Nine years ago, one of Silverthorne’s few income-restricted housing properties was sold to a private firm. The sale — at a price that was double the property’s assessed value — raised worries in the high-cost mountain community that the new owner of the Blue River Apartments might lift rent caps that had kept its 78 units affordable when the requirements lapsed.

That expiration had been set for this year, and local officials were sufficiently concerned that they struck a deal with the new Greenwood Village-based owners to extend the affordability protections through at least the end of 2025, in exchange for $650,000.

But if the town had known about the sale ahead of time back in 2015, said Ryan Hyland, Silverthorne’s town manager, then officials could have tried to cobble together the money to buy the apartment complex — or arrange its sale to someone else.

As Colorado faces a tidal wave of expiring affordability requirements in the coming years, state lawmakers hope to give local authorities the opportunity Silverthorne didn’t have. House Bill 1175, which has already passed the House, would grant municipalities a right of first refusal to buy subsidized-housing properties when they come up for sale and would also require more notice of expiring affordability covenants.

Once the owner reached a price with a private buyer, the town or city — or a group acting on its behalf — could step in and match the offer, ensuring the units wouldn’t convert to market-rate rents once affordability requirements expire.

“When those expire, (the new owner) could be charging market rents. That’s a smart business decision, if you’re purchasing a property and if you’ve got that on the horizon,” Hyland said. “As you can imagine, there’s those types of deals that happen and the local government has no idea they’re happening, so there’s no opportunity for conversation.”

In the case of Blue River Apartments, as the initial expiration date approached, the president of Tralee Capital in 2020 told the Summit Daily that he wasn’t ready to say how the rental rates would change.

The bill passed the House 38-23 earlier this month and is now headed to the state Senate. It’s the second attempt by a group of Democratic lawmakers to pass a right-of-first-refusal policy, which they say would give local governments the chance to protect renters from for-profit developers that purchase properties and hike rents.

The first swing at passing the policy was a more expansive approach that also would have applied to sales of market-rate buildings. It passed the legislature last year after extensive debate and negotiations.

But business groups successfully lobbied Gov. Jared Polis to veto it, sparking sharp criticism from the Democratic legislators who backed it.

The veto spurred supporters to narrow their approach this year. They focused on preserving the state’s existing subsidized housing stock, which is in danger of shrinking in coming years, said Rep. Andy Boesenecker, a Fort Collins Democrat.

Colorado is home to roughly 111,000 subsidized units with affordability requirements, according to Colorado Housing and Finance Authority data. It’s expensive and complicated to build subsidized housing projects, and developers lean largely on federal tax credits to make the financing work.

Those tax credits include requirements that rental rates be capped based on certain income levels.

But the requirements are time-limited, often lasting at least 30 years. In the coming decade, 15,000 affordable units here will no longer be subject to the caps that keep them within reach for lower-income Coloradans.

That doesn’t mean those properties will immediately be sold or switched to market-rate rents or prices. But the looming expirations are a warning sign for housing advocates as they scramble to protect the state’s affordable housing stock.

When subsidized properties with expiring affordability requirements are purchased by private companies, “we see quick and significant increases in rent — we see less of an investment in maintaining the property and caring for residents,” said Kinsey Hasstedt, the senior program director for state and local policy at Enterprise Community Partners. “So we are trying to disrupt that.”

Preserving housing or chilling markets?

Opponents and skeptics, representing business groups and property owners, have argued that the bill would hamper development in the state.

“Our biggest fear all along with this has been: Are we going to create a chilling effect on capital and the markets, and then we won’t get the results that we want, which is more housing in the marketplace?” said Ted Leighty, the CEO of the Colorado Association of Home Builders, in testimony during an initial committee hearing in February.

But supporters say preserving subsidized housing is particularly important now — not only because of the expiring affordability requirements but also because of Polis’ preferred solution to the housing crisis: more housing, built more densely, across Colorado cities.

While some of the advocates backing the right-of-first-refusal bill also support Polis’ land-use reforms, that policy approach, if successful, will take years to bear fruit. They repeatedly have stressed the need to provide help in the meantime, given the severity of the state’s housing affordability crisis.

“We have to start by preserving the existing affordable housing that we have,” Hasstedt said. “Otherwise, we’re just going to keep digging the hole deeper, and we’re never going to get out of it.”

The change in approach, along with amendments made during the bill’s journey through the House this year, has successfully neutralized some of last year’s opposition, including from groups representing bankers and title insurers.

But other old foes, including the Colorado Apartment Association and the powerful business group Colorado Concern, remain opposed. So do Republican legislators, who view the bill as an encroachment on property owners’ rights.

“If you’re thinking about investing $20 million into an affordable project in Colorado, then you’re still concerned about having this cloud on the title of what you develop, and (some may decide) to go elsewhere because of it,” said Drew Hamrick, the senior vice president of governmental affairs for the apartment association. “We still believe and worry about the stigmatizing effect it has on housing investment.”

Hamrick argued that the policy would depress prices on developments because would-be buyers wouldn’t invest as much time or money in researching and bidding on properties that may end up being owned by a local government anyway.

He said he supported another  piece of the bill that would give local governments a “right of first offer” on for-sale, market-rate properties. But he was flatly opposed to the rest.

Other groups and entities seeking changes to the bill have links to high-profile developers and property owners.

The path to governor’s desk

The bill now heads to the Senate, where the broader measure passed last year after delays and negotiations. If the new version passes, the bill will enact the first statewide right of first refusal of its kind in the country.

Some cities, counties and housing organizations have a version of the policy, and lawmakers in Maryland have advanced legislation that includes a right of first refusal for tenants to buy their residences.

Denver also has a similar policy that seeks to preserve subsidized housing properties. Renee Gallegos, the deputy director of housing opportunity for the city’s Department of Housing Stability, said it had been used twice in recent years, via a nonprofit partner, to buy properties and sell them as condos with affordability requirements.

Should HB-1175 clear the Senate, the final say would again rest with Polis.

In his veto letter last June, he said he didn’t support a right of first refusal “that adds costs and time to transactions.” Sponsors this year have worked to trim the timelines in the bill, expediting sales as well as local governments’ decisions on whether to exercise their right to step in.

In a statement to The Denver Post on Friday, Polis spokeswoman Shelby Wieman said the governor “appreciates the dialogue happening with sponsors and all stakeholders” and that Polis “will continue to monitor this bill as it moves through the legislative process.”

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DENVER, Colo. – Colorado is experiencing record seizures of fentanyl, according to the Drug Enforcement Administration, who attributed some of the rise to cartels spreading into new regions and distributing larger volumes of the drug.

DEA spokesman Dave Olesky, who is also the Acting Special Agent in Charge of the Rocky Mountain Field Division, said his investigators conduct drug busts across Utah, Wyoming and Montana and are reporting more signs of cartel activity.

Olesky explained that agents have noticed drugs typically associated with cartels in eastern Washington coming into the state of Montana.

“We have also seen local street gangs that might be more common in Detroit and the East Coast actually coming into the state of Montana to compete for that territory because the price per pill is so much higher up there,” Olesky added.

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The Rocky Mountain Field Division broke its fentanyl seizure record last year, confiscating more than 2.6 million pills in Colorado in 2023, and this year is already on track to surpass that number.

“Quantities of fentanyl that we are seeing now in the Denver area, they used to be, two years ago, typically what you might see in one of the distribution cities down in Phoenix, Los Angeles. But nowadays, those cities are seeing exponential increases in terms of the number of and quantities of fentanyl being seized,” Olesky said, adding that 100,000 quantity seizures are “sadly becoming the norm” in the Denver metro.

Drug overdose deaths have spiked from 8.2 per 100,000 people in the year 2000 to 32.6 per 100,000 in 2022, per the CDC. (Drug Enfrocement Administration)

Seven out of every 10 illicit pills now contain a deadly dose of fentanyl, the DEA reported, and because the synthetic pills are cheap to make and easy to become addicted to, there is no shortage of supply and demand.

Olesky said the people selling the pills don’t care if they are safe, only that they make money. He also said the DEA is investigating criminal organizations in China that play a role in the fentanyl crisis by helping cartels produce the drug for cheap.

“The Mexican drug trafficking organizations are able to produce this as simply as whether it’s a super lab or a garage in Mexico,” Olesky said.

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In fall 2023, only about half of illicit pills contained a deadly dose of fentanyl – now it’s nearly 70% of illicit pills, according to the DEA. (Drug Enforcement Administration)

Jason Mikesell, the sheriff in Teller County, Colorado, said he believes the migrant crisis at the southern border has contributed to the fentanyl surge in Colorado despite the Department of Homeland Security and Customs and Border Protection trying to stop the drug from entering the country.

“Why do we see such a huge rise in Colorado with fentanyl? We are 10 hours from El Paso. They are coming here as a place that’s supposedly going to house them,” Mikesell said.

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Olesky, on the other hand, believes multiple factors have led to the surge.

“Certainly there is a border piece to this, but then there’s also got to be the outreach piece, the education piece,” Olesky said.

Since the pills can be disguised well, sometimes even packaged in bright colors to attract children, Olesky said one of the best ways to prevent fentanyl poisoning is to talk about it and its dangers.

The DEA warned that cartels sell multicolored fentanyl pills, which can attract children. (Drug Enforcement Administration)

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Drug overdoses, largely driven by fentanyl, are the leading cause of death for adults ages 18 to 45, according to the CDC. 

From the year 2000 to 2022, the rate of drug overdose deaths nearly quadrupled from 8.2 per 100,000 people to 32.6 per 100,000, the agency reported.