It’s viewed as the “third rail” in affordable housing — the one path lawmakers have feared to tread.

Not this year.

A bill expected to be introduced this week takes a new approach to the challenges surrounding condominium construction, and its sponsors hope to avoid the battles between homebuilders and trial lawyers that have perennially erupted for years.

Trial lawyers have often argued that if companies just built better condos in the first place, there wouldn’t be so much litigation.

The bill that will be introduced today focuses on building affordable condos right the first time, according to sponsors.

Notably, its list of 23 co-sponsors includes progressive and moderate Democrats, as well as Republicans of all stripes. The sponsors are Reps. Shannon Bird, D-Westminster and Andrew Boesenecker, D-Fort Collins. In the Senate, Senate President James Coleman, D-Denver, and Sen. Dylan Roberts, D-Frisco, are sponsoring the legislation. 

Gov. Jared Polis is also believed to be on board based on his comments during his January State of the State address, which was the first time the governor really delved into the condo issue in his annual speech before the legislature. At a roundtable with business leaders hosted by the Colorado Business Roundtable, Polis said he wants to “reform the construction defects” law “so that condos can be built.”

“(They’re) great starter homes,” he said, noting they help owners build equity toward a single-family home later.  

“Condo construction has crawled, slowed to a near halt in our state,” he said.   

The proposal requires a third-party, independent inspector to make periodic checks during the construction process. The builder is tasked with responding to what the inspector identifies as a problem and with fixing it. That, backers said, elevates the standards to a higher level of quality and imposes a higher burden of proof of quality.

“There are already really good best practices out there, but they were scattershot and adopted by good builders and insurers,” Bird told Colorado Politics.

If the state were to make those best practices standards, that would be an opportunity for a solution, said Bird, who has participated in about 80 meetings on the subject since last May.

The follow-up on the inspections is a warranty guaranteeing the quality of the workmanship, the HVAC systems, and structural work.

“You stand behind your work,” Bird explained.

She said builders who follow those best practices would get the benefit from the doubt in court because they’ve tried to do better work and stand behind it.

One significant issue in the cost of affordable condos is litigation insurance, which nowadays can add $30,000 to $40,000 to the cost of an individual unit. Years of litigation over defective condos have driven up the cost to the point that the affordable condo market no longer exists in Colorado.

Bird said the insurers believe the bill provides a more robust process for fixing things before a claim is filed. That could reduce the frequency and magnitude of claims. However, insurers aren’t willing yet to look at the cost of that insurance.

“We need a better system. It can’t be where we’re just throwing up homes without regard to quality,” Bird said.

“If we really want laws that are meaningful,” then the laws, she said, should be good policies to encourage better construction of homes in the first place.

Bird said the homebuilders and trial lawyers are still working through the differences, but she’s hopeful.

“They understand we are coming in good faith to meet everybody where we can,” she said.

At the end of the day, “I do think it’s probably going to be impossible to make everybody happy, but if everybody is just a little bit uncomfortable with the bill, then maybe that means we finally found the right solution,” she added.

Bird has another goal —  to address the lack of affordable housing for purchase, especially for first-time buyers.

The state’s response to the affordable housing crisis in the past few years has leaned heavily toward the rental market and improving tenant rights.

She said that rental solutions leave Coloradans forever at the mercy of a landlord.

“And it’s no way to build wealth. It’s no way to build financial security,” she said. 

Bird said the emphasis on rentals has been inadequate, calling it a band-aid approach to the lack of affordable housing in the state. With the emphasis so heavily weighted toward rental apartments, she said it wears on communities that want more homeownership opportunities. And as the problem remains unsolved, the drumbeat for home ownership has grown louder.

“Our only answer cannot be to further buttress the safety net. A safety net is important, but there’s only so much taxpayer-subsidized housing that we can afford to create,” Bird said.

The state needs to move away from growing the investment via a band-aid, Bird said.

She’s talked to young professionals in her district who make good money, but they’re frustrated because homeownership is impossible, she said. 

When those young professionals go elsewhere, there is a brain drain, she said.

“(There are people) who want to work hard and be committed to our communities, but they can’t afford a place to live. People want their kids to be able to grow up here and to stay in our community, and we’re not a place where that’s happening anymore,” Bird said.

The path forward, both for workers and business, she said, is a stable place to live and put down roots, and that won’t happen unless the legislature takes advantage of this unmined opportunity — the construction of middle-market condos.

It’s Bird’s second major attempt at tackling the condo issue.

In the 2024 session, she sponsored a bill on “construction defects” backed by homebuilders. It competed against a measure from trial lawyers. Both measures died in the 2024 session’s waning days.

The 2001 Construction Defect Action Reform Act had set up a process for homeowners to sue builders when they find defects, which can range from serious issues, such as cracks in the foundation or HVAC problems, to smaller problems, such as defective cabinetry and leaks.

A report last September from the free-market think tank Common Sense Institute said that “insurance costs for condominiums surged to 5.5% of a project’s hard costs, more than 233% higher than multifamily rental home projects, which had insurance costs as low as 1.1% to 1.65% of project hard costs.” Insurance costs are tied to lawsuits over construction defects, supporters of changing the law have argued. 

This year, the homebuilders and trial lawyers are also not on board, but lawmakers have grown weary of the fights and the lack of progress.

House Minority Leader Rose Pugliese, R-Colorado Springs, who is among the co-sponsors, told Colorado Politics lawmakers want a solution, and the governor has come around, too.

“There is a desire by lawmakers on both sides of the aisle to address this issue because it’s the No. 1 issue affecting affordable and attainable housing” in Colorado. “It’s time we find a solution. It won’t be perfect, but it moves us down the path to resolution.”