Learn more about NAIOP Colorado's efforts to advance public policy that protects and encourages responsible, sustainable development that creates jobs and benefits the communities in which our members work and live. 

Spring 2024 Public Policy Update

Published March 2024 | Submitted by Kathie Barstnar

As the legislative session gains momentum, the countdown clock is ticking, with 81 days left for impactful decisions. Curious about the timeline? Check out our Countdown Clock here for real-time updates.

Wondering what NAIOP Colorado is closely monitoring? Dive into our comprehensive bill tracker here for detailed insights into the bills we're tracking, supporting, opposing, or proposing amendments for. 

Here's a snapshot of three key issues capturing our attention: 

1. HB24-1116: Extend Contaminated Land Income Tax Credit

• This pivotal bill seeks to extend the Colorado tax credit, crucial for supporting the cleanup of contaminated brownfield sites. With unanimous approval in its initial committee, this bill proposes a 10-year extension, signaling positive strides towards environmental remediation and sustainable development. 

2. HB24-1175: Local Governments Rights to Property for Affordable Housing

• A contentious issue revived from last year, this bill, despite incorporating additional provisions for "notice," retains controversial elements granting local governments first right of refusal on multi-family property sales. In its current form, we stand in opposition. However, with potential amendments shifting it towards a genuine "notice" bill, we're poised to reconsider our stance. 

3. SB24-106: Right to Remedy Construction Defects

• Addressing the pressing need to streamline construction defect actions, this bill offers pre-courtroom resolution options. Engaging closely in its drafting process, we're cautiously optimistic about its path through the legislature. Facilitating the return of attainably priced housing to the market is instrumental in tackling Colorado's housing supply and affordability challenges. 

These highlights represent just a glimpse of our extensive bill tracking efforts. Many NAIOP Colorado members are actively participating in Capitol testimonies, advocating for our industry's interests. 

Eager to contribute further? Consider joining our Public Policy Committee or lend your expertise on specific bills from our tracking document. Reach out to Tyler Carlson, Chair of the Public Policy Committee, or Kathie Barstnar, Executive Director, for more details. Additionally, you can support our advocacy endeavors through financial contributions via the Public Policy Fund link on our website. 

Your interest and involvement drive our mission forward. Feel free to connect for additional insights or inquiries. Together, let's shape a prosperous future for Colorado's commercial real estate landscape.

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2023 Colorado Legislature Special Session Recap

December 2023 | Submitted by Erin Goff and Kathie Barstnar 

Following the sound defeat of Proposition HH on the November Ballot, Colorado’s Governor Jared Polis was forced to call a special session to address the impending property tax tsunami. While NAIOP Colorado and a coalition of similar CRE industry organizations encouraged the Governor to include Commercial Property Tax relief in his direction to the Legislature, sadly, he did not.

According to a preliminary report by the Common Cents Institute (CSI), the influence of commercial property taxes on property owners and the Colorado economy could result in fewer jobs, decreases in household incomes, and a $177M reduction in overall GPD.

While the bills passed in November’s special session of the Colorado General Assembly will offer short-term property tax relief, it will be crucial for state lawmakers to include commercial property owners in any prospective long-term property tax structure to contribute collectively towards alleviating Colorado’s affordability challenges.

Below are summaries of the legislation that was adopted and signed by the Governor following the special session:

• SB23B-001, sponsored by President Fenberg, Senator Chris Hansen, D-Denver, Speaker McCluskie, and Representative Chris deGruy Kennedy, D-Lakewood, increases the property value exemption for multifamily and single-family residential properties from $15,000 to $55,000 and decreases the residential assessment rate from 6.765 percent to 6.7 percent for the 2023 tax year. According to sponsors, this bill will provide over $430 million in property tax relief while protecting funding for locals services, like schools, fire districts and libraries. 
• HB23B-1001, sponsored by Representatives Leslie Herod, D-Denver, and Mandy Lindsay, D-Aurora, and Senators Julie Gonzales, D-Denver, and Janet Buckner, D-Aurora, increases statewide residential rental assistance to a total of $65 million, securing an additional $30 million on top of the $35 million from federal funds already allocated. The bill provides financial assistance for rent owed and other related costs for Colorado tenants making at or below 80 percent of the area median income.
• SB23B-002, sponsored by Senators Rachel Zenzinger, D-Arvada, and Jeff Bridges, D-Arapahoe County, and Representatives Shannon Bird, D-Westminster, and Lorena Garcia, D-unincorporated Adams County, allocates an estimated $35 million in federal funds to expand Electronic Benefits Transfer (EBT) benefits, which will help families purchase groceries from SNAP retailers during the summer months when child hunger is most severe. Families with children eligible for the national free and reduced-price school meals program will receive $40 a month per eligible child for the summer benefit in 2024.
• HB23B-1002, sponsored by Representatives Jenny Willford, D-Northglenn, and Mary Young, D-Greeley, and Senators Chris Kolker, D-Centennial, and Rhonda Fields, D-Aurora, expands the state Earned Income Tax Credit (EITC) for tax year 2023 to one of the highest state matches in the country. With the current state EITC at 25 percent, the average tax credit is $521. By increasing the EITC to 50 percent, the sponsors project that families will see hundreds of additional dollars back in their wallets next year.
• SB23B-003, sponsored by Senators Nick Hinrichsen, D-Pueblo, and Janice Marchman, D-Loveland, and Representatives Javier Mabrey, D-Denver, and Ruby Dickson, D-Centennial, adjusts the TABOR refund mechanism for the 2023 tax year to provide an equal refund of $800 for all taxpayers.
• HB23B-1003, sponsored by Representative Marc Snyder, D-Manitou Springs, President Fenberg, and Senator Kyle Mullica, D-Thornton, creates the bipartisan Commission on Property Tax to provide recommendations for long- and short-term property tax relief and evaluate the impact of property tax related ballot measures filed at the title board this year. The goal of HB23B-1003 is to gather leaders from across the state and key constituencies impacted by property taxes to map out potential long-term solutions to property taxes that have been rising since Coloradans voted to repeal the Gallagher Amendment in 2020. This task force will have a seat for an individual representing an organization that represents Colorado commercial or residential property owners.

Many of these bills and issues will resurface in the 2024 legislative session. To learn more about the important work that NAIOP Colorado's Public Policy Committee and our partners are doing to protect the CRE industry from costly and unreasonable mandates, please contact any one us:

• Chris Alcorn, NAIOP Colorado 2023 Public Policy Chair, Alcorn Construction
• Tyler Carlson, NAIOP Colorado Public Policy Vice-Chair & Past President, Evergreen Devco, Inc.
• Kathie Barstnar, NAIOP Colorado Executive Director 

Harness the "Power of One Voice" on issues of concern to the commercial real estate industry.
Join NAIOP's Public Policy Committee today and consider an Investment in the NAIOP Public Policy Fund. 

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Public Policy Update: 2023 Colorado Legislative Recap

Submitted by Wade Warthen and Kathie Barstnar - May 2023, Posted August 2023

Colorado’s General Assembly officially concluded the 2023 Legislative Session on Monday, May 8^th. The CRE community faced several challenging pieces of legislation during the session.

Despite the odds, NAIOP and the CRE community in general had several successful outcomes this year, thanks to the help of several testifying members, our Executive Director, Kathie Barstnar, and our lobbyist, Erin Goff, from Husch Blackwell Strategies. Metro districts were under attack, but we managed to stave off HB-1090 and pass SB-110 instead. We also fought off an attempt to repeal the statutory prohibition against local governments imposing rent control. A governmental right of first refusal affecting certain multi-family properties, HB-1190, was passed over our opposition, but we were successful in obtaining several amendments, making that bill less onerous.

The General Assembly killed SB-213, a major overhaul of Colorado’s local government land use system. The bill would have imposed state mandates and stripped local governments of their authority over land use and zoning. The measure died on the calendar after negotiations between local government supporters and those pursuing a statewide solution failed to find a compromise between the Senate and House versions of the bill.

The final days of the session saw the quick introduction and passage of SB-303 concerning property tax relief and corresponding TABOR adjustments. That bill triggers a voter approval measure on the November ballot to become effective.

The key bills NAIOP actively lobbied this session are listed below, along with brief descriptions and status.

SUPPORTED BY NAIOP AND PASSED:

SB-110: Transparency for Metro Districts. This bill requires that:

• an organizing metropolitan district include maximum mill levy and debt issuance in a service plan submitted for approval to municipalities and counties;
• beginning 2023, active metropolitan districts that have residential units and were organized after January 1, 2020, conduct an annual meeting with information about outstanding projects and debt, and allow for questions from the public;
• prior to issuing debt to a director of a metropolitan district on or after January 1, 2024, a registered municipal advisor certifies that the debt’s interest rate, prior to issuing debt, is the lesser of the current market interest rate or the AAA general obligation municipal bond rate plus 400 basis points; and
• sellers of residential property located within a metropolitan district provide the purchaser with the official website established by the metropolitan district.

Signed by the Governor.

HB-1005: New Energy Improvement Program Changes. The Commercial Property Assessed Clean Energy Program (C-PACE) allows certain property owners to obtain financing for new energy improvements, resiliency, and water efficiency improvements. Signed by the Governor.

HB-1023: Special District Construction Contracts. This bill increases the threshold for public notice of bids to $120,000 or more and is adjusted for inflation every 5 years. Signed by the Governor.

HB-1184: Low Income Housing Property Tax Exemptions. This bill expands an existing property tax exemption for vacant land held by a nonprofit organization to build and sell affordable housing units beginning in the 2024 property tax year. The bill also deems certain land held by community land trusts and nonprofit affordable homeownership developers as being used strictly for charitable purposes and therefore, constitutionally exempt from property tax.

HB-1255: Regulate Local Housing Growth Restrictions. This bill prohibits a local government from enforcing or enacting any local housing growth restriction. In the event of a declared disaster emergency, the local government may enact a temporary growth restriction for no more than one year after the disaster declaration.

SB-35: Middle Income Housing Authority. The bill clarifies that the Middle-Income Housing Authority Under has the power to enter into public-private partnerships and specifies that the affordable rental housing component of a public-private partnership is exempt from state and local taxation, among other changes.

SB-175: Financing of Downtown Development Authority Projects. This bill allows municipalities to adopt 20-year extensions for property tax increment financing arrangements for downtown development authorities, following an initial 30-year period and a one-time 20-year extension under current law. The bill continues a default split of incremental revenue, with 50 percent allocated to the municipality that established the DDA and 50 percent allocated to other governmental entities that levy property taxes within the boundary of the DDA. The bill also requires that the base value of the DDA advance by one year during each year of the automatic and recurring 20-year extension periods.

SB-304: Property Tax Valuation. This bill makes changes to the valuation of property by county assessors. The bill requires that assessors consider the following when determining a property’s actual value: current use; existing zoning or government land use, environmental regulations and restrictions; multiyear leases or other contractual agreements affecting the use of or income from the property; easements and reservations of record; and covenants, conditions, and restrictions of record.

OPPOSED BY NAIOP AND FAILED TO PASS:

HB-1090: Limit Metro District Director Conflicts. This bill would have prohibited a metropolitan district director or board member who approved the issuance of debt from acquiring any interest in the debt individually, or on behalf of an organization.

HB-1115: Repeal Prohibition Local Residential Rent. This bill was an attempt to repeal current law prohibiting a local government from enacting laws that control rent on private residential real property, or private residential housing.

HB-1118: Fair Workweek Employment Standards. This bill attempted to create new labor standards and requirements for employers in the food and beverage establishment, food and beverage manufacturer, and retail establishment sectors related to employee work schedules and wages.

HB-1171: Just Cause Requirement for Eviction of Residential Tenant. This bill attempted to create a “Just Cause Eviction Policy,” to apply to all residential premises in the state, except short-term rental properties, owner-occupied properties, and mobile home spaces, prohibiting a landlord from evicting a tenant unless there is just cause, as defined in the bill or certain no-fault exceptions, with conditions attached.

OPPOSED BY NAIOP BUT PASSED:

HB-1190: Affordable Housing Right of First Refusal. This bill creates the right of first refusal (ROFR), with certain exemptions, for local governments to purchase multi-unit residential properties for long-term affordable housing. Local governments are given the right to purchase a qualifying property for an economically substantially identical offer to an offer that a residential seller receives. Any purchase or sale agreement for the conveyance of a qualifying property is contingent on the first refusal of the municipality or county where the property is located. Qualifying properties include any multifamily or mixed-use property consisting of 10 or more residential units in urban counties, and five or more residential units in rural or rural resort counties, and only include buildings 30 years or older. Residential sellers must notify the local government of the price, terms, and conditions of an acceptable offer the seller has received, or for which the seller has entered into a contingent purchase and sale agreement with a prospective buyer. The timelines for notice, offer, and ultimate closing on the property were amended down to approximately 90 days with the local government required to assert its intent to exercise the right of first refusal within seven days, make an offer within 21 additional days and close within 60 additional days. The bill was amended to sunset in 5 years.

HB-1161: Environmental Standards for Appliances. This bill expands the list of appliances subject to statutory Water and Energy Efficiency Standards. The bill phases in prohibitions on the manufacture, distribution, or sale of certain fluorescent lights and heating appliances. The Air Quality Control Commission is required to lower the emission limits for new water heaters, boilers, and certain furnaces by 2029.

SB-184: Protections for Residential Tenants. This bill limits landlords from using certain financial and rental history information about prospective tenants during the rental application process, and places other requirements on landlords concerning rental applications. Specifically, under the bill, a landlord must:

• not inquire about the amount of income, except to verify that it exceeds 200 percent of annual rent, or credit score, if an applicant uses a housing subsidy;
• not inquire about income for applicants not using a housing subsidy except to determine whether annual income equals or exceed 200 percent of annual rent;
• not require applicant income greater than 200 percent of annual rent if an applicant is not using a housing subsidy.

Violations of these provisions constitute an unfair housing practice, with remedies allowed by law. Additionally, landlords are liable for an initial penalty of $50 to an aggrieved party for violations, and another statutory penalty of $2,500 if a violation is not cured within seven calendar days. Finally, the bill prohibits landlords from charging a security deposit greater than two months’ rent, and nothing in the bill precludes a landlord from gathering necessary financial information to verify that a tenant’s income meets requirements for income-restricted rental units if the landlord receives funding from an entity that requires such verification.

SB-273: Agricultural Land in Urban Renewal Areas. This bill limits the inclusion of agricultural land within an urban renewal area. The bill specifies that the land may only be included in a URA if it remains in the same URA in which it was originally included, or modified to include it, prior to June 1, 2010. Thus, agricultural land that was included in an expiring URA prior to June 1, 2010, is prohibited from being included in newly formed URAs. NAIOP is requesting the Governor to veto SB-273.

SB-291: Utility Regulation. The bill makes a number of changes to how utilities set rates and recover costs from consumers. It also commissions two studies and directs the Public Utilities Commission (PUC) in the Department of Regulatory Agencies (DORA) to adopt rules regarding rate filings, cost recovery limitations and natural gas infrastructure. The PUC must establish, by rule, mechanisms to align the financial incentives of investor-owned gas utilities with customers regarding fuel costs, including a mechanism to incentivize electricity production cost efficiency by January 1, 2025. The bill prohibits gas utilities from offering incentives to property owners for establishing new gas service and depending on what rules are adopted by the PUC, gas utilities may not charge a customer a fee or penalty for terminating gas service. The PUC must also investigate how residential development drives natural gas infrastructure costs.

SB-303: Reduce Property Taxes & Voter-Approved Revenue Change. This bill refers a ballot measure (“Proposition HH”) to voters at the November 2023 election. If approved, the bill allows the state to retain and spend revenue in excess of the current limit (“Referendum C cap”). With voter approval, the bill creates a new limit (“Proposition HH cap”). Revenue retained in excess of the Referendum C cap, up to the Proposition HH cap, is deposited in a newly created account, to be first used to reimburse local governments (“backfill”) for their lost property tax revenue as a result of the assessment rate and value reductions. Lost property tax revenue that results from reduced mill levies are not reimbursed. Second, the bill transfers five percent of the amount retained under Proposition HH or $20 million, whichever is smaller, to the Housing Development Grant Fund. Any retained amount remaining after reimbursements and such transfer is transferred to the State Education Fund. Money transferred to that fund must not supplant General Fund appropriations for school finance. The bill creates a limit for local property taxes beginning in property tax year 2023, excluding school districts and home rule cities and counties, unless the district adopts a resolution or ordinance to exceed it. Under the bill, growth in revenue is limited to the rate of inflation in the Denver-Aurora-Lakewood Consumer Price Index. The bill includes several exceptions when calculating the limit including revenue from new construction. The bill makes temporary assessment rate reductions for residential property classes and expands reductions in valuation. Under the bill, a dollar amount set in statute may be subtracted from a property’s market valuation before application of the assessment rate. The bill creates two new subclasses of residential property for owner-occupied primary residences and qualified-senior primary residences. The new subclasses are effective beginning with the 2025 property tax year. The bill makes temporary assessment rate reductions for most nonresidential property classes.

PASSED WITH NAIOP-SUPPORTED AMENDMENTS:

HB-1233: Electric Vehicle Charging & Parking Requirements. This bill includes a number of provisions concerning electric vehicle charging stations, including electric code requirements, local parking regulations, property tax provisions, and potential charging stations at rest areas. The State Electrical Board must adopt rules requiring that applicants for an electrical permit must comply with the Model Electric Ready and Solar Ready Code, which requires multifamily buildings to have charging equipment installed. These rules are effective March 1, 2024. Local governments may decide whether to apply existing codes or the new rules to development that is already permitted. The bill prohibits a lease agreement or a homeowner’s association from preventing a resident from installing an electric vehicle charging station on parking spaces that are assigned or otherwise available to the resident. It further prohibits parking restrictions for plug-in vehicles. The bill specifies how parking spaces served by charging stations must be counted towards local government minimum parking requirements. It also prohibits local governments from prohibiting the installation or utilization of charging stations except when addressing safety concerns. From tax years 2023 through 2029, electric vehicle charging stations are exempt from property tax.

OTHER NOTABLE BILLS:

SB-213: Land Use. This bill died on the calendar. The bill would have made significant changes to local requirements for model codes, density requirements, and requirements for planning assessments, with the stated goal of increasing access to affordable housing. It is expected that Governor Polis will call a special session for the Legislature to reconsider this bill.

As introduced, the bill would have imposed top-down zoning and land use standards on municipalities, creating multiple “uses by right”, including accessory dwelling units (ADUs) on single-family lots, middle housing anywhere the municipality allows single-unit detached dwelling units, and minimum density standards in certain areas.

As amended by the Senate, the bill was made more palatable, though still not desirable. Most notably, the Senate reengrossed version included the following changes:

• Removed most land use and zoning preemptions;
• Mandated municipalities to adopt affordability strategies; and
• Removed legislative declarations that attempted to establish traditionally local matters as being of mixed state and local concern.

As amended by the House, the bill was largely returned to its original form—preemptions on zoning authority and mandates for ADUs were amended back in, as was multifamily housing in transit-oriented areas. Counties would be subject to mandates of upzoning in transit areas, although middle housing mandates were not added back in. Additionally, the House

• Reinserted prohibitions on common interest communities/HOAs regarding ADUs and multifamily housing in key corridors and transit areas; and
• Reinserted preemptions of planned unit developments regarding ADUs and multifamily housing in key corridors and transit areas.

 Special thanks go out to Husch Blackwell Strategies for their contributions to this article.

If you have questions or would like more information, please contact NAIOP Colorado Executive Director Kathie Barstnar. 

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Public Policy Alert: Governor Polis vetoes affordable housing bill

Submitted by Kathie Barstnar, NAIOP Colorado Executive Director
Posted June 7, 2023

Last night Governor Polis vetoed HB23-1190. This bill would have given cities and counties and their designees the right to step in when the owner of an apartment property has agreed to sell it and take possession instead if it offers “substantially” the same price (Right of First Refusal). The stated intent of the bill was to preserve below-market-rate housing. However, the unintended consequences of the bill were many and significant. An assessment by CoStar estimated HB23-1190 would create a 3.23% cumulative decrease in the value of Colorado commercial real estate, equivalent to the loss of $1.57 Billion in value in what’s now a $48 billion market.

We had received calls from out of state Investment Firms and REIT’s expressing their hesitancy to invest in Colorado if this bill were signed into law. One firm reported pulling out of a deal in process due to the passage of HB23-1190.

Governor Polis understood the challenges that this bill would create. Read the Governor's Veto Letter which explains his thinking.

This bill and others like it will be back in the 2024 legislative session. Our plan is to be involved in the drafting of those to ensure that these types of unintended consequences are identified early and addressed. Housing (both affordable and attainable) in Colorado is an urgent need. Creating and sustaining this housing in ways that don’t add costs is imperative.

If you have questions or would like more information, please contact NAIOP Colorado Executive Director Kathie Barstnar. 

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Public Policy Corner Update for March 2023

By Chris Alcorn, Alcorn Construction 

The Public Policy Committee along with Chair Chris Alcorn, Executive Director Kathie Barstnar, and our lobbying firm Husch Blackwell are hard at work on behalf of NAIOP members as the legislative session is in in full swing.

The committee recently voted to support four bills:

• HB-1005 New Energy Improvement Program Changes - Adds resiliency improvements and water efficiency improvements to the list of energy efficiency improvements eligible for C-PACE funding.
• HB23-1023 Special District Construction Contracts – Raises the requirement for notice on special district construction bids from $60,000 to $120,000 with adjustment for inflation every 5 years.
• SB23-035 Middle-Income Housing Authority Act – Clarifies how the middle-income housing authority can enter into public-private partnerships.
• SB23-110 Transparency for Metropolitan Districts – Many of the bills aimed at metro districts would jeopardize their existence as a means for developers to provide public infrastructure and spread the cost to homes and buildings.  The bill aims to solve the issues claimed by those that would eliminate metro districts by adding transparency and accountability to the metro district process and was written by pro-business and pro-real estate stake holders.

And to Oppose three bills:

• HB23-1090 Limit Metropolitan District Director Conflicts – This bill would eliminate many metro districts by not allowing developers (people with “conflicts of interest”) to purchase the debt in the early phases of a project when the debt has very little value to anyone other than the developer and investors.
• HB23-1115 Repeal Prohibition Local Residential Rent Control – This is a very dangerous bill that seeks to repeal the Colorado’s current statutory ban on rent control, which would allow counties and municipalities to enact ordinances to control rent in private residential property.
• HB23-1161 Environmental Standards for Appliances – This bill controls many appliances, but appears to be a back-handed way to eliminate the use of gas appliances in the state by requiring appliance to meet point of use emissions standards that gas appliances cannot meet.

You can access the full list of bills at the NAIOP bill tracker: https://coloradocapitolwatch.com/bill-analysis/410/2023/0/.

Our Public Policy goals for the year continue to be to advocate on behalf of members, to communicate our mission and actions better to our members, and to develop a more robust fundraising program in order to maximize the impact of our efforts on the political process in Colorado.

Our next meeting is Wednesday, February 22nd at 11:30 at the NAIOP offices.  Please reach out to Chris or Kathie to have the invitation added to your calendar if you would like to join us.

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Energize Denver and Building Performance Update

By Kathie Barstnar, NAIOP

The Energize Denver Performance Requirements updated regulations were adopted on November 17, 2022, originally passed by City Council on November 21, 2021. The ordinance establishes energy use intensity (EUI) targets for commercial and multifamily buildings 25,000 square feet and larger, prescriptive measures for buildings 5,000-25,000 sq. ft., and electrification updates to building code over time. The purpose of these new requirements is to push buildings towards net zero emissions by 2040 through increased energy efficiency, electrification, and renewable energy adoption. 

Energize Denver is launching a new website with technical guidance, resources, and vendor training videos for the performance requirements in December. New compliance notices with building’ performance targets will be mailed/emailed in early January 2023.  

The Energize Denver team is hosting a 2-part webinar series in December to delve into the technical details of the performance requirements: 

• Register for Part 1 on December 7 from 12 – 1:30 p.m. MT on background of the ordinance, equity considerations, setting 2030 targets, target adjustments, an electrification credit, and the renewables credit. 

• Register for Part 2 on December 15, 12:00 – 1:30pm MT on alternate compliance options and their minimum requirements, performance evaluation, and penalty assessments. Updates on manufacturing, agricultural, and industrial buildings, and the small building prescriptive requirements.

Please visit the Energize Denver Hub for more information. If you require further assistance, please contact the Hub at (844)-536-4528 or at [email protected].  

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March 2022 Public Policy Update - Energize Denver Building Energy Performance Requirement

By Brie Martin, Director of Property Management, Prime West Real Estate Services, LLC

Since the adoption of the Energize Denver Building Energy Performance Requirement, I’ve spent a lot of time explaining to clients the details of the initiative, what it means to building owners, and how we can plan for it over the next 5-10 years. The ordinance defines Net Zero Energy as highly energy efficient, all electric, provider of demand flexibility to the grid, and powered by renewable electricity. This really means two things for building owners: site EUI (Energy Use Intensity) reduction and electrification of space and water heating systems.

The ordinance establishes requirements for all buildings in the City of Denver over 5,000 square feet, which is important to note as smaller buildings had previously been exempted from various ordinances. The purpose of this ordinance is to push towards net zero emissions by 2040, therefore requiring all buildings to do their part. The first main target year is 2030, with the goal to reach 30% energy savings across all large buildings in the City of Denver. An essential component to this 30% reduction is the phased in approach of partial electrification to space and water heating systems by 2027. The ordinance does allow building owners to request an alternate timeline as long as the same end goals are maintained.

The City of Denver will provide guided assistance to support both aspects of this ordinance. One support mechanism is a resource component on their website that will be added sometime during 2022. This resource will include a performance portal, how-to-guide, checklists, education, and financial assistance, among other components. The second mechanism is working alongside city building code and permitting to help incentivize replacement of equipment within the timeline specified through the ordinance.

The first step for all building owners is to understand the 2030 target EUI for building type, site EUI for the specific asset, useful life of space and water heating systems, and if all lighting is or has been converted to LED. The next step is to compile a 5-10 year compliance or maintenance program for their asset. 

Most building budgets are created in the third quarter of the preceding year, therefore waiting for the resource hub to be complete may create a tricky timing obstacle. Gathering as much information about your building over the next year will help to determine when and how capital money should be spent. 

The 2030 target EUI for building type (buildings 25,000 sq ft and higher) can be found on the Energize Denver Hub website. As an example, buildings deemed to be office have a 2030 EUI target of 48.3. Keep in mind that interim targets for 2024 and 2027 will be building specific and mailed out to owners in March 2022. A building’s site EUI can be found on the Energy Star Portfolio Manager. This will help building owners and property managers to create realistic timelines for each asset. As owners and property managers await the interim target guidelines, it is important to begin the process (if one does not already exist) of understanding what mechanical components in your building are not electrified and when their useful life expires. It would also be beneficial to complete a simple ASHRAE Level 1 Energy Audit which can run around $5,000 or more depending on the size of your asset. If no equipment is reaching the end of their useful life over the next 8 years, other means of achieving the target site EUI will need to be completed. An ASHRAE audit will help to compile possible energy saving components, which include high level energy saving estimates and costs.

Buildings 5,000 sq ft - 25,000 sq ft have a simpler method to contribute to the cause, although all buildings are required to partially electrify space and water heating systems upon system replacement. They must either install all LED lights or install solar panels. The smaller the building, the longer the building owner will have to comply, with the last year being the interim target of 2027. If an owner chooses to go the route of an LED upgrade, one item that will need to be considered is whether the current fixtures are LED bulb compatible or if upgrading to LED fixtures will be the route that needs to be taken. 

The City of Denver and the Task Force is continually learning from the process and will re-evaluate alternative compliance options, technological advancements, targets and timelines as we move throughout this process.  As items are re-evaluated, it is important to lean on local resources to stay in the loop.  The Office of Climate Action, Sustainability and Resiliency (CASR) is staffing up to implement these programs.  If you have questions before the help center is up and running, don’t hesitate to reach out to Sharon Jaye, CASR Energize Denver Policy Manager ([email protected]) or Daniel Rayner, CASR Buildings Policy Outreach Administrator ([email protected]). 

NAIOP Colorado continues to monitor the rules and regulations as they are developed and adjusted to ensure they meet the direction of the Energize Denver Task Force to include flexibility and options to help us all move from aspiration to implementation.

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March 2022 Public Policy Update - NAIOP Advocating for Greater Flexibility on Denver’s Affordable Housing Proposal 

By Caitlin Quander, Partner at Brownstein Hyatt Farber Schreck

As you may be aware, the City & County of Denver is in the process of adopting new regulations intended to create more affordable housing options and increasing funding for Denver’s Affordable Housing Fund. The proposal, which is also known as Expanding Housing Affordability (EHA), focuses on two main areas: 

• Requiring new residential development of 10 units or more to designate between 8% and 12% of the units as affordable, regardless of whether the home is for rent or for sale. In higher-cost areas of the city, such as downtown, developers would need to provide 2% to 3% more affordable units. 
• Gradually increasing the “linkage fee,” which is a fee on development used to build and preserve affordable housing for people with lower incomes. Projects providing affordable housing are not subject to linkage fees. 

Over the past year, NAIOP has been working diligently on your behalf to provide data-driven, pragmatic feedback on the draft proposal. Because of our advocacy efforts, city staff has already made the following changes: 

• Phasing in linkage fee increases over a three-year period to allow the market to adapt. The original proposal would have applied the 200%-900% linkage fee increases shortly after the ordinance is approved. 
• Cut the linkage fee increases nearly in half for all industrial development. 
• Exempted ground floor retail from all linkage fees. 

In order to be grandfathered under the current linkage fees and requirements, projects must meet the following milestones under Site Development Plan (SDP) review: 

• Concept SDP submitted by June 30, 2022; AND
• Final SDP approved by August 30, 2023 (14-month window)

This 14-month window is based on median review times for concept and final SDP approvals. Based on other peer cities and as we are already seeing in Denver, SDP submittals have increased and thus review times are likely to follow suit. Therefore, NAIOP is working hard to advocate on your behalf for flexibility for projects that are moving through the review process in good faith. 

Over the next few months, City Council and the Mayor need to hear directly from you too! Please consider calling or emailing your City Council representative and the Mayor’s staff on this important issue.   

Click HERE to contact City Council members.

Contact the Mayor’s Office by reaching out to his staff: Analiese Hock ([email protected]) and Brad Weinig ([email protected])  

It’s important to note that our industry is committed to being a part of the affordable housing solution in Denver, but will not overlook the importance of limiting the potential unintended consequences still imbedded within the proposal. The city will continue to take in feedback between now and anticipated adoption of the proposal in June of 2022.  

Have questions or feedback, please contact Caitlin Quander at [email protected]. 

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January 2022 Public Policy Update 

By Erin Goff, Principal at Husch Blackwell Strategies

August 2021 Public Policy Update 

By Kathie Barstnar, Executive Director, NAIOP Colorado

The Colorado General Assembly adjourned on June 8 after 116 days. This session has been described as one of the most controversial in recent memory and many in the business community believe the impacts will be felt for many years. Click Here for a recap of all the bills that NAIOP worked on in 2021.  A couple of the key bills were:

1. HB21-1286 Energy-Use Benchmarking and Performance Standards for Buildings: This is one of the bills on which NAIOP Colorado secured a significant victory. At the beginning of the session it appeared that this bill would sail through as drafted. As introduced it would have required owners of buildings 50,000 sf or greater all across the state to benchmark their energy usage AND reduce such energy use by 15% by 2026 with additional reductions being designated by the Air Quality Control Commission (AQCC) every five years until 2040. Additionally, it would have required severe penalties for non-compliance including a $.02 per sf per day fine until compliance is achieved. NAIOP, along with a wide coalition of other building related organizations opposed this bill as overreaching and too aggressive. After significant testimony in opposition and a threat by the House Republicans to filibuster the bill, sponsors met with our industry representatives and an agreement to pivot the bill to a task force was forged. The task force will meet and determine ways to bridge the gap from the aspirational goals to implementable actions with a statewide reduction of 15% by 2026 and setting up a plan for future task force input to the AQCC. NAIOP Colorado has been given a designated position on the task force. Stay tuned for updates as the Task Force starts to meet later this year.
2. HB21-1117 Local Government Authority to Promote Affordable Housing Units. This bill authorizes local government to require construction of affordable housing within their boundaries without being in violation of the state statute prohibiting rent control by exempting local government land use regulations that restrict rents on newly constructed or redeveloped housing units. NAIOP opposed this bill unless amended to provide guard rails on what local governments could implement. A qualification was added stating that “the (local) regulation provides a choice of options to the property owner or land developer and creates one or more alternatives to construction of new affordable housing units on the building site.” It was signed by the Governor and now local governments are considering what policies to implement. Our efforts now switch to working with county and municipal governments as they consider different ordinances with affordable housing requirements.

The City and County of Denver has been very active on several fronts including affordable housing and energy efficiency along with ballot initiative submissions in anticipation of the fall elections of 2021 and 2022. Here are some updates:

1. Energize Denver Task Force: As an outcome of the recently completed Climate Action Task Force 2020 Recommendations Report the Energize Denver Task Force has been meeting the past 8 months to develop a plan to reduce energy use in commercial buildings to meet the 2030 and 2040. Kathie Barstnar has represented NAIOP Colorado on this Task Force. The final meeting of the task force is set for August 19 after which their proposed report will be presented to the Denver City Council. Here is a link to the latest draft report published on July 29, 2021. As soon as the updated report is available, we will make sure you have access to it and will request your participation during its process through the City Council and Regulatory drafting process.
2. Denver Expanding Housing Affordability: In line with above report on HB21-1117, the City of Denver is undertaking a public process to involve: 1) Citywide zoning incentive for affordable housing; 2) increase to the City’s linkage fee; 3) requiring affordable housing as part of developments. For more information, please visit the City and County of Denver's Expanding Housing Affordability website.  Please consider sharing your feedback to the City about what you want to see in affordability or sign up to participate and attend an upcoming industry focus group. Click Here for more details. 

For more information regarding the Chapter's Public Policy efforts, please reach out to Public Policy Chair Caitlin Quander or NAIOP Executive Director Kathie Barstnar.

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