Saturday, April 20, 2024

This Colorado Bill Attacking Property Rights Is Insane

A new bill has been proposed in Colorado that would attack the property rights of those who want to sell multifamily properties. HB 1190 was introduced by state Sen. Faith Winter and state Reps. Andrew Boesenecker and Emily Sirota, all Democrats. The bill would require owners of multifamily properties to give a right of first refusal to their local government before selling to a private entity.

The purpose of the legislation is to enable local governments to purchase properties in order to create more “affordable” housing. Basically, it will enable the government to displace private landlords, if they so choose.

From Liberty Nation:

The proposed bill defines a “qualifying property” as a “multifamily residential or mixed-use property consisting of five or more units in urban counties and three or more units in rural or rural resort counties.”

The law would require property owners to inform their local government if they are taking action to list the property for sale or entering into an agreement to sell their real estate. After receiving notice of intent, the city or county has 14 business days to exercise its right of first refusal and another 60 business days to make an offer and must agree to close on the purchase within 120 days.

If the city government indicates that it wishes to make an offer, “the residential seller shall not proceed with the sale of the qualifying property to any other party and the local government shall have a right to make an offer that is economically substantially identical to an acceptable offer on the qualifying property,” according to the proposed legislation.

But what if the seller does not find the government’s offer acceptable? In this case, this individual would be required to “provided a written explanation of the rejection as shall invite the local government to make a subsequent offer by identifying the terms and conditions that must be included in the subsequent offer for the residential seller to potentially accept the subsequently made offer by the local government.”

The legislation would also forbid property owners from negotiating with private buyers while negotiations are ongoing with the government. Finally, the legislation would forbid property owners from accepting offers from private buyers that are beyond what the government could “reasonably” pay.

Basically, the owners of certain multifamily properties would lose their property rights. The right to own property is meaningless if the owner of that property cannot dispose of that property as they see fit. The government should not compel private property owners to sell to the city.

This would also discourage the construction of new multifamily housing. If there is an artificially limited ability to cash out on their investment, there would be no incentive to build the housing. The people who would suffer in this instance are the poor and middle class, who would be most impacted by a more restricted housing supply.

Assaulting private property rights is not the solution to the affordable housing crisis many parts of the country are facing. Instead, we need to be encouraging property owners to build more housing.