Philosopher John Locke, whose ideas were central to the foundation of the United States, argued that individuals have a natural right to own property. His position on the sanctity of property rights informed those who drafted the US Constitution, and it remains a foundational principle to the pursuit of liberty. Colorado state lawmakers, however, have introduced a bill that could violate this most cherished of American principles.
Colorado Legislators vs. Landlords
HB 1190 was recently introduced by state Sen. Faith Winter and state Reps. Andrew Boesenecker and Emily Sirota, all Democrats, of course. If passed, the measure would require owners of “qualifying” residential or mixed-use multifamily property to give the right of first refusal to their local government before selling to a private entity. The purpose of this measure is ostensibly to make it easier for the government to create more long-term affordable housing units for the less fortunate. The proposed bill defines a “qualifying property” as a “multifamily residential or mixed-use property consisting of five or more units in urban counties and three or more units in rural or rural resort counties.”
The law would require property owners to inform their local government if they are taking action to list the property for sale or entering into an agreement to sell their real estate. After receiving notice of intent, the city or county has 14 business days to exercise its right of first refusal and another 60 business days to make an offer and must agree to close on the purchase within 120 days.
If the city government indicates that it wishes to make an offer, “the residential seller shall not proceed with the sale of the qualifying property to any other party and the local government shall have a right to make an offer that is economically substantially identical to an acceptable offer on the qualifying property,” according to the proposed legislation.
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But what if the seller does not find the government’s offer acceptable? In this case, this individual would be required to “provided a written explanation of the rejection as shall invite the local government to make a subsequent offer by identifying the terms and conditions that must be included in the subsequent offer for the residential seller to potentially accept the subsequently made offer by the local government.”
The text of the bill does not indicate what will happen if the property owner does not find subsequent offers from the government acceptable, so it is unclear if the individual would be forced to sell it at the city’s price or be allowed to deal with a private entity.
To further protect the government’s pocketbook, the proposal would also prohibit the property owner from “engaging in negotiations with third-party potential buyers that have the primary effect of the third party making an offer to the residential seller to purchase the qualifying property that is unreasonably cost prohibitive or legally impossible for the local government to match with an economically substantially identical offer.”
Since the seller is compelled to give the government a chance to match prices, the law would stop property owners from accepting offers from private entities that are beyond what the city can “reasonably” pay.
There are exemptions to this measure. The bill says that these rules do not apply if the owner wishes to transfer the property to “a spouse, a partner in a civil union, or a parent, sibling, aunt, uncle, first cousin, or legally recognized child of the residential seller.”
What About Property Rights?
Author Buz Koelbel, in an op-ed for Colorado Politics, argued that the bill would “be one of the most egregious government intrusions in our history” and that it “would destroy one of the most important foundational rights in our country: property rights.”
Later in the article, he writes:
“During the last four-and-a-half decades, I have seen many affordable housing solutions burden the very people who are in the business of providing places for people to live, work, shop and play. HB23-1190 is the worst of these failed policies. Affordable housing is a societal problem and must be solved in a broader manner than this bill presents.”
Many Americans, regardless of political affiliation, are loath to accept that the state can dictate to people what they can and cannot do with their belongings. If this bill were to pass, it would almost certainly face near immediate challenges in court. In the end, it is worth noting that the role of government is to protect our natural rights, not use the rule of law to violate them.
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