City Council Adopts Program Requiring Landlords to Get Licensed: Many property owners leasing units will have to apply starting next year

Denver City Council President Stacie Gilmore frequently referenced a rental home in Green Valley Ranch that had multiple problems, such as mold and exposed wiring, which took seven months to fix.

This is an example, she said, of why the city needs to require landlords to apply for licenses, so Denver can take stock of its rental inventory and why inspections must be mandated.

On May 3, city council adopted plans to establish a program that would require landlords to obtain permits following an accredited inspection. Gilmore said the city’s bill is intended to take stock of all rentals in Denver and to ensure tenants are living under safe conditions.

“Today, we don’t know what we have and we don’t have a concise database, and knowing the housing stock is critical … due to the pandemic and rising property costs for folks renting,” Gilmore said.

The rental permits can be obtained starting Jan. 1, 2022, and by 2023 a license will be required for any person renting two or more units on a parcel. Single-unit landlords will have until 2024. Licenses will have to be renewed every four years, except for buildings that were constructed within the last four years, as Gilmore said they already go through rigorous inspections.

The licensing program does not apply to state or federally owned properties, such as low-income housing, and it does not apply to short-term renters who use companies like Airbnb, which are licensed through a separate process.

Tenants who wish to file a complaint with the city about the state of their rental units can do so now and have an inspector meet with the landlord, but Gilmore said this new program will make sure “property owners are showing and attesting that they meet the minimum housing standards.”

“This will allow us to improve outreach to both landlords and tenants, and this is a tool to keep people housed,” she said.  

Last year The Denver Department of Public Health and Environment received about 1,200 complaints for issues related to mold, heating, water, ventilation, and others, according to officials with Gilmore’s office.

As the average rent in Denver continues to climb—about $1,661 for a unit that is less than 850 square feet, according to the website RENTCafé—people could be inadvertently displaced while inspections take place and the units are brought up to code.

But Gilmore said it would be the responsibility of the landlord to maintain the units and that the city does not want to break anyone’s lease because of a failure to upkeep units.  

Additionally, Council member Kevin Flynn said he had concerns about what happens when older homes that were built out of contemporary compliance are cited for unsafe reasons. He said many of Denver’s older housing stock has been demolished because of those reasons.

“We’re going to try to mitigate that as much as possible and make sure we’re not making an unsafe living situation, and we want to be cognizant and make sure we’re mitigating any unintended consequences,” Gilmore said. “That is, at the end of the day, the guiding light of this entire policy, that we want to keep people housed but we want to make sure that they’re safe.”

A checklist for landlords to comply with will be developed this summer through a stakeholder process over the summer, Gilmore said.

“We really went into this process two years ago hyper-focused on how we could craft major renter protection policy and make sure that we were mitigating any concerns about involuntary or forced displacement of folks,” she said.

If a landlord decides not to get a rental license but continues to operate the units, Gilmore said the city is going to use software to identify properties that are being rented. The city could locate the property through tax records and the Department of Excise and Licenses would send them a letter saying the city suspects it is being used as a rental property.

The council president said she wants to educate people about the program before they enforce the new laws.

“We don’t have a requirement that the property owner find alternative housing for the tenant, but there’s definitely plenty of programs that we could connect the tenant with.”

“We purposely made single dwelling units the last phase, so we have essentially two and a half years to get the word out to those owners,” Gilmore said.

Landlords with one dwelling unit will have to pay $50 for the license, landlords with two to 10 units will have to pay $100, those with 11 to 50 units will have to pay $250, owners with 51 to 250 units will have to pay $350, and landlords with more than 250 units will have to pay $500.

Landlords will also be responsible for the cost of an initial inspection of 10% of their units, which cost about $150 or higher.

Although Council member Candi CdeBaca said she wanted to implement a method that would increase the costs of licenses to corporations with massive apartment buildings, the council voted in favor of the aforementioned method based on feedback from stakeholder meetings that took place in the two years leading up to the program’s adoption.

Drew Hamrick, general counsel and the senior vice president for government affairs for the Apartment Association of Metro Denver, said Colorado landlords are already required to obtain a real estate broker’s license to lease units. 

“What Denver’s (law) does is make them get a city license to do it,” Hamrick said. “On the one hand, it is a duplication of the state requirement and it lumps people in who never had to get a license, like the little landlord who may be renting one place in Washington Park. Even a small amount of regulation is a large amount.”

According to Gilmore’s office, about 37% of Denver’s housing stock is rented, or about 54,000 units, but that is only calculated by estimates and they noted the true number may be much higher.

The DDPHE director may fine landlords up to $1,000 per violation if they continue to rent out of compliance, according to the bill.

The city’s rulemaking process to fill in the details of the rental license program requirements will begin sometime this summer.

The city council is also considering a bill that would give low- to moderate-income tenants access to free legal counsel if they are facing evictions. That bill is currently being discussed in council committee.

Eric Heinz is a freelance journalist based in Denver who most recently covered Los Angeles City Hall for City News Service. 


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