Apparently, the only way to make Colorado’s housing market more affordable is to make it more expensive — or so some policy makers seem to believe.
How else to explain assorted proposals, pending at the State Capitol, Denver City Hall and elsewhere, that heap one costly burden after another upon those who provide the state’s housing? Inevitably, they will have to pass those costs on to the rest of us if they want to stay in business.
But let’s not be naive. The politicians peddling these proposals must know better. They understand what they are promoting won’t work. But they also understand that the public looks to them to “do something” even if the “something” turns out to be little more than pandering.
Those politicians are acutely aware of the kind of polling results reported this week by our news affiliate Colorado Politics, showing public concern is at an all-time high over the spiraling cost of renting or buying a place to live. As the survey findings remind us, a lot of Coloradans are so desperate they even are willing to accept radical intervention by government, using long-discredited policies that in fact would make a bad situation worse.
Instead of showing the kind of leadership that can sift out bad ideas that have a superficial appeal, they champion them in hopes of ingratiating themselves with a hard-pressed public. And it doesn’t seem to matter how much collateral damage those reckless policies cause.
Consider a measure in the legislature that would shoot holes in the state’s long-standing — and necessary — prohibition on rent control. House Bill 1117 allows local governments to enact rent control in the form of affordable-housing mandates on home builders, i.e., forcing builders to sell or rent a portion of their developments at cut-rate prices.
The prices permitted for the homes, condos or apartments that are reserved for “affordable” housing could be below even the cost of building them. Who picks up their tab? Not the builder — but all the other homebuyers in the development. And if they, too, are of modest means but scraped together enough for a down payment and a conventional mortgage, they get saddled with a burden that is beyond their own means. It’s all unfair but inevitable because builders must recover the cost of construction or they can’t afford to build in the first place.
Meanwhile, another proposal would make all landlords in the City and County of Denver get a license to continue renting their property. It applies to the full range of “landlords,” from investor-owned mega-plexes, to an elderly pensioner who rents out a converted apartment in the basement. The proposal comes up for vote before the Denver City Council Monday.
What’s the point — besides saddling providers of rental housing with more paperwork and, of course, another fee? As quoted in Colorado Politics, proposal sponsor and Council President Stacie Gilmore said, “This is something my office and I have been working on … to address tenants' rights and protections.” Gilmore called it, “a tool to keep folks housed in our city.”
How will it “keep folks housed”? Levying what is essentially another tax on the one third to one half of the city’s housing stock that is presumed to be rental property, with fees ranging from $50 to $500 per property, sounds like little more than another revenue raiser. Perhaps, to be spent on expanding the bureaucracy needed to assess the fee.
Alongside that is another proposal on the Denver council’s agenda since last month, funding lawyers for anyone facing eviction in the city.
Co-sponsoring the proposal is council member Candi CdeBaca, the bomb-throwing political limelighter behind last year’s attempt to replace Denver’s police force with a “peace force.”
CdeBaca told a video press conference as she unveiled the idea, “An eviction makes it exponentially harder for someone to ever climb out of the hole of homelessness.”
CdeBaca neglected to mention that it makes it exponentially harder for landlords to offer affordable rent if they face a costly court battle anytime they have to oust a tenant who is months behind on rent.
When demand surges as it has amid the Front Range’s seemingly nonstop boom, the price of supply rises. That’s a law of economics. It’s also an opportunity for local and state governments to show real leadership and resist the temptation to demagogue.
Instead of flogging the ones who build and offer the rest of us housing, government should tweak taxes, fees and regulation to encourage them to build and offer even more. Increasing supply is the one surefire way to slow the cost spiral. That’s another law of economics.
It doesn’t make politicians look like avenging superheroes, but it actually works.