DENVER, CO - The House today passed a bill on a preliminary vote to give local governments and eligible entities the right of first refusal when multifamily properties are up for sale, creating opportunities to increase and preserve affordable housing stock.
“The right of first refusal is crucial in preserving and creating affordable housing opportunities in Colorado,” said Rep. Andrew Boesenecker, D-Fort Collins. “Currently, there are only 30 affordable and available rental units per 100 extremely low-income renter households in Colorado. This bill is a proven tool for local governments to be competitive against corporate developers, allowing sellers to receive market rate compensation for the sale of their property while communities retain long-term affordable housing.”
“The right of first refusal can prevent the loss of affordable housing stock at a time when Coloradans need more affordable places to live and hedge funds continue to buy up housing and increase rents,” said Rep. Emily Sirota, D-Denver. “Housing insecurity is a real threat for many Coloradans, impacting the health and safety of our lower-income communities. Under this bill, local governments will have the option to purchase buildings that go up for sale, providing them an additional tool to prevent the loss of housing that Coloradans can afford.”
HB23-1190 would allow local governments and other eligible entities a chance to make an offer on a multifamily or mixed-use property listing before other potential buyers. To qualify under this bill, the property would have to consist of five or more residential units in urban counties and three or more residential units in rural or rural resort counties. If the city or county decides to purchase the property, they must match the sale price and maintain the property as affordable housing for at least 100 years.
Sellers would be required to notify local governments of the intent to sell or of a potential sale. The local government would have 14 days to exercise the right to first refusal and another 60 days to make an offer on the property.
Data from the US Department of Housing and Urban Development found that the average rent for a two-bedroom apartment across the state is $1,505, however the Colorado minimum wage is $13.56. In 2022, a worker would have to make $28.94 per hour to afford housing that did not surpass 30% of their income. The State Demographer suggests that 40,950 new housing units need to be built every year between now and 2030 for the housing market to return to a healthy level, but projects that we will only build around 35,000 per year between 2020 and 2030, demonstrating the need to maintain existing affordable housing options.