Colorado
Colorado lawmakers revive renter and eviction protections while adapting to political realities
As the clock neared midnight on the penultimate day of last year’s legislative session, a core piece of progressive housing policy sputtered toward a bitter, procedural end.
The bill would have granted “just-cause” eviction protections to Colorado renters, essentially giving them the ability to renew an expiring lease even if their landlord wanted to move them out. The measure had cleared the House but then languished in the Senate amid opposition from moderate Democrats.
As the bill’s House sponsors watched through the glass in the Senate lobby, the clock ran out, and the measure died.
Nine months and more than 35,000 Colorado eviction filings later, the bill is back — albeit in a more limited form. Now dubbed “for-cause” eviction after undergoing changes, the revamped measure joins a half-dozen other proposals that seek to preserve affordable housing and keep renters in place. They also aim to realign the relationship between tenants and landlords in an era of record evictions.
The bill’s new version is sponsors’ acknowledgment of the complicated politics of housing policy, even in a legislature largely under one-party control.
“We are trying to make sure there’s a critical mass of us here in both chambers who are trying to make sure that renters aren’t left out of the conversation,” said Rep. Javier Mabrey, a Denver Democrat and eviction defense attorney who’s sponsoring the for-cause eviction bill. “When we hear the conversation about housing, a lot of it is about property tax cuts. A lot of it is about building more. But people who are renting right now need relief.”
The for-cause bill generally would require that landlords have cause, such as failure to pay rent, before evicting a tenant. As with last year’s version, the bill still would require that tenants be given first choice to renew their leases, but it no longer would require landlords to offer a new lease that’s substantially similar to the expiring one.
The revised bill also would give landlords a handful of exemptions — for instance, if a landlord was trying to move into the property or significantly renovate it. Last year’s bill was more restrictive on landlords, prompting concern it could protect “problem” tenants. The Colorado Apartment Association opposed it.
Other bills seek to limit eviction court fees, to ban software that uses algorithms to set rents and to improve local governments’ ability to retain affordable housing.
The package comes amid a parallel and similarly renewed push by Gov. Jared Polis to reform the state’s approach to land use.
The death of several housing bills last year sparked criticism that the legislature hadn’t done enough to help tenants, despite sizable Democratic majorities. Several legislators note that the crisis has only worsened: Eviction filings continue to surge in Colorado, hitting record levels in Denver last year.
Seeking help for rent-burdened residents
Nationally, a record high 22.4 million renter households — half of renters nationwide — spent more than 30% of their income on rent in 2022, according to new research from the Joint Center for Housing Studies at Harvard University.
State lawmakers’ scramble to blunt the impact of this year’s property tax increases helped fuel the desire by Democrats to direct relief to tenants, too.
After Proposition HH’s defeat by voters in November, a special session saw the passage not only of property tax relief bills but also of a measure to flatten the state’s tax refunds, providing $800 to each income-tax filer. That move predominantly helps lower- and middle-income earners.
The legislature also passed a special session bill that directed $30 million to the state’s rental assistance program for tenants facing eviction. That money, which must be spent by June 30, has still not begun to flow but state officials expect that to happen this week.
Another bill that had been discussed ahead of the special session was introduced this week. It would give tax credits to single renters who make up to $75,000 and to couples who file taxes jointly and make up to $150,000.
The credits — up to $1,000 for singles and $2,000 for couples — would decrease as income rises toward those limits.
Legislators said they learned lessons from last year’s losses and from the broader debate about how to address Colorado’s housing crisis.
They didn’t revive another defunct bill that would have allowed local governments to enact rent-control policies. Instead advocates and legislators are aiming to consolidate their efforts, increasing the odds of achieving a win on another landmark policy that’s closer in reach.
Limiting the for-cause measure was “a hard pill to swallow for our members,” said Carmen Medrano, the executive director of United for a New Economy. But “it was something we decided to do because the substance of the rest of the bill can be life-changing for our grassroots members.”
The new for-cause bill largely nixes a contentious requirement that would have forced landlords to pay relocation fees to tenants who are displaced. That change may help smooth some moderates’ ruffled feathers.
Another lesson? Some policies take years to achieve, legislators said, and require shifts in strategy and scope.
“The eviction crisis and the housing crisis continue to plague us, so we have to act,” said Sen. Julie Gonzales, a Denver Democrat who’s sponsoring the for-cause bill, plus a second measure to bolster regulations around the habitability of apartments.
“For-cause is a different bill than it was last year because we listened to feedback from stakeholders,” she said. “I still think it will be a meaningful policy, should the governor sign that bill into law.”
Asked about his position on the for-cause bill in January, Polis didn’t directly respond. He said only that he would support bills that lower the cost of housing while being skeptical of anything that does the opposite.
Some bills likely to be more contentious than others
Other bills are less controversial or have support from both Democrats and Republicans. Those include a bipartisan measure to eliminate the fee that tenants pay when they respond to an eviction filing.
But some legislation is still likely to be contentious. The revamped for-cause bill remains a top concern for Republicans, not to mention the Apartment Association and its allies. Another bill, which would prohibit rent-setting software that tenants’ groups have argued is used to fix prices in the market, also will likely trigger opposition.
Republicans and property owners alike have accused Democrats of over-meddling in the rental market, arguing increased regulation risks driving up costs and pushing landlords out. Democrats argue that renters, whipsawed by rent increases and dwindling units available to lower-income people, need direct help.
“I’m still going to ask the question that I think we were asking last year: What problem are we trying to solve?” said Rep. Lisa Frizell, a Castle Rock Republican. “Are we trying to legislate a few bad actors in this space when it comes to landlords, or are we trying to create a labyrinth of rules that landlords and tenants are going to have to navigate?”
Last year, it was infighting among Democrats that hampered both progressive and moderate bills. Those dynamics appear to have softened this time around: House Majority Leader Monica Duran has joined Mabrey as a co-sponsor on the for-cause bill, and Speaker Julie McCluskie — who voted against the bill last year — called it “a significant priority for our caucus” at a news conference last month.
Across the aisle, Frizell called out another bill that’s back for a redo this year: a measure that would grant local governments a right of first refusal to buy for-sale apartment buildings. The bill squeaked out of the legislature in May, only to be vetoed by Polis a few weeks later.
The bill, now revised, would limit local governments’ first-refusal purchase right to only subsidized housing units. Local officials would be able to step in and buy an apartment building that was funded with specific federal tax credits, for instance, before it was sold to a private buyer.
But for regular market-rate units, the bill would give local governments only the right to submit a first offer.
“Sometimes you take a big swing and try to get the policy through that you want, and then you adapt to make sure it passes,” said Rep. Andy Boesenecker, the Fort Collins Democrat sponsoring the bill. “That’s our goal this year.”
The Associated Press contributed to this report.
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Colorado
Colorado lawmakers duel over data centers: Grant millions in tax breaks or regulate them without incentives?
Colorado lawmakers are deciding this year between two disparate approaches on data centers — one that aims to lure them to the Centennial State with millions of dollars in tax incentives and another that would implement some of the strictest statewide regulations in the country on the booming tech industry.
Either of the two competing bills would create the state’s first regulations specific to data centers. Sponsors of both bills say they hope to minimize environmental impacts from the power and water demands of the centers, while also ensuring that the cost of new infrastructure they need doesn’t wind up on residents’ electric bills.
Both bills are sponsored by Democrats but differ widely in what they’d do.
The bill supported by the data center industry — House Bill 1030 — would incentivize companies to comply with regulations in exchange for large tax breaks. The legislation would not regulate data centers whose owners forgo a tax break.
The other bill — Senate Bill 102 — would offer no incentives, instead imposing regulations on all large data center development across the state. It is supported by environmental and community groups.
“We want to make sure that as data centers come here, they come on our terms,” said Megan Kemp, the Colorado policy representative for Earthjustice’s Rocky Mountain office.
The bills have landed as debate over the future of data center regulation intensifies across the state. Data centers house the computer servers that function as the main infrastructure for the digital world. They crunch financial data, store patients’ health information, process online shopping, register sports betting and — increasingly — make possible the heavy data demands of artificial intelligence.
Several companies have begun construction on large data centers across the Front Range in recent years. A 160-megawatt hyperscale facility is under development in Aurora and could consume as much power as 176,000 homes once completed.
The construction of a 60-megawatt data center campus in north Denver has angered those who live by the site and prompted Denver city leaders last week to call for a moratorium on new data center development while they craft regulations for the industry. Larimer County and Logan County have enacted similar moratoriums.
Hundreds gathered Tuesday night at a community meeting about the northern Denver campus owned by CoreSite. Frustration in the crowd — which filled overflow rooms and the front lawn of the building that hosted the meeting — erupted as residents of the neighborhoods surrounding the center expressed concerns about how it would impact their air quality, power and water supplies.
Attendees said they did not know the data center was being built until they saw construction underway.
CoreSite leaders had planned to attend the meeting. But they pulled out of participating the day before because of safety concerns, company spokeswoman Megan Ruszkowski wrote in an email. She did not elaborate on the concerns. A Denver police spokesman said the department did not have any record of a police report filed by CoreSite in the days prior to the meeting.
CoreSite’s absence left officials from the city and utilities to answer the crowd’s questions and field their frustrations. City leaders told attendees that they had no say in whether the data center could be built because there are no city regulations specific to the industry.
“Data centers are proliferating quickly and we don’t know all the impacts,” said Danica Lee, the city’s director of public health investigations. “That’s why we need this moratorium.”
Promises of future regulation meant little to the residents of Elyria-Swansea, where the data center is scheduled to go online this summer. More than an hour into the meeting, a man took the microphone. He noted that so much of the conversation had focused on technicalities — but the information provided had not answered a question on many residents’ minds.
“How do we stop it now?” he asked, to a loud round of applause from the room.
Transformative opportunity?
Some in the state Capitol think more data centers would be beneficial for Colorado.
Supporters of the tax incentive bill in the legislature said luring the industry to Colorado would create high-paying jobs, help pay for electrical grid modernizations and strengthen local tax bases.
“This could be transformative for the state,” said Rep. Alex Valdez, a Denver Democrat who is one of HB-1030’s sponsors.
In exchange for complying with rules, data center companies would be exempted from sales and use taxes for 20 years for purchases related to the data center, like the expensive servers they must replace every few years. After two decades, the companies could apply for an extension to the exemption.
To earn the tax break, data center companies would have to meet requirements that include:
- Breaking ground on the data center within two years.
- Investing at least $250 million into the data center within five years.
- Creating full-time jobs with above-average wages, though the legislation doesn’t specify how many jobs would be required.
- Using a closed-loop water cooling system that minimizes water loss, or a cooling system that does not use water.
- Working to make sure the data center “will not cause unreasonable cost impacts to other utility ratepayers.”
- Consulting with the Colorado Department of Natural Resources about wildlife and water impacts.
While the bill would exempt data centers from sales tax on some purchases, they would still be on the hook for all other taxes, Valdez said, and would bring both temporary and permanent jobs. The bill does not specify how many permanent jobs must be created to qualify for the tax break.
Dozens of other states have enacted tax incentive programs for data centers. Such incentives are a key factor that companies weigh when deciding where to build, said Dan Diorio, the vice president of state policy for the Data Center Coalition, an industry group.
“Colorado is not competitive right now,” he said.
Figuring out the projected impact of the bill on the state’s finances gets complicated.
The legislature’s nonpartisan analysts estimated that the state would miss out on $92.5 million in sales tax revenue in the first three years, assuming a total of 17 data centers would qualify for the tax breaks in that time period.
But Valdez said that is revenue that the state otherwise wouldn’t see if the data centers weren’t built here. And the companies would still pay all other state and local taxes, he said.
“We see it as unrealized revenue, rather than a tax cut,” he said.
Some of that lost tax revenue would be offset by an increase in income taxes paid by low-income families, according to the bill’s fiscal note.
That’s because the projected decrease in sales tax revenue in the first year of the program would decrease the amount of money available for the state to provide its recently enacted Family Affordability Tax Credit. State law ties the amount available for the family tax credit to state revenue growth and whether the state collects money above a revenue cap set by the Taxpayer’s Bill of Rights. TABOR requires money above that level to be returned to taxpayers.
If the state doesn’t have excess revenue, it can’t fund that tax credit.
In the next fiscal year, which begins in July, data center companies would avoid paying $29 million in sales taxes, which would trigger a change in the family tax credit. Low-income families would be made to pay a total of $106 million more, the fiscal note estimates.
Bill sponsors are planning to address the fallout for the tax credit in forthcoming amendments, Valdez said.
“We’re not out to trigger any negative impacts to low-income families,” he said.
Baseline guardrails
Forgoing tax dollars during a state budget crisis is a hard sell to Rep. Kyle Brown, a Louisville Democrat sponsoring the regulatory bill. He and other supporters of SB-102 aren’t convinced tax incentives are necessary to bring data centers to the state.
Major construction projects are already underway, he said. In Denver, CoreSite chose not to pursue $9 million in tax breaks from the city but continued construction on its facility regardless.
“The point of our policy is (putting) reasonable, baseline guardrails on this development so it can be smart,” Brown said.
Brown last session co-sponsored a failed bill with Valdez that offered tax incentives to data centers. Since then, however, he’s seen other states that offer tax incentives express buyers’ remorse, he said.
Brown pointed to concerns in Virginia about rising electricity costs due to data center demand and a proposal by the governor of Illinois to suspend the state’s tax credit so that the impacts of the data center boom it sparked could be studied.
His bill this session — co-sponsored by Sen. Cathy Kipp, a Fort Collins Democrat — requires that data centers over 30 megawatts:
- Draw as much power as possible from newly sourced renewable energy by 2031.
- Pay for any additions or changes to the grid needed to serve the data center.
- Adhere to local rules about water efficiency.
- Limit the use of backup generators that consume fossil fuels; if such generators are necessary, they must be a certain type that limits emissions.
- Conduct an analysis of the data center’s impacts on local neighborhoods, engage in community outreach and sign a legally binding good-neighbor agreement if the community is disproportionately affected by pollution.
Owners of data centers would also need to report metrics annually to the Colorado Department of Public Health and Environment. They would cover the center’s annual electricity consumption, how much of that power came from renewable sources, the total number of hours backup generators were used and annual water use.
Utilities, too, would face additional requirements.
The legislation would ban utilities from offering discounted rates to large data centers. It also would prohibit them from supplying electricity to a data center if doing so would affect the utility’s ability to provide power to its other customers — or its ability to meet state emissions reduction goals.
Environmental groups supporting the bill say the state needs regulations to make sure the increased electrical demand generated by data centers doesn’t expand the state’s use of fossil fuels or slow the retirement of fossil fuel-powered plants.
If not done thoughtfully, the groups said, the increased electrical load could imperil the state’s climate goals.
“What we need to avoid is a race to attract data centers that turns into a race to the bottom,” said Alana Miller, the Colorado policy director for the Natural Resources Defense Council’s climate and energy program.
If the legislature enacts SB-102, it would implement the strictest data center regulations in the country and would ward off future data center development, Diorio said. He sees many of the rules as unattainable.
“It would make it nearly impossible to develop a data center in the state of Colorado,” he said.
Conversations between the sponsors of the two bills are underway, Valdez and Brown said. Both expressed hope that a consensus could be found between the two pieces of legislation.
Neither bill had been scheduled for a committee hearing.
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Authorities have issued an evacuation warning for homes near a wildfire that broke out in southwest Boulder on Saturday afternoon.
Just before 1 p.m., Boulder Fire Rescue said a wildfire sparked in the southwest part of Boulder’s Chautauqua neighborhood. The Bluebell Fire is currently estimated to be approximately five acres in size, and more than 50 firefighters are working to bring it under control. Mountain View Fire Rescue is assisting Boulder firefighters with the operation.
Around 1:30, emergency officials issued an evacuation warning to the residents in the area of Chatauqua Cottages. Residents in the area should be prepared in case they need to evacuate suddenly.
Officials have ordered the DFPC Multi-Mission Aircraft (MMA) and Type 1 helicopter to assist in firefighting efforts. Boulder Fire Rescue said the fire has a moderate rate of spread and no containment update is available at this time.
Red Flag warnings remain in place for much of the Front Range as windy and dry conditions persist.
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