Opinion: Assembly has role in affordable housing fix

Not a week goes by that Colorado’s affordable housing crunch isn’t in the news. Yet almost all the remedies proposed in response, typified by Denver’s recent imposition of an “affordable housing tax“ on builders and homeowners, only mask the symptoms and do not address the underlying causes.

Maybe instead of masking the problem we should aim at making new condominium units affordable again. We do that by clearing away the bureaucratic, regulatory and litigation barriers that make building entry-level housing virtually impossible today.

Clearing  away many of these barriers is primarily a local responsibility, but state lawmakers have a role to play. Legislation is needed to address quirks in Colorado law which discourage the construction of entry-level housing.

Political obstacles have foiled past attempts to address that problem, but Senate Republicans are determined to overcome those obstacles in the 2017 session.

The old formula has been around for decades — for example, rent subsidies, rent controls, and onerous zoning rules. That formula remains amazingly popular with politicians despite a record of poor results. Instead, let’s address the root problem of high construction costs. Some of those cost be brought under control through common sense reforms.

The core problem is the high cost of building in many urban areas. When housing demand outraces supply, prices naturally rise. And boom times like Denver is experiencing, although welcome, make matters worse. But a big part of the gap between supply and demand lies in construction costs added not by the cost of land, materials and labor, but insurance costs imposed by the threat of construction defects litigation.

So what about the housing cost-escalators that are in our control, higher costs created by litigation, not by construction? Could lawmakers be doing more at the Statehouse about those? The answer is “yes.”  And here’s what we can do.

Experts say one major barrier to entry-level housing construction are provisions in Colorado’s construction defect law that tip the scales of justice so much in favor of plaintiffs, and plaintiffs’ attorneys, that builders just aren’t willing to risk financially devastating lawsuits by building affordable multi-family units. Recent efforts to correct this imbalance have been derailed by politics, even they enjoyed bipartisan support.

We should not deny a day in court to home buyers who are victims of a builder’s shoddy workmanship. But we also don’t want laws on the books that invite a steady barrage of litigation from the handful of firms that have made constructive defect lawsuits a lucrative specialty.

Lawmakers are asked all the time to find a delicate compromise on a complex issue. We must tackle this issue with a resolve to reach an equitable compromise that goes beyond politics and personalities. In the absence of Statehouse action, city officials have been passing reforms on a local, piecemeal basis. But, really, it’s time we found a workable statewide solution to a statewide problem.

Let’s be clear: Construction defects reform isn’t a silver bullet cure-all for the affordable housing shortage. But addressing the underlying obstacles to affordable housing would make a lot more sense than treating symptoms with a patchwork of subsides that will only perpetuate the problem, not fix it. That’s what lawmakers are supposed to do, so let’s get to work.

Kevin Grantham represents Senate District 2 in the Colorado Senate and serves on the Joint Budget Committee.