Missing the Mark?

The regular session of the seventieth General Assembly of Colorado is scheduled to close on May 6, 2015.

AIA Colorado supported House Bill 1197 – Concerning Limitations on Indemnity Obligations in Public Construction Contracts, which I am pleased to report was sent to the Governor.  The bill aligns municipal contracts with the private sector on issues of defense, indemnification, and liability.

AIA Colorado has also supported Senate Bill 177 – Construction Defects reform. As a lawyer who frequently represents design professionals (and an active member of the Colorado Defense Lawyer’s Association’s Legislative Committee) I have been watching the bill move through the General Assembly with intense interest.  SB 177 passed its first test in the Colorado General Assembly and is slated for its second reading today, April 10.

I am a legal wonk, a research nerd.  I get caught up in the history, the legalese, grammar, canons of construction, and procedural ramifications.  Then, last night, at a networking event I was asked the questions that really matters:  If the bill passes, will it really make a difference in the number of residential construction projects – especially affordable housing- in the Denver Metro area?

As a strong supporter of SB 177, I had to take a step back and examine the bill.

The bill was touted as a necessary remedy to encourage desperately needed affordable residential housing.  The rational being that it was too easy for an zealous minority of owners within an association to hijack the litigation process and drag all units within the condominium association into expensive, protracted litigation.

While I am a supporter of SB 177, and I think changes to the current statutory scheme are overdue, I am not sure SB 177 will be a panacea.

SB 177 would do little to encourage the construction of affordable housing.  In my experience, owners of affordable housing were not the parties hiring counsel to file multi-million dollar construction defect claims.  SB 177 would ensure that a majority of owners within an association are informed and consent to initiating a lawsuit against the developer, designers, or other construction professionals.  If passed, it surely would curb frivolous lawsuits.  However, I doubt developers and contractors will exhale in a collective sigh of relief and rush to initiate affordable housing projects.  (Nor do I think the passage would protect “laggards [who build defective homes]” as Denver and Boulder Democrats warn).  Cynical as though it may sound, they money just is not there.  Why build affordable housing when you could build a multi-family development that would sell at the market rate? (In Denver, the average housing price is $317,000.00 according to the Denver Business Journal).

I still support SB 177; but not because I believe it encourage wary developers to construct affordable housing.

Our conversation left me wondering: What would it take to promote construction of affordable housing in the Denver Metro area?

One thought on “Missing the Mark?

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