Gov. Jared Polis vetoed a bill Tuesday that would’ve given local governments first crack at buying for-sale apartment buildings, the latest setback for frustrated housing advocates who questioned how the governor planned to address the affordability crisis in Colorado.

The sponsors of HB23-1190 were told in a Tuesday afternoon meeting with Polis that he intended to veto the bill, which, supporters say, would’ve helped Colorado rebuild public housing within the existing real estate market. The bill was among the most progressive housing proposals to pass the legislature this year, after several others were watered down or killed outright.

In a letter explaining his decision, Polis said he was concerned about title insurance and what he described as ambiguous language in the bill.

“I support local governments’ ability to buy these properties on the open market and preserve low-cost housing opportunities,” he wrote, “but am not supportive of a required right of refusal that adds costs and time to transactions.”

The rejection was the result of a weeks-long pressure campaign by various business groups to kill the bill, who argued the bill would hurt housing availability and infringe on property rights. The veto left supporters, like the bill’s co-sponsor Rep. Andy Boesenecker, feeling burned: Staff from Polis’ office, Boesenecker and others said, had expressed no concerns about the bill before it passed, had received requested amendments and had even helped ensure it had sufficient support in the final days of the session.

In a joint statement early Tuesday evening, Boesenecker and the bill’s other sponsors — Democrats Rep. Emily Sirota and Sens. Faith Winter and Sonya Jaquez Lewis — accused Polis of siding “with the interests of private equity, hedge funds, and their powerful corporate lobbyists” over the affordability needs of Coloradans, and in spite of Polis’ own “rhetorical commitment” to address those needs.

In a separate interview, Boesenecker, a Fort Collins Democrat, also accused some industry groups, like the Land Title Association of Colorado, of pressuring the governor to veto it after legislators amended the bill to account for their concerns. (The title association’s executive director declined to comment Tuesday.) Though there was sustained opposition from several industry groups throughout the session, Boesenecker said others were quiet or neutral, only to ask Polis to reject the bill after it passed.

“My biggest concern is you now have a private process — private conversations, veto letters — that we have not seen, that the public has not seen, overriding our very public and lengthy legislative process,” Boesenecker said.

In his letter, Polis said he was “deeply disappointed” that certain, unnamed stakeholders “chose not to engage” with legislators and instead raised issues with him after the bill had passed. Still, he said, he had a duty to listen to those concerns.

“It feels like bad faith negotiations,” said Jack Regenbogen, the deputy executive director of the Colorado Poverty Law Project, which supported the bill. “And then for the governor’s office to then do a complete turnabout from everything they’ve (said), it really erodes trust between housing advocates, the legislature and the executive branch. It’s one of the most disappointing moments in my entire career.”

The bill was among the more quietly contentious measures of the session, garnering less public attention than policies around rent control or evictions but still prompting firm opposition from the likes of the Colorado Apartment Association. Its survival remained in limbo until it passed on the penultimate day of the session on May 7, and it was so heavily amended that some housing advocates wondered if it would still be useable.

The bill would’ve made Colorado the first state in the country to give local governments a right of first refusal on certain housing units. Under the measure, a city could agree to match the purchase price negotiated between two private buyers and snap up the property first.

There were limits: It only applied to urban buildings with at least 15 units (or five in rural areas) and those constructed at least 30 years ago. The program would’ve expired in five years, and governments wouldn’t have been given first crack if a building was transferred to a family member, a trust or a nonprofit, among other exemptions.

Still, real estate and business groups like the Colorado Apartment Association and Colorado Concern opposed it. They argued that it interfered with the private market and property rights, and that it would fatally slow down real estate transactions. The Denver Metro Chamber of Commerce publicly called on Polis to veto the bill Tuesday, arguing it “adds unnecessary complications to real estate transactions.”

Mike Kopp, the president and CEO of Colorado Concern, said Tuesday that the bill “took a very long step in exactly the wrong direction.”

He said that real estate investors wouldn’t want to buy in Colorado under the policy because, he argued, it would hamper returns and the ability to sell the property later on.

“This would become a major point of consideration for (real estate investors) in any future downstream consideration,” Kopp said. “They’re going to protect their investment. This is what they do and they look at it and they say it’s too fraught with risk.”

Supporters argued that those predictions are misguided and haven’t played out in the Maryland county that has a right-of-first-refusal program. Regenbogen and Boesenecker both noted that local governments could only step in if a deal had already been reached between a seller and buyer and that the sale price would’ve been already set by the private market.

The veto comes amid broader frustration by progressive lawmakers and housing advocates over what the legislature did — and didn’t — accomplish on housing this session. While several bills to help tenants passed and have been signed by Polis, many of the most sweeping proposals failed: A bill to allow local governments to enact rent control passed the House and died in a Senate committee. Polis’ land-use reform effort flatlined on the legislature’s last day. A day before that, a progressive bill to limit housing displacement died on the calendar.

Boesenecker said he was concerned about Polis’ opposition to various housing strategies and questioned the path forward. In their letter, he and the other bill sponsors said Coloradans should be concerned about Polis’ failure “to usher these proven affordability strategies across the finish line.”

“I think we did our job in the House,” he said. “I don’t think it was a failure of the legislature. The governor doesn’t seem to have a cohesive plan to address affordable housing and is very susceptible … (to concerns) that are not proven in pattern or practice elsewhere.”

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