CREJ

Page 30 — Multifamily Properties Quarterly — August 2019 www.crej.com Law TIMNATH HARMONY ROAD HORSETOOTH ROAD DRAKE ROAD FORT COLLINS LOVELAND WINDSOR COUNTY ROAD 5 TIMBERLINE ROAD W 57TH STREET 8 Complete 310 ± units Complete 110 ± units 7 Investment Sale 220 ± units 6 Complete 314 ± units 5 Signed LOI Complete 224 ± units Complete 254 ± units 12 Under Const. 236 ± units Complete 212 ± units 3 Planned 180 ± units 9 13 14 JOHNSTOWN 10 Planned 192± units 4 11 Northern Colorado’s Premier Real Estate Services Group Contact: Jake Hallauer, CCIM | Ryan Schaefer | Andy Smith | Mark Bishop | Joe Palieri II, CCIM | Brian Weaver 970 663 3150 NORTHERN COLORADO MULTI-FAMILY EXPERTS naiaffinity.com BROKERED TRANSACTIONS FOR OVER 2,252 UNITS IN THIS MARKET CYCLE CURRENT LISTINGS 1) 19.34 ± ac. south of Harmony Road just west of Timberline Road, Fort Collins 2) 10.0± ac. site near the SWC of College Avenue & Trilby Road, Fort Collins. 3) 52.65± ac. site near the SEC of College Avenue & Trilby Road, Fort Collins. 4) 11.80± ac. site SE of I-25 & US 34, within the 2534 mixed-use, master planned, community in Johnstown. SITES & INVESTMENTS BROKERED IN THIS MARKET CYCLE 5) 16.1± ac. site at the NWC of Timberline Road & Drake Road, Fort Collins. 6) 220 Unit investment sale - The Preserve at the Meadows, along Horsetooth Road just west of College Ave in Fort Collins. 7) 2.61± ac. site just SE of Harmony Road & Lemay Ave in Fort Collins. (Mixed-use apartments & commercial) 8) 16.9± ac. site fronting Timberline Road, approx. 1.25 miles south of Harmony Road in Fort Collins. 9) 20± ac. site SE of College Avenue & Trilby Road, Fort Collins. 10) 17.6± ac. site west of U.S. 287 & adjacent to a Wal-Mart Supercenter in Loveland. 11) 9.64± ac. site west of U.S. 287 & the Wal-Mart Supercenter in Loveland. 12) 10.5± ac. site SE of I-25 & US 34, within the 2534 mixed-use, master planned, community in Johnstown. 13) 8.5± ac. site SE of I-25 & US 34, within the 2534 mixed-use, master planned, community in Johnstown. 14) 12.78± ac. site SE of I-25 & US 34, within the 2534 mixed-use, master planned, community in Johnstown. Available Available 2 1 Available A ffordable housing availabil- ity continues to be a prob- lem throughout Colorado and much of the United States. Manufactured hous- ing communities are an attractive option to those seeking both home ownership and affordable housing. That said, manufactured housing communities have unique legal challenges given the ownership structure within many of these communities. More specifically, the owners of the manufactured houses (“homeowners”) frequently own their home, which consti- tutes personal property and not real property, while a third party (a “lot owner”), often a real estate investor, owns the ground under the manufactured homes, which is then leased to homeowners. This creates a unique set of chal- lenges, as homeowners both rent and own their living space. In order to combat some of the issues aris- ing out of this unique situation in manufactured housing communi- ties, HB19-1309 has been passed and signed into law in Colorado. HB19-1309 aims to give homeown- ers more protections and a more accessible dispute resolution pro- cess. The notable portions of HB19- 1309: • Allow evicted residents 30 days to vacate, which is a significant increase from the 48-hour timeline under the previous law; • Create a dispute resolution pro- gram run by the Division of Hous- ing of the Department of Local Affairs; and • Allow counties to pass their own manufactured housing regula- tions to supple- ment HB19-1309. The purpose of this article is to highlight the changes in law made by HB19- 1309, and also highlight potential unintended conse- quences of the same. One of the most notable provi- sions increases the amount of time evicted residents have to vacate, as noted above. With a short turn- around of 48 hours under prior law, evicted residents often could not move their manufactured homes prior to eviction and would be forced to abandon their homes (often resulting in a forfeiture of ownership of the manufactured home to the lot owner). HB19-1309 extends the eviction time frame from 48 hours to 30 days to allevi- ate this problem. That said, the extended time frame for removal could be a detriment to other resi- dents. With the extended time to vacate, lot owners may be unable to remove dangerous or trouble- some tenants to the detriment of others in the community. Addition- ally, with the increased demand for affordable housing in Colorado, the extended eviction times may reduce turnover for problem resi- dents, and thus reduce the amount of available hous- ing for new ten- ants. In addition, HB19-1309 con- tains a new dis- pute resolution program that is intended to give homeowners more accessible means to settle disputes with lot owners. The program is established and funded by a fee imposed on lot owners. The goal is to facilitate efficient resolutions without legal costs being a bar to homeowners seeking redress. The bill, however, allows the lot owner to split 50% of the fee used to run the program with renters, which will increase the rent for all homeowners and increase operating costs for lot owners. The dispute resolution program also allows for lot own- ers to be fined if found in viola- tion of the Mobile Home Parks Act or the program. With higher risk of being fined by the program, lot owners’ cost of business could rise significantly, which may discour- age investment in the industry or result in higher rents being passed on to homeowners to offset this risk. Finally, HB19-1309 allows coun- ties to impose their own legislation and regulations on manufactured housing communities. Previously, home-ruled cities in Colorado were permitted to establish their own laws regarding manufactured hous- ing communities, but there was no such ability available to counties to regulate manufactured home communities. HB19-1309 addresses this gap in regulatory coverage. While easier for cities and counties to enact legislation, the act may cause issues for lot owners. With the potential for varying county laws, owners of multiple communi- ties in different counties may have difficulty dealing with variations in the law. This could discourage the operation of multiple communities and raise costs for lot owners that are required to accommodate vary- ing regulations (and thus, result in an increase in rents to homeown- ers, as lot owners will be encour- aged to pass these costs over to residents). Overall, HB19-1309 seeks to give homeowners more protections. The issue with HB19-1309, however, is the protections could end up rais- ing lot rent, exasperate the need for affordable housing and discour- age investment and operation of manufactured housing communi- ties. Indeed, this may exacerbate an existing problem as many homeowners already are being driven out of their communities due to rapidly rising lot rent. It will be key to pay attention to how the bill affects the manufactured hous- ing industry in Colorado, as the bill, while based on meritorious consid- erations and principles, may bring detrimental effects to lot owners and homeowners alike. ▲ Colo. manufactured housing bill goes into effect Rich Thomas Shareholder, Brownstein Hyatt Farber Schreck Jake Stephen Intern, Brownstein Hyatt Farber Schreck