With the 2024 legislative session in the books, let’s review the bills of interest to AIA Colorado. This year, there were 46 bills on our tracking list out of 705 introduced. Most importantly, our practice act was renewed! Five of the nine bills we supported passed and both two bills we opposed failed. 2024 was a tight budget year so many bills that otherwise had a chance of passing did not have funding available.
Given the number of bills of interest to architects this year, we’ll review highlights in both June newsletters. This week we’ll cover our practice act and the many housing-related bills introduced. Please note that while some bills are still awaiting the governor’s signature, we do not anticipate any more will get vetoed than those already noted as such.
Read 2024 Legislative Sessions Summary – Part 2 here.
HB24-1329: Sunset Architects Engineers & Land Surveyors
Bill status: Signed into law
AIA position: Support
Summary: All licensed professionals in Colorado must undergo periodic reviews (at least every 15 years) by the state’s Dept. of Regulatory Agencies (DORA). They then make recommendations on changes or updates to the applicable practice act and the act must be repassed by the state legislature. Changes to our practice act were limited to cleaning up outdated language and references, as well as putting board-related practices in alignment with other similar DORA boards. There were no changes to the way architecture is practiced or the path to licensure. Land Surveyors successfully lobbied to implement their own version of continuing education requirements. We won’t have to go through another review for nine years.
Impact: If the legislature fails to pass a new practice act, architects would have no longer been licensed in the states. This was never a significant risk but AIA Colorado worked tirelessly to ensure a smooth process during the DORA report process in 2023 and this year’s bill as it made its way through the legislature.
HB24-1008: Wage Claims Construction Industry Contractors
Bill status: Vetoed by governor
AIA position: Oppose
Summary: For wage claims brought by individuals working in the construction industry, the bill requires that a subcontractor that receives a written demand for payment forward a copy of the written demand for payment to the general contractor within 3 business days after receipt. It specifies that a general contractor entering into a construction contract is liable for all amounts owed to an employee for the employee’s labor, construction, or other work, including amounts owed by a subcontractor acting under, by, or for the general contractor; and allows a general contractor to require certain information from each subcontractor acting under, by, or for the general contractor.
Impact: If passed, this would have raised construction costs on all projects in Colorado. General Contractors would have to increase their reserves and reevaluate subcontractors they would consider hiring. A similar bill that passed in California has increased tensions between GCs and subs.
HB24-1083: Construction Professional Insurance Coverage Transparency
Bill status: Failed
AIA position: Monitor
Summary: The bill requires the division of insurance (division) to conduct or cause to be conducted a study of construction liability insurance for construction professionals in Colorado.
Impact: Insurance rates for multifamily residential projects (and condos in particular) are significantly higher than other project types due to increased risk of lawsuits. Design and construction professionals, alongside the insurance industry, have been talking about the liability risk for years and don’t believe that a state-conducted study would have come to any other conclusion.
HB24-1125: Tax Credit Commercial Building Conversion
Bill status: Failed
AIA position: Support
Summary: The bill creates a new refundable tax credit to be claimed in tax years commencing on or after January 1, 2026, and before January 1, 2036. The credit may be claimed for certain costs related to the conversion of a commercial structure to a residential structure.
Impact: This bill was a victim of the state budget challenges faced this year. The appropriation of $5M would not have impacted a significant number of conversion projects though.
HB24-1152: Accessory Dwelling Units
Bill status: Signed into law
AIA position: Support
Summary: The bill requires a subject jurisdiction (in a metropolitan planning district) to allow, subject to an administrative approval process, one accessory dwelling unit as an accessory use to a single-unit detached dwelling in any part of the subject jurisdiction where the subject jurisdiction allows single-unit detached dwellings. The bill also prohibits subject jurisdictions from enacting or enforcing certain local laws that would restrict the construction or conversion of an accessory dwelling unit.
Impact: Local zoning codes have been a significant impediment to increasing the number of ADUs in the state. Even at current construction and financing costs, we believe there will a notable increased in ADUs constructed based on similar changes in other states.
HB24-1175: Local Goverments Rights to Property for Affordable Housing
Bill status: Sent to governor
AIA position: Monitor
Summary: The bill creates a right of first refusal and a right of first offer for local governments to certain types of multifamily rental properties. The right of first offer is temporary and terminates on December 31, 2029. For multifamily rental properties that are existing affordable housing consisting of not less than five units, a local government has a right of first refusal to match an acceptable offer for the purchase of such property, subject to the local government’s commitment to using the property as long-term affordable housing.
Impact: While this bill will preserve existing affordable housing in Colorado, the impact on architects directly will be minimal. Certain residential developers with an eye for a good deal may not be able to pursue for-profit improvement projects on affected multifamily residential properties.
HB24-1230: Protections for Real Property Owners
Bill status: Failed
AIA position: Oppose
Summary: The bill makes it a violation of the “Colorado Consumer Protection Act” to obtain or attempt to obtain a waiver or limitation that violates the aforementioned current law. It also requires a court to award to a claimant that prevails in a claim arising from alleged defects in a residential property construction, in addition to actual damages, prejudgment interest on the claim at a rate of 6% from the date the work is finished to the date it is sold to an occupant and 8% thereafter.
The bill increases the amount of time in which a lawsuit may be brought against contruction professionals from 6 to 10 years. IT also changes the time when a claim of relief arises to include both the discovery of the physical manifestation and the cause of the defect instead of when a defect’s physical manifestation was discovered or should have been discovered.
The bill voids a provision in a real estate contract that prohibits group lawsuits against a construction professional. It also prohibits governing documents of a common interest community from setting different or additional requirements than those in current law for a construction defect action.
Impact: If this bill had passed, it would have certainly increased our risk to lawsuits and as a result, would have substantially increased insurance costs for architects and all developers/construction professionals.
HB24-1239: Single-Exit Stairway Multifamily Structure
Bill status: Failed
AIA position: Support
Summary: The bill requires a local government to adopt a building code, or amend an existing building code, to allow up to 5 stories of a multifamily residential building to be served by a single exit. To satisfy this requirement, a local government shall incorporate by reference and adopt or adapt and adopt language from a portion of an existing building code that allows a single exit to serve no more than 5 stories of a group r-2 occupancy in the same building. If a local government so requests, the department of local affairs shall provide technical assistance to the local government in satisfying this requirement.
Impact: While taller single-stair residential buildings have a good safety record in other parts of the country, fire marshals lobbied hard against this bill. They had both general safety concerns and believed local governments may not have had the proper emergency response infrastructure to accommodate such buildings. We’ll continue to reach out to stakeholders to determine if there is an opportunity to reintroduce a similar bill next year.
HB24-1304: Minimum Parking Requirements
Bill status: Signed by governor
AIA position: Monitor
Summary: The bill prohibits a local government from enforcing minimum parking requirements for certain real property that is within a metropolitan planning organization. It applies to a land use approval for a multifamily residential development, adaptive re-use for residential purposes, or adaptive re-use mixed-use purposes which include at least fifty percent of use for residential purposes. Subject projects of 6-20 units may not have required parking minimums. Projects greater than 20 units may be required to provide no more than one parking space per unit. Various exceptions exist. Developers may opt to provide more parking, subject to maximums.
Impact: Developers interested in small-site residential projects are excited about the potential for more projects to become viable without existing onerous parking minimums. This will result in more work for certain architects though the bill won’t go into full effect until 2026.
HB24-1313: Housing in Transit-Oriented Communities
Bill status: Signed by governor
AIA position: Monitor
Summary: Local communities, of a minimum size within a metropolitan planning organization, are designated as transit-oriented communities. They must establish transit centers with minimum zoning densities of 15 units per acre. They must also establish and regularly report on a housing opportunity goal. The state will provide resources and funding to assist this effort.
Impact: Greater zoning densities required by the bill may result in more multifamily residential projects in affected areas.
HB24-1314: Modification Tax Credit Preservation Historic Structures
Bill status: Sent to governor
AIA position: Support
Summary: The bill extends and modifies the income tax credit for qualified costs incurred in preservation of historic structure. It increases the amount of the credit that may be awarded for residential rehabilitation expenditures from $50,000 to $100,000.
Impact: This bill made numerous minor tweaks to improve an existing program. Historic preservation architects may find more opportunities as a result but existing incentives are largely the same.
HB24-1352: Appliance Requirements & Incentives
Bill status: Failed
AIA position: Monitor
Summary: The bill prohibits the sale and distribution of certain air conditioners that are manufactured on or after January 1, 2027, unless they comply with certain technical standards to act as heat pumps for both heating and cooling. Financial incentives would be provided by the state for income-restricted households.
Impact: While this bill failed, the state remains committed to increasing adoption of heat pumps over natural gas-based HVAC systems.
HB24-1366: Sustainable Local Government Community Planning
Bill status: Failed
AIA position: Monitor
Summary: The bill requires state agencies to prioritize awarding grants that satisfy a list of criteria described in the bill. One requirement is that when updating a county or municipal master plan, the local government is to include a climate action element in its master plan. CDOT is to coordinate with metropolitan planning organizations to establish criteria that define growth corridors and identify these growth corridors. Having identified these growth corridors, the department and metropolitan planning organizations shall coordinate with local governments to develop transportation demand management plans for these growth corridors.
Impact: This bill could have improved local infrastructure that may have promoted new development, but it was unclear how much architects may benefit directly.
SB24-106: Right to Remedy Construction Defects
Bill status: Failed
AIA position: Support
Summary: The bill creates a right to remedy framework that must be followed prior to a claimant filing a lawsuit against any construction professionals, though the claimant has no obligation to accept the proposed remedy. Also under the act, a claimant is barred from seeking damages for failing to comply with building codes or industry standards unless the failure results in actual damage to real or personal property, actual loss of the use of real or personal property, bodily injury or wrongful death, a risk of bodily injury or death to, or a threat to the life, health, or safety of, the occupants. The bill would also increase the number of unit owners from a majority to 60% that must consent in writing to pursue a construction defect claim on behalf of an entire HOA.
Impact: We were hopeful that this bill would have reduced the number of construction defect lawsuits in multifamily residential projects. This would have opened the door to lower insurance rates and therefore more condominium development. While it failed, there remains strong interest at the capitol to find ways to make up our shortfall in the state of affordable entry-level homes such as condos.
SB24-112: Construction Defect Action Procedures
Bill status: Failed
AIA position: Amend
Summary: The bill adds certain disclaimers to the Construction Defect Action Reform Act (CDARA) regarding warranties. Construction professionals would not be vicariously liable for the acts or omissions of a licensed design professional for any construction defects. The bill would also update the process by which unit owners must be informed of and give consent to pursuing a construction defect claim on behalf of an entire HOA.
Impact: This bill was an alternative approach to accomplish what SB24-106 tried to do. We worked closely with the bill’s sponsor to ensure it wouldn’t be unfair towards archtiects, but he opted to pull the bill from consideration.
SB24-154: Accessory Dwelling Units
Bill status: Failed
AIA position: Support
Summary: The bill establishes a subject jurisdiction as the unincorporated portion of a county that is not within a unit owners’ association or an area identified as having a high fire intensity. Within these areas, local governments must allow the conversion of an accessory dwelling unit. The bill also prohibits subject jurisdictions from applying a restrictive design or dimension standard to an accessory dwelling unit.
Impact: We were interested in every ADU-related bill introduced but this version didn’t gain traction. Likely due to the low number of existing rural buildings that could have been converted into ADUs.
SB24-174: Sustainable Affordable Housing Assistance
Bill status: Sent to governor
AIA position: Support
Summary: The bill requires the department of local affairs to develop reasonable methodologies for conducting statewide, regional, and local housing needs assessments and reasonable guidance for a local government to identify areas at elevated risk of displacement. They must, every six years, conduct a statewide housing needs assessment that analyzes existing and future statewide housing needs and publish a report identifying current housing stock and estimating statewide housing needs.
The bill requires local governments to conduct and publish a local housing needs assessment to be used for the state’s regular reports. The bill outlines the process for a local government conducting a local housing needs assessment and for determining when a local government is exempt from conducting a local housing needs assessment. The state will offer funding and technical assistance.
Impact: One of the big challenges in affordable housing discussion was that there was no mutual understanding of which cities/counties were proactively trying to increase their housing stock and which have policies that limit growth. This bill will give the legislature a much better understanding of future housing development opportunities and what sorts of statewide policies would be most effective.
