUs can’t be short-term rentals. He said he assumes “all these changes will equally apply to HOAs? Otherwise, equity talk is hollow.” Staff said the Land Use Code applies to all development. Ohlson added that he wants “uncertainty” in the code.

The project team anticipates beginning the Land Use Code drafting process in early 2022. There will be another Council work session to review the draft code prior to its adoption.

Affordable Housing Public Forum: The City of Loveland held a public forum to get input on affordable housing November 18. About 85 people participated, including staff. Mayor Jacki Marsh said the number of participants showed how important the issue is to citizens.
The forum started with short presentations by Alison Hade (Community Partnership Office), Jeff Feneis (Loveland Housing Authority) and Aspen Homes. Hade said the median home price in Loveland is $430,000 (according to the latest IRES data it is closer to $445,000) but added that a family with an income of 80 percent AMI can’t afford a home in that price range.

After the presentations participants were divided into groups and answered a series of three questions: 1) What is your experience with affordable housing in Loveland? 2) What are the challenges to affordable housing? And 3) What should the City’s role be relative to affordable housing.

The questions didn’t elicit any new insights into the issue of affordability or any new answers. One observer said the purpose of the forum was simply to blunt criticism that the City doesn’t engage its citizens, a complaint made often by Councilor Andrea Samson. A summary of the forum will be sent to the City Council.

Weld County
Olson Appointed to Transportation Group:
Johnny Olson, Greeley’s newest City Council member, was appointed to represent the City of Greeley on the North Front Range Metropolitan Planning Organization (NFRMPO). This is great news for Greeley. As the former head of CDOT’s Region 4, Olson is a transportation expert, and he will fight for highway and road funding for Greeley and other cities in Northern Colorado.

Pilot Program for Struggling Homeowners: The Colorado Sun reported there is a new pilot program to help homeowners make past-due mortgage payments. The program offers homeowners up to three months of payments.

The Emergency Mortgage Assistance Program, or EMAP, has been in development since $10 billion in the American Rescue Plan was set aside by Congress in March for housing aid. The U.S. and Colorado already have a program for struggling renters.
Colorado’s share of the new federal Homeowner Assistance Fund is $175.1 million and the state’s Department of Local Affairs is using 10% for EMAP, according to State Division of Housing officials. 

“We will be closely watching the demand for this program in partnership with our local nonprofit administrators,” said State Director of Housing Recovery Sarah Buss. “The demand will help shape how the remaining federal funds are programmed to best serve Colorado homeowners.”

Buss said that EMAP is just one of several programs that the state Division of Housing is working on to distribute the federal money. “The other HAF programs must ultimately be submitted to the U.S. Treasury for final review and approval, after which DOH will work to roll out the other programs, in early 2022,” Buss said.

Help for homeowners was paused after new the federal relief package that was approved in December provided funding only for renters. The state’s program for homeowners ran out of money, so Colorado had to end the mortgage relief program for homeowners

NAR Says Housing is Infrastructure: The U.S. House of Representatives passed President Joe Biden’s signature Build Back Better plan Friday by a vote of 220-213. The bill now goes to the Senate for consideration.

The roughly $1.75 trillion bill spares real estate investment from the most-feared taxes and includes key NAR priorities like investments in affordable housing and down payment assistance.
The roughly $1.75 trillion bill spares real estate investment from the most-feared taxes and includes key NAR priorities like investments in affordable housing and down payment assistance.

“Our advocacy operation is bipartisan and focused on the issues. Our goal was to ensure this legislation includes robust funding for affordable and fair housing and protects real estate investment from misguided and harmful new taxes,” says Shannon McGahn, chief advocacy officer for NAR. ”We are pleased that House lawmakers expanded affordable housing provisions from what was in the original framework, but this bill is far from final. Expectations are the Senate could remove some provisions to lower the price tag. We will continue to work with Congress to ensure the final bill is good for the real estate economy and consumers.”

Lawmakers are using a budget process known as reconciliation, which allows legislation to bypass the Senate filibuster and pass with 51 votes. But the process also limits provisions in the bill to items that change spending or revenues, preventing some policy priorities from being included.

Tax Provisions Spare Real Estate Investments

The House-passed bill is partially offset with new taxes on high-income individuals and businesses and new money for increased IRS enforcement, but the tax increases most likely to harm real estate investment were excluded.

“Some of the earlier tax proposals floated would have devastated the real estate sector, which makes up nearly one-fifth of the entire economy,” McGahn says. “This revised bill has no 1031 like-kind exchange limits, no capital gains tax increases, no change in step-up in basis, no tax on unrealized capital gains, no increased estate tax, no carried-interest provisions, and no 199A deduction limits.

“We worked for more than a year to educate lawmakers on these issues and launched a targeted Call For Action on taxes. The tax provision of this framework is testament to the effectiveness of our education campaign in Washington,” McGahn continues.

The plan also includes an increase in the state and local tax deduction limit. The current $10,000 SALT deduction cap would be raised to $80,000 through 2030.

Historic Investment in Affordable Housing

The House-passed bill also includes a $150 billion investment in affordable housing, a key NAR priority and focus of its advocacy efforts for the past year.

In addition, House leaders added back several programs not included in the original framework announcement, including $12 billion to expand the Low-Income Housing Tax Credit and $6 billion for a new initiative, the Neighborhood Homes Investment Act. NAR is a supporter of both programs.

Under the revised bill, public housing and rental assistance get funding boosts. The bill would also create more than 1 million new affordable rental and single-family homes and invest in down payment assistance. The White House says the down payment assistance under the plan would allow “hundreds of thousands of first-generation homebuyers to purchase their first home and build wealth.”
The bill includes funding for the following programs in the housing section:

  • $65 billion for formula- and needs-based public housing programs.
  • $25 billion for the HOME Investment Partnerships Program to construct and rehabilitate affordable homes for low-income families, and $750 million for a new Housing Investment Fund to leverage private-sector investments to create and preserve affordable homes.
  • $24 billion for housing choice vouchers and support services, including for individuals at risk of homelessness and for survivors of domestic violence and sexual assault.
  • $10 billion to offer down payment assistance to first-generation home buyers, and $5 billion for a home loan program to subsidize 20-year mortgages for first-generation home buyers.
  • $5 billion to address lead paint and other health hazards in housing for low-income families.
  • $3.05 billion for the Community Development Block Grant program.
  • $3 billion for a new Community Restoration and Revitalization Fund offering competitive grants to local partnerships led by nonprofits for accessible housing and neighborhood revitalization initiatives.
  • $2 billion for rural rental housing to support new construction, the removal of safety hazards, and energy efficiency improvements.
  • $2 billion for a new grant program to make energy efficiency upgrades to affordable housing.
  • $700 million for the Fair Housing Initiatives Program and $100 million for the Fair Housing Assistance Program.

NAR Plays Critical Role

As negotiations continued in recent weeks, media reports suggested that housing provisions might be cut from the bill altogether.

In response, NAR CEO Bob Goldberg joined other housing leaders and key members of Congress at the U.S. Capitol Oct. 20 for a press conference calling for the inclusion of affordable housing provisions in the final bill.

”As a nation, we have to find ways to close the supply shortfall,” Goldberg said at the press conference. “Doing so will be particularly meaningful for lower-income households, millennials, and households of color.”

“We continued to press both publicly and privately for these provisions,” McGahn says. “Affordable housing is the key to unlocking prosperity for millions of Americans currently excluded from the American dream. This investment is critical for closing the racial homeownership gap and addressing income disparity. It opens up homeownership for first-generation and first-time buyers.”

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