Endless Regulations Threaten Small-Scale Housing Providers

News about the state Legislature paving the way for government overreach is all too common for us on the Western Slope, but those of us in the multifamily housing industry have seen it become part of our daily work. While apartment managers such as myself strive to do the right thing, Front Range lawmakers continue year after year to make that more difficult. With each bill they pass, it becomes increasingly clear that knowledge of multifamily management is not required to pass laws on it.

Housing providers have seen a wave of new regulations in recent years that have forced small operators to consider getting out of the business before we are run out. Although we have felt the hand of government strengthen its grip on our ability to run a viable business, this year’s passage of Senate Bill 25-20 has put us in a clenched fist.

Through a legal concept known as “receivership,” this bill would give the state or any local government the authority to seize an entire apartment building for any violation of the state’s landlord-tenant code no matter the severity. To make matters worse, the government would then hand your private property over to a third party to control. This receiver could then drive your business into the ground and make it insolvent up to 50% before the government gives it back to you.

While anyone should be concerned about government seizing private property, what alarms responsible, small housing providers such as myself is the broad and ever-growing range of offenses that this applies to. SB20 references eight different statutes so it’s like navigating a maze just to figure out what it entails. How do I know what I have to do if I don’t even know what they are going to come after me for?

Outside of its intentions, what makes SB20 so discouraging is we now have yet another set of legal issues to deal with. Facing an onslaught of new regulations from state legislators in recent years, it has become a second job just trying to learn the new rules every year. Without a team of policy and legal experts that many large operators can afford to employ, I must take it upon myself to learn each year the new laws, what they mean for my property and how much money it is going to cost to comply with.

At the end of the day, what is truly saddening is the impact this is going to have on all of the renters that the bill’s proponents claim to be doing this for. Managing a property that my family built 30 years ago, I care about my tenants because they are more than that. They are my neighbors. While I do everything in my power to keep rents down to what I know they can afford, excessive regulations like SB20 are making that impossible.

The ultimate end game in this path is that small family operations such as ours will be forced out of this business trying to comply with endless regulations designed by individuals who refuse to listen to our perspective. It’s hard to keep rents affordable and maintain our property if I’m in court all of the time.

In the end, we will be forced into selling our family-owned businesses that we have poured decades of hard work and money into. All apartment buildings will be owned and operated by corporate giants from outside Colorado with no connection to our community. Rents will rise and revenues will leave our local economy.

The frightening thing is that is the best scenario. What we have already started to see is Colorado’s overregulated environment is even starting to scare away outside investors. What was once the most attractive state for investing in rental housing is now one of the least attractive and that’s without SB20.

Nobody in their right mind is going to risk building and maintaining multimillion-dollar properties if the government can seize it over a leaky faucet. With small operators unable to stay in business and no money being invested in building or renovating apartments, what do you think living conditions will look like then?

Unless Gov. Jared Polis vetoes this bill in the coming weeks, we are looking at government overreach and violation of private property rights to a level we have never seen. Just imagine the precedent this sets for other businesses that legislators want to go after in the future.