During a Special Legislative Session convened by Governor Polis, Colorado Legislators approved Senate Bill 20B-002. The bill signed by the Governor on December 07, transfers $54 million to the Housing Development Grant Fund to provide rental assistance and residential mortgage assistance to those that have experienced financial need due to the COVID-19 pandemic or second-order effects of the COVID-19 Pandemic. The Bill includes the creation of the Emergency Direct Assistance Grant Fund that provides grants through nonprofit organizations for individuals that may not be eligible for certain other types of assistance as well as allocated one million dollars for the eviction legal defense fund.
Members of the Colorado Landlord Legislative Coalition (CLLC) applaud legislators for focusing on rental assistance and hope that the rental assistance will take the place of the current eviction moratorium that is set to expire at the end of the year. Rental Assistance is a better solution for Landlords because it allows tenants to continue to pay the rent which in turn provides Landlords with the income needed to pay expenses such as a mortgage, insurance, utilities, maintenance, and general upkeep of the rental properties. Providing rental assistance also prevents Tenants from getting overwhelmed by accumulating unpaid rent and other debts that can be impossible to catch up on as the debts increase over time.
Most Colorado Landlords are not reporting significant numbers of non-paying tenants but have expressed that the approximate 2% of tenants that have been taking advantage of the eviction moratorium are leaving their rental properties with more damage than just unpaid rent.
One Colorado Springs Landlord reports that one tenant went from April through October without paying rent. The tenant did finally agree to move out of the property but left not only owing thousands in rent but also another $3000 worth of damages to the home. Like many other single-family and small multi-family housing providers, this Landlord relied on the rent payments for household income. After seven months with no income, the Landlord’s savings were considerably depleted. When the home was finally returned to the Landlord, he then had to come out of pocket for the costs to perform all necessary repairs to make the property livable again. This has been a common story among Colorado landlords and property managers throughout the pandemic and there are limited resources available to Landlords in this type of situation. Most single-family housing providers own between 1 and 3 rental properties and are typically retirees, deployed military members, or individuals that had to leave the area and hope to return to their homes in the future. These are not the kind of Landlords that can afford to take losses in the thousands while also experiencing unemployment and medical expenses related to the COVID-19 Pandemic in their personal lives.
The Colorado Landlord Legislative Coalition represents these independent property owners and property managers. CLLC members are reporting a significant uptick in housing providers looking to sell their investment properties. The market for home sales in Colorado is still very strong and many Landlords are looking to get out of the volatile rental market. The eviction moratorium removes a safety net for Landlords and for many it is no longer worth the risk to provide housing to others under these conditions. Colorado has been struggling with affordable housing issues for the last several years. Continued eviction moratoriums will certainly lead to a decrease in available housing. The shortage in supply will drive the rental rates up and will set Colorado back years on any previous advancements to improve the affordable housing crisis. Colorado Legislators need to support Landlords and provide incentives to encourage individuals to continue or begin providing housing to others. These efforts will help both Landlords and Tenants alike. Senate Bill 20B-002 is a step in the right direction and the Colorado Landlord Legislative Coalition stands behind Legislators and their recent efforts to provide rental assistance as it will help both Tenants and Landlords to better manage the Pandemic and ultimately will have a more positive long-term effect on affordable housing in Colorado.