DENVER – The Denver City Council unanimously passed a law that will require landlords in the city to obtain licenses for their long-term rental properties over the next couple of years.
The sponsors of the measure say the license requirement and other facets will help to hold landlords to a higher standard and give renters more protections, though there has been outcry from both groups about inspection and licensing fees, which some renters fear could get passed on to them through rent increases.
Under the new law, property owners renting out buildings with two or more units will have to be licensed starting Jan. 1, 2023; and owners of single-family units such as houses who rent them out will have to be licensed by Jan. 1, 2024. There will also be an opt-in for early licensing starting on Jan. 1, 2022.
The new law also requires landlords to provide copies of written leases for new tenants within 70 days for any lease longer than 30 days, and to provide tenants with their rights and resources – all starting on Jan. 1 of next year.
City Council President Stacie Gilmore said there are about 54,000 rental properties in the city whose owners could require a license under the new law.
“Denver has been in a housing crisis for decades and the pandemic has put even more uncertainties on our residents,” Gilmore said in a statement. “This policy will help stabilize housing and neighborhoods by gathering basic property owner information as well as important rental data, enabling us to broadly share resources with tenants, and strengthen landlord-tenant education and outreach.”
Landlords will have to first have their property inspected by a certified home inspector, which the city says averages about $150 for a single home but which the American Society of Home Inspectors says can cost $300-$1,000.
Rentals with two or more units must have 10% of the units inspected at random, and single-unit rentals will require inspection.
Once the inspection is complete, the landlord would be able to apply for the license. Application fees would be $25 between Jan. 1, 2022 and Jan. 1, 2023. Landlords renting out two or more units would pay a $50 application fee after Jan. 1, 2023. And landlords renting out single-unit homes would be able to pay $25 for an application until 2024, when the fee would increase to $50.
Licensing fees will be as follows: $50 for one unit; $100 for buildings with 2-10 units; $250 for buildings with 11-50 units; $350 for buildings with 51-250 units; and $500 for buildings with more than 250 units. The licenses will have to be renewed every four years and require another inspection before renewal.
Gilmore said the new law will help the city gather information and data on property owners, rental properties and how many renters there are in the city and help hold landlords accountable if they are not meeting city requirements.
Licenses can be suspended, revoked or sanctioned if landlords do not meet the requirements under the law and could be fined up to $1,000 for each violation.
Eric Escudero, a spokesperson for the Denver Department of Excise and Licenses, said the department was reviewing the measure and "eager to identify ways in which we can inform Denverites what the licensing requirements are so we can have a high level of compliance and achieve the policy goals of this City Council passed legislation."
“We are one of several agencies that will have a role in successfully implementing this legislation and are grateful we have time to educate the public and make the necessary adjustments to our agency that are still to be determined,” Escudero said in an email.
Drew Hamrick, the general counsel and senior vice president of government affairs for the Colorado Apartment Association, said in a statement that the extra requirements "will increase the cost of rental housing" — a hint at a pass-through. Hamrock said the measure, along with others that were not specified, "will lead to more expensive rental housing in years to come."
“It’s important that the rental housing industry work in tandem with our city councilmembers and legislators to implement more attainable solutions to affordable housing in Colorado,” Hamrick said in a statement. “We need more rental housing units, not greater regulation of the ones we have. We will continue to propose solutions and find ways to support rental housing providers and residents in Denver.”