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February 21, 2023 HB 23-1190
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
Fiscal Note
Drafting Number:
Prime Sponsors:
LLS 23-0020
Rep. Boesenecker; Sirota
Sen. Winter F.
Date:
Bill Status:
Fiscal Analyst:
February 21, 2023
House Trans.& Local Govt.
Josh Abram | 303-866-3561
josh.abram@coleg.gov
Bill Topic: AFFORDABLE HOUSING RIGHT OF FIRST REFUSAL
Summary of
Fiscal Impact:
☐ State Revenue
☒ State Expenditure
☐ State Transfer
☐ TABOR Refund
☒ Local Government
☐ Statutory Public Entity
The bill creates the right of first refusal for local governments to purchase multi-unit
residential properties for long-term affordable housing. The bill increases state and
local expenditures beginning FY 2023-24.
Appropriation
Summary:
No appropriation is required.
Fiscal Note
Status:
The fiscal note reflects the introduced bill.
Summary of Legislation
The bill creates the right of first refusal, with certain exemptions, for local governments to purchase
multi-unit residential properties for long-term affordable housing. Long-term affordable housing
means that the annual rent for any unit will not exceed the rent for households of a given size at the
applicable area median income for a minimum of 100 years, and the local government agrees not to
raise rent for any unit by more than the bill’s specified rent increase cap.
Local governments are given the right to purchase a qualifying property for an economically
substantially identical offer to another offer that a residential seller receives. Any purchase or sale
agreement for the conveyance of a qualifying property by a residential seller 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 five or more
residential units in urban counties, and three or more residential units in rural or rural resort counties,
as those classifications are determined by the Division of Housing in the Department of Local Affairs.
The right also applies to any property supported with state or federal funds, such as certain tax credits,
government loans or grants, or federal support programs for individuals through the US Department
of Housing and Urban Development (HUD).
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February 21, 2023 HB 23-1190
A local government may partner with a nonprofit entity to co-finance, lease or manage the property
as long-term affordable housing. At any time, the local government may assign its rights to the state,
another political subdivision, or a housing authority so long as the property is used to preserve or be
converted for long-term affordable housing.
The bill details the obligations of residential sellers of qualifying properties to provide notice to local
governments when a seller demonstrates his or her intent to sell the property. 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. Local governments must provide notifications to residential sellers of any intent
to exercise the right of first refusal, notify any tenants in qualifying properties, and hold a public
meeting for residents to obtain information regarding a potential purchase by the local government.
The Department of Law must enforce the provisions of the bill, and the department may intervene in
any action brought pursuant to disputes of the local government’s right of first refusal. Courts may
grant injunctive relief for violations, as well as award damages, attorney fees, and costs to a prevailing
party.
State Expenditures
The bill may increase workload for the Department of Law to enforce the provisions of the bill and
intervene in actions brought when disputes are raised against a local government’s right of first
refusal. The department will have discretion to bring civil actions to enforce the law, or intervene in
other disputes. The department may also have increased workload to provide legal services if any
local government partners with the state to take possession of long-term affordable housing
properties. If there are additional funding requirements for these efforts, the department will seek
resources during the annual budget process.
Local Government
Local governments that exercise the right of first refusal will have increased expenditures for property
purchase and management, and for costs associated with required notifications and public meetings.
These costs are not estimated and will depend on future local decisions and actions.
Effective Date
The bill takes effect upon signature of the Governor, or upon becoming law without his signature, and
applies to all qualifying properties which are listed for sale but are not under contract on or after that
date.
State and Local Government Contacts
Counties Judicial Law
Local Affairs Secretary of State
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit: leg.colorado.gov/fiscalnotes.