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Rent Control

Boulder Rent Control

Boulder and rent control have an interesting history, and past efforts to impose rent control in the city directly contributed to a statewide response from the Colorado Legislature. In 1980, the City of Boulder passed a citizen initiative to impose rent control in existing buildings that would have capped and tightly regulated maximum rental rates across the city.

In response, the Colorado State Legislature banned rent control the following year by statute in C.R.S. 38-12-301. The current version of that statute, including changes that were made in subsequent amendments, can be found here. The law generally states that rent control on private housing in Colorado is a statewide concern and prohibits counties and municipalities from enacting ordinances controlling rent on private residential property or units.

What about other types of “affordable housing” arrangements? The statute does not prohibit voluntary agreements and deed restrictions between developers applying for a building permit and the local municipality designed to provide affordable housing. The law also strictly prohibits a county from denying a permit because the applicant did not want to enter into an agreement limiting rent increases.

Telluride Rent Control

In 1994, the Town of Telluride implemented an ordinance to add affordable housing in its mountain community by mitigating the effects of all new development in the area. The goal was to provide housing for lower income employees brought to the Town by the new development, so that these employees could afford to work and live in Telluride. The ordinance provided options to developers in the Town such as creating units with fixed rental rates, imposing deed restrictions, conveying land to the Town, or paying fees.

One developer challenged the ordinance as a violation of C.R.S. 38-12-301’s ban on rent control. The case of Town of Telluride v. Lot Thirty-Four Venture LLC, 3 P.3d 30 (Colo. 2000) went up to the Colorado Supreme Court on appeal. The Supreme Court held that the ordinance did violate the statute and was an invalid form of “rent control.” The Colorado Supreme Court’s opinion in that case, which can be viewed here, continues to have major implications for private property owners and developers throughout Colorado.

Following that court decision and a subsequent amendment to C.R.S. 38-12-301, one of the keys to affordable housing requirements now is whether the restriction is part of a voluntary agreement. While communities can still encourage affordable housing through voluntary agreements and incentives with developers, any mandatory affordable housing requirements must be viewed through this lens: does it violate Telluride?

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