Construction Defects
Construction-Defect Bills Make Late Advance in Colorado Senate
Aldo Svaldi
April 30, 2014
Two bills designed to address the state's construction defects law made their way out of the Senate Affairs Committee Wednesday, with a third reportedly on its way.
Sponsor Sen. Jessie Ulibarri, D-Commerce City, is taking a three-bill approach this session towards the controversial law, which was passed in 2005.
The law's intent was to level the playing field between buyers and builders after a series of high-profile and problem-plagued projects.
But opponents argue it has made it too easy to sue and choked off the construction of for-sale affordable housing.
"You can't underestimate the impact the construction-defects bill had on mixed-use development," said Sen. Ted Harvey, R-Colorado Springs. "There has not been one mixed-use development started in the state since we passed construction defects."
Ulibarri said a complex mix of factors are at play, but notes only 2 percent of new housing units in the state are for-sale multi-family, versus a 20 percent share nationally.
A lack of new condo and townhome construction has left renting as the only option for many lower-income families, who can't afford single-family homes at the current median price of $240,000.
"It is getting further and further out of reach," Ulibarri said.
SB 219 would require the Colorado Division of Housing to prepare a study to present to legislators before March 15, 2015, on why there isn't more affordable housing construction in the state.
SB 216 directs the Colorado Division of Housing to design a program to rebate a portion of the insurance premiums builders pay as a way to boost their willingness to build more projects.
The Colorado Association of Home Builders, however, said no thanks to the offer of assistance.
"We don't want to perpetuate the myth that the affordability of insurance in the reason we are not engaged," said Jeani Frickey Saito, testifying for the group.
Ulibarri said a third bill, expected late Thursday, would more directly address the risk issue for builders by requiring homeowners to pursue arbitration or mediation before litigation.
The measure is strongly opposed by the Community Associations Institute, which represents community managers overseeing homeowner's associations. The CAI argues that bill would eviscerate a key consumer protection and shift the cost of faulty construction practices by builders onto HOA insurance policies and homeowners.
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SOURCE: www.denverpost.com