In the final day of Colorado’s 2023 legislative session, the state Senate passed HB23-1190, Affordable Housing Right of First Refusal, which was previously passed by the Colorado House in March. The final act was sent to Governor Polis for further action on May 17.
HB23-1190 provides local governments or their assignees (the state, any political subdivision or housing authority in the state, or the Colorado housing and finance authority) with a right of first refusal to purchase qualifying rental property before it can be sold in the private market. The government has three months to exercise this right and must present an “economically substantially identical offer” to an offer that the seller receives. The government’s right to purchase is contingent on preserving or converting the property to long-term affordable housing.
If it becomes law, HB23-1190 will be the first state to establish an affordable right of first refusal for rental properties. Like other failed housing policies like DC’s Tenant Opportunity to Purchase Act (TOPA), Colorado’s right of first refusal legislation will not create any new affordable units or relieve the pressure of limited housing supply. Instead, it will stymie real estate transactions and discourage investment in new multifamily housing in the state of Colorado.
The Colorado Apartment Association (CAA) worked tirelessly to voice the rental housing industry’s perspective in this session and inform policymakers about the pitfalls of this bill. Drew Hamrick, General Counsel and Senior Vice President of Government Affairs at CAA and the Apartment Association of Metro Denver, gave additional insight into this adverse legislation: “Our success in defeating other adverse legislation ultimately consumed too much political capital. There were 81 amendments aimed at many of the issues in this bill causing moderate Democrats to drop their opposition. These negotiated changes did not address the fundamental problem of taking a valuable property right from Colorado citizens.”
Now that the bill has been sent to the Governor, he may sign the bill into law, veto the bill or let the bill become law without his signature. The bill could become law without the governor’s signature after 30 days if he receives it after the General Assembly’s session.
For more information on TOPA or right of first refusal policies, please contact Joe Riter, NAA’s Senior Manager, Public Policy.