Second Regular Session Sixty-ninth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 14-1093.01 Duane Gall x4335 SENATE BILL 14-219 SENATE SPONSORSHIP Ulibarri, HOUSE SPONSORSHIP Ferrandino, Senate Committees House Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning the collection of data on the shortage of owner-occupied affordable housing in Colorado. Bill Summary (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://www.leg.state.co.us/billsummaries.) The bill makes a legislative declaration regarding the shortage of new owner-occupied affordable housing in Colorado. The bill requires the division of housing in the department of local affairs, in consultation with other governmental and private-sector entities, to study and assemble data on the effects of certain factors on new owner-occupied affordable housing in Colorado. The bill requires the division to report to the general assembly on or before March 15, 2015. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add 24-32-705.5 as follows: 24-32-705.5. Owner-occupied affordable housing study - legislative declaration - report - repeal. (1) The general assembly finds, determines, and declares that: (a) The state of Colorado is currently experiencing a lack of construction of owner-occupied affordable housing in many areas of the state; (b) There is insufficient data available to understand the causes of this trend and the resulting pressure on the availability of owner-occupied affordable housing in the state in general; and (c) Therefore, the general assembly desires that the division of housing study the factors underlying this trend and present data on this issue to the general assembly so the general assembly can understand what is causing the lack of availability of owner-occupied affordable housing in Colorado as well as the lack of construction of this type of housing in the state. (2) The division shall study this issue in consultation with other governmental agencies and private-sector entities as the division deems appropriate, and shall give particular attention to the need for housing for which the monthly cost for principal, interest, taxes, and insurance (PITI) does not exceed thirty percent of the area median income per month. (3) The division's study must include: (a) A review of current market trends in the construction of owner-occupied affordable housing including: (I) A review of the market for new and resale owner-occupied affordable housing; (II) A review of the market for rental affordable housing; and (III) The manner in which these markets impact the construction of new owner-occupied affordable housing in comparison to the construction of rental affordable housing in Colorado; (b) A review of changes in demographics and behaviors of consumers of affordable housing and rental affordable housing; (c) A review of the availability of financing for purchasers of owner-occupied affordable housing and for builders of affordable housing, both owner-occupied and rental; (d) The comparison of Colorado with other states and areas of the country with respect to affordable housing trends; (e) The review of federal and state laws that may impact the construction of new owner-occupied affordable housing; (f) The analysis of the availability and affordability of insurance products for the construction of new owner-occupied affordable housing and rental affordable housing, including: (I) General construction liability coverage for construction of affordable housing, including premiums, and claims, settlements, and payouts for construction defect claims made on affordable housing units; (II) The number of affordable housing multi-family units, both rental and owned, that have been subject to claims since January 2013; (III) Insurance rates and increases from 2007 through 2014 for builders of affordable housing units on the following types of insurance: (A) Combined commercial multiple peril; (B) Other liability; (C) Construction surety bonds; and (D) Surplus lines coverage for affordable multi-family housing; (IV) Which insurance carriers serving multi-family affordable housing projects left the state after the enactment of House Bill 10-1394; and (V) Whether it is common in other states for contractor liability coverage, as opposed to architect-engineer professional liability coverage, to exclude coverage for construction defect claims, necessitating that coverage for construction defect claims be purchased separately as a rider or through other coverage; and (g) A comparison of Colorado consumer protection laws applicable to affordable housing with other states' consumer protection laws for affordable housing. (4) The division shall report to the general assembly on the data assembled under this section on or before March 15, 2015. (5) This section is repealed, effective July 1, 2015. SECTION 2. Safety clause. The general assembly hereby finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, and safety.