Colorado Breaks Its Logjam on Housing Policy

By some measures, Colorado has one of the worst affordable housing shortages in the country, mostly because so many people want to live there. The state’s population has grown faster than most over the last decade, and Colorado now has more than twice as many residents as it did in 1980. The vast majority of them live in a string of communities along the Front Range of the Rocky Mountains. Housing costs have drastically outpaced income growth.

Gov. Jared Polis, a Democrat first elected in 2018, has sought for the last few years to tackle the affordability crisis with changes to state housing policy. And over the last few months, the Colorado General Assembly has delivered.

The Legislature approved a half-dozen bills aimed at various aspects of the housing crisis this session. They are designed to promote transit-oriented development, allow accessory dwelling units, lift parking requirements and home-occupancy limits, and provide new protections against eviction for tenants. “Coloradans have demanded solutions that will reduce the cost of housing and I’m proud that we have worked together to deliver real results,” Polis said in a statement after signing several of the bills.

It’s a turnaround for the governor, who backed a significant land-use bill last year that incorporated a variety of policy changes, only to watch it die in the last days of the legislative session. Although the recent bills reflect many of the same priorities as the previous year’s package, the approach has shifted in some key areas away from state mandates and toward incentives.

Lawmakers say that breaking the omnibus package into smaller pieces made it easier to understand, debate and amend. “This year we took it much more piece-by-piece,” says state Sen. Chris Hansen, a Democrat who sponsored one of the bills. “I think that helped us put the right focus on each policy.”

State Housing Playbook

The package of bills includes policies that are part of an increasingly common playbook for statewide housing reform. The push to make it easier to build accessory dwelling units (also known as in-law suites, granny flats or casitas) has been seen as a huge success in California, for example, where the number of ADUs permitted and built has skyrocketed over the last several years. California and Oregon have both sought to undo minimum parking requirements, which can drive higher housing costs. A number of states have moved to allow two or three housing units on lots previously zoned for single-family use.

Colorado passed a bill pushing cities to build denser housing in areas close to transit stations — an attempt to make housing more affordable, reduce residents’ transportation costs and mitigate greenhouse gas emissions. “I think there’s a number of reasons why it’s the right policy for Colorado,” says Hansen, who sponsored the bill. “The obvious one is that more affordable housing near transit helps lower the cost of living over time.”

Building out dense communities in transit-adjacent areas could also help boost rail and bus ridership and make the most of the state’s transit spending. “We’ve got very limited ability to invest in transit, and trying to get the best return on our investment for that is really important for the state,” Hansen says.

The bill requires certain Colorado cities to set and meet housing-production goals in areas served by transit. Housing developers say that if cities comply, there will be more land for denser housing to be built by right, making it cheaper to construct and increasing the available supply.

“One of the things that we face in housing production right out of the gate is the necessity to change zoning on parcels that might be developed,” says Brian Rossbert, executive director of Housing Colorado, a coalition of private, public and nonprofit developers and financiers. “Having some of that zoning capacity already changed going into a project smooths the way for development to happen more rapidly and more efficiently.”

In addition to policies aimed at increasing housing supply, the state also passed a “just cause” tenant protection bill. That prevents landlords from evicting tenants who’ve been in a home for a year or more, as long as they are paying their rent and following the terms of the lease. Colorado evictions jumped after pandemic-era moratoriums and rental assistance programs expired, says Zach Neumann, co-CEO of the Community Economic Defense Project, which helps tenants navigate eviction cases. Some areas have seen their highest-ever rates of eviction in recent months.

A small but significant portion of tenants face “non-renewal” evictions, Neumann says — meaning landlords simply try to kick a tenant out at the end of the lease. The bill would give those tenants a chance to stay in their homes. “The goal of this legislation is to say that if someone has secure housing, they’re paying their rent and following the rules, they shouldn’t be forced into that displacement crisis," Neumann says.

Negotiating Local Control

The question of how much state law should supersede local laws commonly creates tension in housing and land use policy. Last year, New York Democratic Gov. Kathy Hochul pushed to overhaul local zoning policy to promote a massive expansion of housing supply statewide, but the Legislature rejected the proposal. Hochul came back this year with a set of policies that included fewer mandates and more incentives, and enjoyed more success with lawmakers.

Polis’ housing package last year was derailed partly over concerns about local control. Democrats have strong majorities in the Colorado Legislature, but conflicts about land use aren’t neatly partisan. Some of this year’s bills were backed by Republicans as well as Democrats, but local control remained a sticking point. “There has been this pre-emption model from the state that I do not support,” says state Rep. Rose Pugliese, the Republican minority leader in the Colorado House. “You need more carrots than sticks.”

In this year’s session, legislators made some last-minute amendments to the transit-oriented communities bill as a concession to local governments. In its original form, the bill would have withheld some state funding from communities that didn't zone for denser housing near transit. Lawmakers changed it to reward communities that do comply.

Polis toldGoverning earlier this year that pushing housing policies as a series of bills rather than an omnibus package would allow for “distinct but overlapping coalitions” to move each part forward. In the end, the coalitions for each bill looked roughly similar, says Hansen, the state senator. What made the bigger difference was being able to consider each bill separately. That’s been a successful tactic in other places such as California, which has passed hundreds of housing-related bills in recent years.

Polis’ land-use bill last year was “a bit like a top-heavy Jenga tower,” Hansen says: Lawmakers who might have had a concern about one small provision ended up opposed to the whole thing. Still, every housing policy the state adopted this year — from permitting more unrelated people per unit to allowing additional units on a property — will be more effective because of the others, Hansen says.

“We took a multifaceted approach and I think it’s going to pay great dividends for the state,” he says. “All of these policies fit together in a really comprehensive package and build on each other. While we won’t see immediate results, I would say five to 10 years from now we’re going to see some big changes because of this session.”