Amends the Denver Revised Municipal Code by adding a new Article XII to Chapter 10 concerning construction defect claims in common interest communities.
768, as amended, has failed. All right. Next, we are moving on to we are moving on to 811. Councilman Flynn, will you please put Bill 811 on the floor? Mr. President, as I move. Thank you, Mr. President. I move that council bill 811 be ordered published. You got it. It has been moved and seconded. The public hearing on Council Bill 811 is now open and we'll wait a couple of minutes. Just to make sure that everyone can hear. That's right. You know. Maybe. Maybe we have a staff report. Yeah, there are priorities. Mr. President, I will take a few minutes to give the staff report. I'll try to be as brief as possible in light of the hour that we have a full written record of the rationale for the bill in the file. So that that allows me to be somewhat brief. And Skye, Stuart and I will be available for questions about the the proposal after the folks have a chance to make their comments. The can we ask that the doors be closed? Can we please shut the doors just so that we don't hear the noise outside? Go ahead, David. Thank you, Mr. President. As you all know, this proposal comes forward from the mayor's office. If council proceeds with the ordinance has proposed or some version of it, Denver will become the ninth home rule municipality on the front range to adopt an ordinance addressing the issue of construction defects. We understand from conversations with our counterparts in other cities that there are others about to come online testify. Colorado Springs is considering a bill next week on first reading on the same subject, which in fact borrows some of the elements from the bill in front of you tonight, particularly the new elements regarding building permit building codes and how they're used in construction defect defect litigation. All the cities who have been seeking to address this locally, including the mayor's proposal before you tonight, are motivated primarily by one thing. And that's the dearth of condominium construction currently in Colorado and what efforts can be made by municipalities to reinvigorate and catalyze once again, the the the condominium construction industry in order to provide that as a housing choice for our residents. As we explained to the committee a couple of weeks ago how we illegally analyze this whole thing as a matter of mixed state and local concern, where you're you have some opportunity to regulate and legislate at the local level, as does the state. The interest in quality and affordability and availability of housing is something that really knows no boundaries. The state has laws on this subject to municipalities can as well. We've talked about the particular interest in Denver in incentivizing our condo market because of our basically we're the most urbanized and popular populous city in the state where a lot of our growth opportunities are going to be vertical, not horizontal. And if we want our home homeownership opportunities, inevitably they're going to have to be in a condominium format in a more urban environment, as well as our obvious character as a transit hub with lots of opportunities for transit oriented development. While we're obviously experiencing significant construction boom in Denver right now. Virtually all of the vertical residential that we're seeing in town is apartments, is not condominiums. And this is an imbalance that the ordinances has designed to try to effect to the positive in terms of, again, incentivizing more condominium development. To the extent we're having condominium development in Denver, it's all on the luxury end of the scale because of the risks and costs associated with condo development. Again, one of the major rationales for proposing the bill. The hope is that if we have more condominium construction in the future and somewhat more normal percentages of our new available housing stock, that it may have a moderating, in fact, impact on housing costs, both on the for sale side as well as the rental side. Because even though we have a lot of cranes out there, a lot of vertical getting built to the rental that is getting built tends to be at a very high end as well . So if people have more opportunities for for sale units in a more urban environment, in a TOD environment that may have a moderating effect on the high rents that we're seeing. I won't go. I won't go. I don't need to speak at length about how Denver has been at or near the top in terms of housing inflationary costs as compared to peers, cities all throughout the United States over the last several years. The the as we've discussed in with each of you individually and in committee, the premise behind the bill is that construction defect litigation trends over the last ten years is one of the leading causes of the dearth of condominium construction. Nobody is claiming that it's the only cause. There are other economic factors. There are other market factors in play as well. But the premise of the bill is certainly that condominium defects, construction litigation and claims in the condominium market, in particular in common interest communities based upon all kind of evidence we've received from people who work in this area on the ground is one of the main causes that we aren't seeing. The product getting built are getting built in a wider variety of price points. So, so very quickly, the contents of the ordinance we try to address to the extent a municipal ordinance can to try to address some of the legal landscape in which construction defect claims are brought in and common interest communities. There's the element of the bill regarding how our building codes may or may not be used and defect litigation. We believe there's strong case law supporting your ability to influence the manner in which code violations can be used either either as a sword by the plaintiffs or code compliance can be used as a shield by the defendants, as explained in our written materials. And this proposal that's kind of maybe the centerpiece of the proposal is to urge you to adopt. Specific, specific local legislation talking about how our codes are used in these battles. Secondly, the major theme of the bill is to support alternative dispute resolution, particularly arbitration in lieu of litigation as a way to more efficiently and nobly and with a greater degree of certainty for all the parties and get to resolution of these claims as the ultimate end game instead of litigation promoting arbitration where the covenants have already provided for it. This bill does not mandate the use of arbitration in other forms of ADR. But it says when the Declaration of Covenants have provided for it and condo purchasers have bought into those communities, that Denver law supports the use of ADR, where the parties themselves have agreed to it under the covenants. And finally, there's the informed consent component of the bill that talks about the concept that on this most important investment, just about any of us ever make the home that we invest in. If there's going to be construction defect litigation, that there be a higher degree of buying involvement by the people whose condo units will be tied up in either the arbitration or the litigation if a claim is filed. And again, we're available to answer questions on any of these after the hearing. A couple of quick couple of quick clarifications from questions we've heard from you all. The ordinance clearly strictly only has prospective application in the future. It doesn't affect any homes built in the past. And to the extent it applies in the future, it's only in the common interest ownership situation, which will typically mean condo buildings almost always mean condo buildings in the future. New common interest communities established after January 1st with no retroactive effect on anybody whatsoever. And then finally, another really important point of clarification, and I, I want to thank House Manu for circulating. For those of you who had any interest in seeing at the the state law, which fundamentally regulates the claims process, the notice of claim process , the Construction Defect Action Reform Act, originally adopted in 2001, is not affected at all by this bill. A conscious effort was made in this proposed legislation not to interfere with her conflict with in any way the parties respective rights and responsibilities under sadara as has been balanced by the state legislature. This goes back to my original point, which we think it's essential if this ordinance is adopted and never tested in court, that it not conflict with existing state statutory law. So efforts are made here not to conflict with sadara and not to conflict with the Color Consumer Protection Act either, which is another statutory route that plaintiffs sometimes take to sue builders with construction defect claims. Well, absolutely. The intent of the ordinance is not to create any conflict with state law, although it definitely adds some additional elements locally that don't currently exist in state law. So that's my quick report. And again, a lot of detail left out, but I know the hours late, Mr. President. Thank you, David. This is a one out of courtesy public hearing, and with 3 minutes each, you can quickly do the math and the number of speakers we can have. We have 22 people signed up to speak. So I'm going to ask that you certainly have 3 minutes that there's an opportunity for you could do it. And two, to allow these last two speakers. It would be unfortunate if people had stayed late and didn't have the opportunity to speak, but we will see how it goes. First, five speakers Trinidad Rodriguez, Justin Blue, Aaron Foy, Jonathan Harris and Mr. Siku. So if you five can make your way up to the front pew, we will go ahead and begin. And Mr. Rodriguez, you can begin your remarks. Great. Thank you, members of council, for considering this very important ordinance. I am Trinidad Rodriguez. I'm a resident of Denver. I work at 1550 Market Street, Suite 300 and Denver. I'm the past chair of the Board of Commissioners of Denver Housing Authority. I continue to serve on the Board of Commission of DHS. I am the Vice Chair of Denver Civic Ventures and more member of the board of the Downtown Denver Partnership Management Group. And I'm here speaking in part on behalf of both organizations, but we have others here to address the body from the downtown Denver Partnership as well . Both DOJ and the Downtown Denver Partnership CDP are acutely aware of the dire need for affordable housing options that Denver is currently facing. DOJ has been pursuing a steady strategy to revitalize what used to be referred to as projects neighborhoods heavily impacted by poverty into sustainable, vibrant communities with more diverse, more and diverse housing options in the following communities Curtis Park, Benedict Park Place and Mariposa District. All told, this water could represent 480 units of for sale product in transit oriented development communities. Incredibly high value development opportunities in areas that, as I said, were impacted by poverty and create tremendous housing options for people of many incomes and and many backgrounds. Endeavor efforts to stall. Those are efforts to develop for sale. Housing in those communities over the years has failed. Clearly, the economic downturn and overall real estate credit crisis had major impacts on the ability to develop these properties with for sale housing. This we as an agency have a number of very attractive opportunities to develop for sale housing to create again diverse housing options at many price points. Affordable housing, affordable for sale housing was a key component of our applications to the federal government under Hope six and now in the Future Choice Neighborhood Initiatives Grants, capital grants that would provide for massive investment into Denver communities to create these for sale, condo and townhome housing opportunities. So this is yet another way that the city can support Denver housing authorities efforts to create these vibrant communities that create a range of different ways for families to build sustainable lives and and financial security. So I ask you to. Senator Rodriguez, your 3 minutes is up. Thank you. Thank you. Next, we have Justin Ballou. Don't see just a blue. All right. Next, we have Aaron Foy. Evening. My name's Erin Foy. I'm a principal with Boulevard Builders and a resident. Of Hutchinson's Hutchinson Hills in southeast Denver. We're a builder of multifamily for sale housing here in metro Denver. We're currently building 28 townhomes in the River North neighborhood and have a couple other projects around town. We're also looking at some other larger sites in the city and county of Denver with the hope to build as many as or more than 100 units. The lack of a de facto ordinance has created some strange incentives for companies like ours. We've seen some other competitors who. Build townhomes with no highways. Which leaves kind of weird questions about payment of water, tap bills and other things. And then and then also leads us to not maximize the density that's already built into the Denver code. Our first project, for example, is built on a CM x five zoning zoned lot, but we're only building three storey buildings. And, and in general, the current building climate makes our sort of project very difficult. It's difficult to find investors. We've had conversations with banks who at the very first conversation said we will. Not finance a for sale attached product in Colorado. And these are local banks, Denver based banks, who just won't. Won't touch. Our industry today. And as a result, we end up getting financing through private sources, ends up making our financing more expensive. We add in the insurance costs and other costs and means that the only way we can truly build this product is to build the top end of the market, selling in the 400 and $500,000, I guess, to. One of the points that I think is going to be made from some of the opponents of this ordinance. Related to demand for condos or for townhomes. When we first opened our project in River. North, we were starting our prices in the mid 300,000. Range. We ended up with a with a interest list of 200 people for our final 14 units in that project. I think if people are able to hit that price point, which I think with condominiums we can, there's going to be we're going to see tremendous. Demand and a tremendous number of projects that that take. Off. Like I said, there are a lot of challenges with raising the money and getting these projects done. And hopefully this ordinance helped. And I think that's what I saying. Thank you. Jonathan Harris. Leaving Council. Thank you. My name is Jonathan Harris. I'm a condominium owner who's been through a defer claim and also president of Build our Homes. Right. Build our Homes Right is an organization of individuals who have been. Through deferred claims or allies and legal advocates. I purchased a brand new condominium in Denver that. Leaked water from. Around windows and doorways. The concrete interior courtyard was sloped incorrectly, causing the water to run into the drains and away. From the drains and into the condominiums. Two units in our complex were so badly water damage that they were uninhabitable. Our association worked with the developer and builders for years to obtain a solution. Using and use the litigation only as a last. Resort. Denver has a problem. With the shortage of condominiums and. Affordable housing. The proposed ordinance does nothing to address those issues. It does. Create a magnet. For substandard. Design and. Construction. Low and moderate income homeowners. Homeowners are the hardest hit by faulty construction. And Denver already has some of the weakest consumer protections. The builders and developers. Tell us that they are building condominiums because the DFA claims. To have made insurance for them. So expensive and effect claims. Lawsuits common. The solution for homeowner homebuilders is to build homes free of defects in the first place, not to weaken the rights of consumers. Why is the. Building industry so afraid to stand behind their product? I became involved in this issue because I see an attempt to strip away our. Rights and privileges to a court. Trial and a defect claim. This ordinance. Singles out and discriminates against homeowners. Rights. By allowing forced arbitration weighting in favor of developers. To be mandated in in dispute resolution. Arbitration was. Originally intended for large corporations with lots of money to resolve disputes between themselves, not for large. Companies against north of small nonprofit organizations. Our courts are meant to balance the scales of justice. This proposed ordinance has no guarantees that condominiums will be built, but it does take people's rights away. The mayor. Himself couldn't. Promise more condos and affordable housing options would come of. This ordinance. In fact, a similar measure. In Lakewood. Passed over a year ago, a year. Ago now and now has no. New condo project permits have been filed. The author of the story Sorry, it's time to take a pill. Silly people didn't realize there's going to be. So it doesn't address the problem of substandard and defective. Construction, which created the large number of legal claims. Other organizations that. Oppose this ordinance are there color. Latino leadership. Advocacy and research organization. The Latino. With the Heritage Chapter? You're 3 minutes is up. I do apologize for that. Please vote no on this ordinance. Thank you. Next, we have Mr. Sekou and Mr. Sekou comes up on my call. The next five, Liberty Lewis, Jason Peck, Ashley, Doug Douglas, Justin Croft and Pat Pacey. So you can make your way to the front pew. And Mr. Skinner, you can begin, right? Earmarks. Yes. Jeremy SIEGEL of Black Star Action Movement representing poor, working, poor and homeless people. We stand with the previous speaker opposed to this ordinance and with a little bit of experience as the housing director for The View on his point Community Development Corporation in San Francisco, who rehabbed the Navy shipyards out in San Francisco. And having a little experience with with contractors. This ordinance is the abomination because it doesn't set the standards for what is normally considered appropriate. I could not build a house for somebody else that I wouldn't live in because of the way I built it. And one of the problems of this country is that we have settled for mediocrity and less than in exchange for a proper model. And then the thing falls apart and everybody wants to walk away like it ain't about nothing. Well, what happened to us, man? What happened to us? See, we used to stand for something. But now we just go for anything. And then folks come in developers and they just bully and run over our communities, man with no consequences. And then we vote for this mess with no conscience. Would you buy a house with a defect in the person who built the house to walk away from with no consequence? Are you kidding me? Come on, y'all. That's crazy. And yet we see a constant decline in the quality of life of the American citizen. The average Joe Plumber guy who doesn't have the money to fight. So we know that the interests of one in a condominium complex into some wall at the plumbing don't work for me and then go to work for nobody. So we all go down the drain and everybody just walks away like, well, welcome to the free market system. Well, that's not free market. That's capitalism. That's cronyism. And there's another word for it that I buy. Used to probably get me put out of here. Come on, Joe. No, absolutely not. Everybody's got to stay on their dime. Everybody's got to take personal responsibility for what they do, including these corporations, including these associations that do this kind of stuff. If somebody could stand up for 3. Minutes is a guy. Thank you, Mr. Speaker. Next, we have Liberty Lewis. Good evening, counsel. Thank you for the time. My name is Liberty Lewis. I'm a licensed professional engineer and a resident of the Berkeley neighborhood. I want to speak today specifically about concerns related to the amount of. Construction that falls outside the explicit and prescriptive nature of. The code. There is a significant amount. Of. The work that is done on a. Jobsite. That comes not from a specific measurement provided. In the code or a specific section of the code, but to designers. Interpretations of those codes. It's for that reason that both the code and the building department require that plans be. Presented, prepared, reviewed, and that's typically a multistep process. There's some discussion as to how are those codes being interpreted. How is the application of the performance standards. Of those codes being achieved by those designers? And though that lack. Of prescriptive nature, the fact that you can't go to the code on many issues and say. This is exactly how it must be constructed. Makes this ordinance challenging to enforce and to ensure that we have quality construction. To this point, I've read the Building Department's response to the recent. Concerns about this ordinance. One of the items they point out. For instance, is that the building code does specifically require compliance with the window manufacturers installation instructions. I agree that's true. However, that. Language is not included in the requirements for installation. Of stone, of bricks, of facades, of trusses. Of structural connectors. None of that requirement to meet the standard is explicitly listed out in the code. It must also be noted that the code which provides. Minimum standards. Doesn't touch on. Is in its own nature, consistently behind the times because of how the code is prepared, because of how new materials. Are brought into the industry, because those. Materials must warrant and they must be used in that industry. And regulated before they meet sort of the level that they're even considered by the code writers. Those code writers then must write the code, adopt the code, and then this body must also adopt that code. There are materials that Denver. Being on the cutting edge of many energy efficiency requirements of many. New modern materials there. There are without being used on a regular basis that are not touched in any way by the code, such as rain screens, green roofs, attachment of. Solar panels. All of these items are. Not expressly discussed in the code, but could potentially be read to be. In the wall coverings section of the code, for instance, depending on interpretation, which would then be covered in the code. So if a rain. Screen which is not expressed in the code is installed. Incorrectly, it may meet the. I'm going to lose my time. So I'll just say there are holes in the code that we address with plans and drawings. And by ignoring those things. Your time is up. Willy Falls. Thank you, Jason Peck. Thank you. My name's Jason Peck. Thank you, city council, for your time this evening. I'm a realtor, local realtor. My office is just right down the street. I also have served in a capacity with Denver Metro Association of Realtors as government affairs chair and also served on the Board of Directors, which covers about 6000 local members here in the city of Denver. That's O'Hare. What I want to share with you is actually a story of one of my clients. I can get you a long speech, but I felt is more important. I have multiple stories, but one in particular I'd like to share with you this evening. The client there was a Denver firefighter who end up losing his condo because of construction defects. His condo didn't have a defect. What occurred with his condo complex was on the north facing side. There are some ducts leaking. About 15% of the homeowners had leaky decks that were icing up on the north face. He decided to file a lawsuit. He didn't know about the lawsuit. He wasn't informed about it, so forth. He didn't find out about it until he tried to refinance back when the market crash was occurring, he found out he can't refinance. The proponents are the people that are against this ordinance won't talk to you about is the impact of war instability. When a condo complex goes into a lawsuit and litigation occurs, it's no longer warranted. Wolfer for lending. Okay. It's very limited from that standpoint once it's settled. Fannie, Freddie Mae. Fannie Mae. Freddie Mac. FHA won't land for minimum two years after the lawsuit has been settled. So in his case, since he wasn't able to refinance, we tried selling his property, we tried short selling it. Reason we had a short sell. It was because his property value overnight dropped by 50,000. He owed more than what it was worth. Okay. And ultimately, he ended up doing a strategic foreclosure on that property lawsuit wise. No one in that in that complex could have been able to refinance or sell their property unless it was a cash investor or someone doing a portfolio loan. What is important about this ordinance is it speeds up the process. A lot of this litigation goes on for five, six, seven years. It gives an opportunity for the builder and the homeowners to come to the table and work it through arbitration. The other aspect that's important about this ordinance is proper notification. Why not give the homeowners a right to vote on this versus leaving it to the board of that homeowner's association? I'm more than happy to provide other stories or answer any story questions later on. Feel free to call me up. Thank you. Thank you. Actually, Douglas. Good evening. My name is Ashley Douglas and I have worked for reconstruction experts for the last six and a half years. Over the last six and a half years, I've interacted with many boards of directors and community members who are dealing with construction defect. And I know firsthand the devastating and severe impact that it's had on their lives. I have a few stories of some specific people that I've gotten to know. First would be Lorna, who loved to spend time on her patio. She was diagnosed with terminal cancer, and for the last few months of her life, she did not get to enjoy her patio because it was condemned as unstable. Next would be Nathan, who felt a tremendous responsibility as a board president. He lived in a community that housed mostly active duty military, and he knew that these people were living in homes that had firewalls that were inadequately rated. And he just he knew that he had to protect them in some way, and he wasn't able to do that. And then any moment the unthinkable could happen and put these people in harm's way. Lastly would be Jerry, who called me in tears as a waterfall, cascaded down her down the walls of her home. She experienced five water losses in a period of two months due to improper grading and drainage in her community. Those in support of this ordinance are putting a limit on a homeowner's ability to file a frivolous lawsuit against their builder. But are we saying that a structurally stable patio, adequately rated firewalls, and properly graded and drained communities are frivolous expectations of a homeowner? As is written now, this ordinance makes it nearly impossible for an H way to hold their builder accountable for serious and legitimate construction defect. So much money and time is being spent on getting this ordinance to pass. But where is the conversation about holding the builder accountable for proper means and methods of construction? What are the processes and procedures that are going to be implemented going forward to make sure our homeowners are buying products that are not defective and potentially life threatening to live in the current inspections and quality checks process has failed. So the answer is simple build it right. Thank you. Thank you, Miss Douglas. Justin Croft. Good evening, members of council. Thank you for your time tonight. My name is Justin Croft. I work at three, five or seven rings be caught in the taxi development. I am the president of the New Rhino Business Improvement District. I'm also the co-founder and co-chair of the Rhino Urban Improvement Committee, which essentially handles the registered neighborhood organization duties for the Rhino Art District. And I work with Mickey and Karl. Zeppelin is up in development. I'm also a millennial. A number of us are in our thirties at this point, so watch out. So I'm here tonight just to stand up in support of this ordinance. In Rhino, we have an incredibly unique community. We have a mixture of developers, artists and small business owners all working together and really have come together over the last year to form the Business Improvement District. And the tagline you might remember, those of you that were here for the Business Improvement District was Keep running wild. So there's really been this momentum in the neighborhood to try to keep what's what's there. And a lot of what's there is the artists and the small business owners who have built up kind of the soul and the culture of that neighborhood. The stakeholders in Rhino have significantly contributed through the Business Improvement District, and we also passed a general improvement district on the west side of the neighborhood to the tune of an increase in taxes of four mills, which is $580,000 for the 2016 budget for the bid. Another four mills, which is equates to $300,000 for the guide. And then an additional assessment along Brighton Boulevard, specifically for capital improvements in partnership with the city for the $26 million investment for Brighton Boulevard. And to speak to that, the city really has been an incredible partner over there with the formation of the DCC and just the significant investment that's going on in Rhino. So as part of Keeping Rhino Wild. We are planning on rolling out a number of strategies beginning next year that specifically target affordability in the district. And as you know, affordability is a very complex issue. So we're trying to figure out, you know, what different things can we put in place to impact that? That looks like we're looking at a low interest revolving loan program for small businesses. We're working with Artspace, a developer that specifically builds low income housing in neighborhoods that are historically home for artists to keep them living in their neighborhood. We're looking at art grants and commissions for artists, and we're also working on marketing events and Placemaking for Rhino specifically to try to bring dollars to the neighborhood and keep those who have really built up that neighborhood in place. For the bill in question, it's become clear to us that there are a number of people not only in Denver, but specifically in Rhino, who were there. Condos available would purchase those condos as a first entry into ownership or potentially as a second home. And right now, because they can't, the it artificially increases the price of apartments and single family homes. So we feel like there's really pressure on these different aspects of the homebuying market and that are negatively affecting affordability and rhino. So I'll just close in saying that we need the city as a partner among the variety of tools that we're working on that you all host across. Yes. 3 minutes is okay. Okay. I'll just say please vote yes for this thinking. Thank you. Next we have Pat Pasi. And as Pat comes up on a call, the next five. Tom Clark, Adam Maldonado, gymnast Maria, Flavia and Buzz Coble. And you five. Please make your way to from Pew. Pat, you can go ahead and begin your race. Yes, my name is Patricia Pasi and I'm an economist and have a small economic and business consulting firm up in Boulder. And I was retrained over retained over a year ago by build our homes right to do housing market analysis which I as to my understanding most of the members of the council have received a copy of it. What I'm going to say here tonight is basically what I said then. Markets work. Economists do believe markets work. The housing market is working in the right direction. The data is indicating that 22% of the new multi-family applications within the city of Denver have been identified as for sale properties. This is without any change in the ordinance as 22%. The data also shows in Lakewood, which was the first, to my understanding, municipality to pass an ordinance. There have been no new multifamily permits to our understanding that indicate that they're for sales since that that was passed. The basic reason for this is because the market is about supply for and demand of housing. Supply always legs demand. It's supposed to and it should. You can't expect a builder to build a multifamily condominium unit and then wait for demand to come later because they would have no profits. Their costs would be eaten up in that. So we expect demand to always be ahead of supply. It's a basic economic axiom. And so then the question is, well, why have there been high rent condominiums or high value condominiums and high rent rentals? Basically because the market would say that's where the best profits have been. That's in the past few years. That's where the best profits for builders to be and developers to be, and that's where they should be. We don't expect them to build less profitable or unaffordable things at the time. More specifically about what's going on in the market, and we said it before and people and economists are saying that now the market is moving in the right direction. Demand has to be both willing and able. Lending requirements are loosening up. Earnings for millennials and minorities are improving, although not at the levels they were in 2006 or seven, but improving. So they're more able to start buying, and so demand is going up. There are also other societal types of trends. We know that millennials have delayed marriage and delayed childbearing and have delayed homeownership. How much of that is a permanent trend and how much is that is simply a trend. A different trend from earlier generations is still not clear. But millennials are beginning to enter the market and they are becoming more willing, as are minorities. Then we turn to supply. What's been happening with supply? What we know about with supply and what we've been able to identify quantitatively. Is if you can wrap up 3 minutes. Well. Okay, that was. You want to make 1/2. Okay. All right. Next up, we have Mr. Tom Clark. I'm the city council. My name is Tom Clark. I'm the CEO of the Metro Denver EDC. I'm also a member of the Homeownership Opportunity Alliance. Three years ago, the Metro Mayors Caucus came into our office and said, We can't understand why. We can't get anybody interested in building condominiums on our transit side. Transit stops. Could you please help us understand what's going on in the marketplace? We created an organization called The Homeowner excuse me, the Homeowner Opportunity Alliance, which is now 55 organizations made up of housing advocates, housing authorities, economic development groups, chambers of commerce, all focused on one issue How could we get condos built? And we weren't interested in $400,000 condos, $400,000 condo in metro Denver today. Is the price you need to be able to pay for and 100% guarantee of litigation for construction defects. We were looking at 170 to $290000 condos. This were condos that what we called attainable housing. These were housing for seniors who wanted to move out of a three bedroom, three bathroom house and move into a condo along a transit line. Young millennials, who people are quick to say are never going to buy a home. And I'm surprised that the person who spoke before me a year ago actually said that in public that millennials don't buy houses. 80% of millennials plan to buy houses. What we found also was that construction defects were the primary cause, and most of the people have covered most of the issues in this ordinance that I was planning on talking about, and I won't go into them. But what is important to us is that this is a project that is not about expensive home condominiums. It's an issue about what do we do for young families and what do we do for seniors and what do we do? Not just in Denver, but what do we do in collar suburbs where we have median wage rates that are much higher than other parts of the region where elderly cannot age in place, stay in their community, get out of a home they can no longer manage and move into much more manageable housing. You have created in this ordinance a much better process than we have. There is a market out here and if there was not a market, there would been not we would not have set a record last year in used condos . Last year we built nine that we sell sold 9900 condos in metro Denver, but we only built 187. You will see as a result of the efforts that many people are undergoing in many cities around this community, we're over a million people in Colorado are now covered by construction defects. The classes are. 3 minutes of that. They're coming. Thank you. Thank you, sir. Adam Maldonado. Members, thank. You for your time tonight. My name is Adam Maldonado, and I'm a manager with reconstruction experts. I worked with reconstruction. Experts for a little over five years, and I spent a decade in new construction prior to getting involved in the reconstruction side of the business. I have seen construction defects. Related to all sorts of construction assemblies, building envelopes, structural. Grading, drainage. Fire ratings, you name it. We've seen it built wrong. I've seen these defects in multi-family units. As has been discussed tonight. I've seen it in single family homes. I've seen it in apartments. And I've seen it in commercial spaces as well. These defects affect all types of construction, not multifamily alone. My role at. Ari allows. Me to. See this issue through a. Lens of impacted property owners, people who have that fear in their eyes. They don't know what to do when their house is leaking or their business is suffering. One project that I worked on here in Denver was a large downtown apartment community that had significant building envelope defects. These defects resulted in structural damage. They resulted in water intrusion and resulted in mold. Personal property loss. To the tenants as well as to the property owner of the apartment complex. Every project that I've worked on, the property owners have suffered as a result of the inherent defects in their buildings. I believe this ordinance will make it more difficult and more burdensome for the victims of these properties to protect themselves, their property and their families. Thank you. Thank you. Jim Nash. Thank you. Four years ago, my wife and I moved back to Denver. We retired from long broadcasting careers the last 17 years in Los Angeles, 35 and more. Years ago, she and I met at Channel two in Denver. We went to Washington for ten years, and I'm done with that. Now I'm Grandpa and I live here in Denver, where our families fortunately live in District four, well represented by Kendra Black. Thank you. The reason I care about this is because I love Denver. This is my hometown. I don't like what's happening because trial lawyers are shaking down the whole city. The people that work on the other side of the park here, the legislature handed them a bonanza. They are suing everybody I know. I used to be the president of a homeowners association. Townhouses outside Washington, D.C.. We were being sued. No. By Mr. Nash. Mr. Nash? Nobody could see us, counsel. Sorry. The point I want to make is this. There are two running stories about Denver. Number one, it's the number one millennial destination in the country. That's wonderful that the best and brightest, young, bright people are moving here looking for occupations, futures. The other running story is that for the last two or three years, we've had the most rapidly increasing cost of housing in the country. Pretty soon those millennials are going to say, I don't know, I guess I'll go to Salt Lake City or Austin. Oh, Texas housing is cheap there. I can't afford to live with those prices up there in that Mile High City. I'm really worried about what's going to happen here. Mayor Hancock is asking you to do the job that the people that work on the other side of the park won't do. For some reason, our governor has ignored a bipartisan majority in both houses. He won't act. He won't lead. You have to. You've got to send a strong message to those people up there, get on the stick and do this right. In the meantime, as soon as you pass this. The trial lawyers will take you to court. They'll fight you for years. And who knows what judges are going to do in the state state justice system? You've got to put pressure on those people to make this law fix it. The things that are in this ordinance are what should be in that state law. Please do this for the future of Denver. Or they're going to stop coming here. Thank you. Thank you, Mr. Nash. Mary Livia. The thank you, counsel. My name is Mary Livia. I'm President. My H0 of 266 unit high rise condo in DTC. I'm a retired commercial real estate broker with 30 years experience in the Washington, D.C. market. Colorado Public Radio reported this morning that slow condominium development is not unique to Denver and is, in fact a national issue. Yet developers have managed to convince our local representatives condo development lags because of frivolous construction defect suits that raise insurance costs as a victim of construction defects and having that many others who've had the same experience, I can assure you these lawsuits are anything but frivolous. While your desire for more affordable housing and entry level condos is admirable, I question why you support an ordinance that does not ensure this will happen. Have representatives from the insurance industry assured you their rates will drop? Upon its passage, this ordinance requires owners to prove the defects were not built according to code. If code requires, windows must also be installed according to the manufacturer's specifications. How did the 1000 windows in my community meet code? How is the certificate of occupancy granted? The window manufacturer and architect warned our developer by not following their specs it would lead to leaks and condensation. Sure enough, we heard. Excuse me. We had leaks and condensation. We only learned the developer did not follow the specs or adhere. Of those warnings through discovery, which may not be allowed in arbitration if this ordinance passes. This ordinance allows a developer to write into a condos declaration, an arbitration clause, where he can choose the arbitrator. He can prevent discovery, and he can forbid the owners from amending that article. He holds all the cards. All this ordinance does is bind the hands of your constituents by forcing them into developer controlled arbitration and removes our right to a trial by jury. This ordinance does nothing to require developers to build it right or hold them accountable for bad construction. I leave you with this scenario. Developer builds two buildings identical side by side, ten stories, 100 units each building. He sells his condos, building b he keeps for himself as a rental. A few years after completion, defects start to appear. Same defects, both buildings, leaky windows being one of them. With this ordinance, the condo owners may not sue the developer, but the developer may sue the contractor for his rental building. So now you have created two classes of citizens, those who have access to the court system, but and those who do not. The developer wins millions to make repairs. But because of the restriction the developer wrote in to the arbitration clause, condo owners can't get it for first space passed. Where is the justice in that? Arbitration creates an alternate system of justice. What is the old adage? The road to hell is paved with good intentions. Please vote no tonight. Do not pave that road. Thank you for your time. Thank you, Miss Livia. Both Coble and as best comes up to call the next five brief like off John Stovall, Joe Bachus. David McLane. Mike Copp. Thank you, Mr. President, members of council. Great to be here tonight. My name is Boz Coble, president of Copeland Company. My father, Stan, founded the company in 1952, and we're considered the longest continually operating real estate community development company in the state. In 1958, we started our flagship community, which is Pinehurst Country Club, the largest at the time master planned golf course community in the city limits of Denver. We always prided ourselves on being pioneers. In 1970, four years after the condominium law was passed, he started building condos along the golf course at Pinehurst, built 140 condos over the next seven or eight years. But since then, we have been sued with no opportunity to try and fix. And as such, we will build no more condos under the current environment. Also, as co-chair of the T-Rex Election Finance Committee in the Speaker's bureau, we marched all over the metro area telling people that the light rail would create market driven smart growth and higher density mixed use at the transit stops. That was a precursor to fast tracked. The tragedy now is there's about $7 billion of light rail construction and 52 stops where I don't think there's any condos for sale that are planned on the books. We think that's that's a bad, bad thing for Denver. Our company is very concerned about affordable housing. We will deliver 400 over the last four years, 400 affordable housing units in in the in the Denver metro area, the largest in the state that a private company delivering. Every one of those is rental. None of them are for sale. Three of them are at transit stops. All of them are our rentals. We're not interested in building condos. What you'll hear from the opponent, the opponents is, first of all, it kind of bothers me when the premise is all builders are bad. Those of us that are local and work hard, we take pride in what we do and we try and correct our problems because they do happen occasionally. They also say this is simply there's just simply no demand. I don't think you can prove a negative. But I'll tell you the flip side of reality. I've already told you we will not build condos even in the two or three or four transit stops that we're currently involved with. So I think I think what you've heard tonight and what I'll say to you, listen to what the proponents have had to say. The last gentleman made some great comments. The fireman story has happened many, many times and has adversely affected people who owned condos and were had tainted title by virtue of the fact that there was a lawsuit that had been filed. So I ask the city of Denver tonight to join Lakewood, Aurora, Commerce City and the others to send a message across the way that this is a problem that is in need of a solution. I greatly appreciate Mayor Hancock, David Broadwell and the rest of the team for doing what they've done to move this along. And I strongly urge you to support this effort tonight. Thank you very much. Thank you. Bruce Lakoff. Thank you. Members of council. I'm. My name is Bruce Lycos, and I've been a resident of Denver for 40 years. I strongly urge you to pass this bill. Really? Take a look at who the burden of our housing crisis falls on today. Frankly, it falls on young folks. You know, we call them millennials. They're not all millennials, but they're looking for their first opportunity to buy a house. It falls on empty nesters, frankly, folks like me. I'm really tired of raking leaves. I was raking him this past week and I'll be raking them again. And we have virtually no empty nester housing in Denver. And the alternative for folks who are empty nesters otherwise, frankly, has Arizona, Florida and empty nesters are an incredibly valuable commodity for our community. In addition to their experience, they pay a lot of taxes and they demand very little in services, particularly in the schools. It also falls particularly heavy on members of our society in our city of color. Getting housing is the very best chance to get your foot on the ladder of wealth building that we have in this country, thanks to Congress. But those are the policies and we don't have that opportunity in our city. And frankly, it's also falling on our merchants and restaurants and the like, because with the incredible increase in apartment rents, we have loads and loads of people paying way more than the recommended 30% of income on housing. That means less dollars available for restaurants, merchants, cultural facilities and the like. I mean, the money's, you know, coming out of somebody's pocket. The other thing I would point out is that Denver isn't a competition. Our friendly neighbors to the east and west, both of whom are in light rail lines, have already adopted these ordinances. And one thing I can tell you, because I've represented developers for most of those 40 years, is they're pretty smart people in figuring out opportunities. And so if they're looking at sites, for example, on the west side of Sheridan Boulevard and the east side of Sheridan Boulevard, and the primary difference is that on the west side of Sheridan Boulevard, their risk of getting sued and losing millions is a lot less. They're pretty smart. They're going to figure that one out quickly. The other thing I'd like to mention is a few things you heard tonight that probably need a little clarification. You heard earlier that there has been a substantial increase in applications for permits for multi-family housing. What you didn't hear is that those are virtually all townhomes, not condos. Townhomes are lovely. It's part of our mix. We need it, but they're not very dense and they're not going to house very many people. You also heard that Lakewood passed an ordinance and they haven't had any condos built yet, which may be true. But I can also tell you from personal experience that developers are at least talking to Lakewood about projects. I can't promise any of those will happen or when they'll happen. But if you don't open the door for developers, nobody will even be talking to Denver. And the last thing that I want to comment on is we heard a few minutes ago that under the current system, developers can select arbitrators with a suggestion that they would automatically be unfair arbitrators. Well, the ordinance you have in front of you tonight would require that any arbitrators be third party impartial neutrals, which is actually a very protective approach for consumers. Thank you. Thank you, John Stovall. Mr. President, council members, thank you for taking time to to listen to some opinions tonight. I'm a real estate broker, have been in Colorado for 42 years, a realtor for most of those years. I actually succeeded in retiring from that. Now I'm a resident in a high rise condominium in the tech center area, 266 units. In fact, Miss Livia is the president of our association and I am the Treasurer. Our building is one that definitely was impacted by construction defects and not just a few windows on one side, but every unit in our building had construction defect repairs that were needed in the unit. So it is something that is of serious interest. And basically the the problem of affordable housing is a totally separate problem. It is a problem that needs some solution. But this isn't it. This isn't what's going to make that happen. This bill seriously erodes a basic right of our citizens, and that is to take their grievances to court. It made a big difference in our situation. Just let me mention a couple of things that were in our original declarations, which, under this ordinance would become extremely difficult to alter. Our original documents required that we had to have permission from the developer to sue the developer. Not likely. Oh. And as long as they had one unit in the property, they had absolute veto. They just say no. And that, by the way, would apply to arbitration as well as it would to litigation. Even with the developer's permission, it would have required 80% vote of the owners. Mandatory arbitration was required, but they specified that they got to pick the arbitrator. With 42 years in real estate. I've seen arbitrations and I know they can be excellent and I know they can be harmful because the arbitrators go one way or another at times. Oh, under the declarations, Discovery was virtually ruled out until we were already into a legal action, and then only with the permission of the arbitrator, we would not have found a number of the serious problems in our building, or at least not the cause for them. Had we not had access through discovery to company records from the developer and the builder. Again, this related to windows leaking. Windows were installed so that the manufacturer canceled the warranties for every window. Mr. Sobel, your 3 minutes is up. Thank you very much. Please don't pass this ordnance. Thank you, Joe Rogers. Good evening. Thank you. The council president, Herman Herndon and honorable council members. My name is Joe Lasseter's. My address is 1430 Larimer Square, Suite 200 and Denver. I'm the chairman of the downtown Denver Partnerships Management Group. I'm here tonight representing nearly 750 downtown business members, over 400 commercial property owners, and 120,000 employees, and the largest business district in the Rocky Mountain region. I'm also here as a developer, which I'll talk about in a minute. Last month, the downtown Denver, Inc board of directors unanimously voted to support Council Bill 811. We believe that diversity of housing options and price points in our center city is essential for sustaining this vibrant 24 seven world class downtown and council. Bill 811 will help us achieve this goal. In 2007, the Downtown Denver Partnership and the city and county of Denver created the downtown area plan. This plan was the guiding vision for the next 20 years of downtown Denver and set a goal of adding 18,000 new housing units. Where are we with this? Well, in 2007, 112 rental units were constructed and 874 sale units. Now, let's flash forward to 2012. 709 rental units versus zero four sale units. And finally, so far in 2015, 1777 multifamily units have been constructed and 59 condominium units have been built. So with all due respect to, you know, previous people who provided testimony tonight, we have a problem and it is a Colorado problem. And I understand that that this this bill may not be everybody's perfect solution for this, but we have a problem. And I'd really like to see the council provide some leadership with this. Yes, we wish it could be solved at the state house, but we really need some leadership. I'll tell you, as a developer, I can't develop condominiums. The first question my insurance company asks me is Have you developed multifamily residential housing for sale in the past ten years? Are you planning on developing if I answer yes to those questions? They are not interested in providing insurance to me. So it's just simply off the books. My banker wants to know the same thing. And not only will a banker not provide financing for these projects, my banker would would see me doing those kinds of projects are putting me at risk. So I think it's really important that we provide some leadership tonight. I really hope that you vote in favor of House Bill 811. Thank you very much. Thank you. Next, we have David McLean. Thank you, Mr. President. Members of council. My name is David McClain. I'm an attorney in Denver, a resident of District four, and I represent homebuilders. And I am here tonight to talk a little bit about what I've heard from some of the folks that have spoken in favor and against the proposed bill. First, with respect to Mr. Nash talked about the problem with the existing state law, and I did want to touch on that because there's a component of Bill 811 that fixes that problem and that problem. If you look at the restriction or how building codes can and can't be used in construction defect litigation. Section ten 202 looks a lot like part of the Construction Defect Action Reform Act, and it comes from the Colorado Statutes 1320 804 which is a restriction on negligence claims under sadara for alleged construction defects, saying that you can't have a negligence claim for a technical code violation unless that causes damage to real or personal property or a threat to health or safety. And the issue with Colorado law is that when that restriction was put into the law in the early 2000s, it was effective. And it was effective because at that time, builders were still able to disclaim implied warranties, implied warranties of the claims that get asserted in these cases that are have been likened by the appellate courts to strict liability for construction defect claims. In 2007, the plaintiff's bar passed or had the legislature pass the Homeowner Protection Act. So as of 2007, builders can no longer disclaim implied warranties, causing there to be a strict liability standard for construction throughout the state. So where the legislature originally had a right in including a restriction on negligence claims it didn't go far enough and that it didn't affect other claims. This ordinance does. And this ordinance kind of writes the where the legislature left off in the early 2000s in Sadara and later in the Homeowner Protection Act and I think puts construction defects back where it should be, that technical code violations should be a construction defect and should be actionable in situations where it impacts the performance of the House, causes a loss of use, causes property damage, or a threat to life or safety. A few other points informed consent. There's been some talk that that 51% is too high a threshold. And I just want to speak to that and say that on a firsthand basis. I've been involved in situations where homeowners associations have overcome that and have moved forward with an action. And then finally, with respect to the idea that there's a right to a jury trial, I just want to dispel that and say that that's not true. Mr. McClain, you're 3 minutes is up. Thank you. Please support. The bill. Next, we have Mike Cup. And after that last speaker, George Krueger. So you can come up as well. Thank you, Mr. President. Members of the council. My name is Mike Capone, the executive director of an organization called Colorado Concern. Colorado Concern is an A and an organization made of 120 plus CEOs across the state. Our main interests are economic in nature, so therefore we care about a vibrant economic outlook for the state of Colorado, which means principally, of course, jobs. And we are seeing more jobs come to the state. But as it relates to the conversation tonight, of course, new job seekers need a place to live. When you step back and you look at the fact that really it is incumbent upon policymakers, in my opinion, to set policy that will encourage things that are so fundamental to be an American, like the ability to get into a home. So my first point really has to do with availability. Policymakers can make all kinds of policy choices that do make it more difficult to access affordable housing. There's no question about this. Policymakers do it all the time on a range of issues. So for some to suggest that the decision that you make as it relates to construction defects won't have any impact on the availability of housing, I think has is demonstrably true. In fact, what we're seeing here in the Denver market, in the Colorado market, I believe, is you're seeing upward pressure being applied on housing specifically because of the policy that that we have in place now. I think the bill that you have before you is a good one. I thank you for taking it up and I thank you for putting up with a lot of folks to come out on a snowy night to talk about this. Secondly. In the last few seconds that I've got here, I'd like to speak to the issue of accountability. It's been suggested that really there are no other provisions wherein a homeowner could have problems fixed outside of litigation. And I would just I would just ask you to think about that statement or that very idea for a moment. How many times in your daily lives do you need litigation to solve problems? There are other mechanisms in place in daily life that work, common sense solutions that work, that help people get through problems quickly. You've got a good solution in this bill. Ask for your support. Thank you. And last, Speaker George Krueger. Good evening. Good evening, counsel, and thank you for letting me speak. My name is George Krueger. I live on Capitol Hill. I want to make a couple comments here from the bill that's actually come starting in Section ten, does 202 under see says the building codes adopted in Article two of this Chapter ten are intent to establish a minimum standard for safe and sound construction in Denver. And that same thing, if you go up to a in a violation of any building code as adopted in Article two of this Chapter ten, or a failure to substantially comply with any such code shall not create a private cause for action, a violation of any building code as adopted in Article two of this chapter, or a failure to substantially comply with any such code may not be used to support or approve any construction defect claim, regardless of the statutory or common law theory under which the claim is asserted, except for actual damages or possibility damages to life and limb. This does not address any loss of value in the property or any insurability. I understand this bill is brought forward to promote condo development and I can understand that we need a bunch of different solutions for people that are looking for housing. But if the developers no excuse to bust Caldwell there cannot ensure that they and their subcontractors can meet or exceed the building codes. Maybe they shouldn't be built working in Denver anymore. I would have to agree with Mr. Sekou Adam Maldonado and Ashley Douglas that if you want to build the condos, do it right. Because obviously all this litigation over the past few years and the fact that you cannot get your development's insured because of past defects, obviously is going to have to take a while to overturn again. Thank you very. Much. Thank you. All right. We got to everyone just in about an hour. Thank you all for that. It is now time for questions. And once again, colleagues, let's make sure we focus on questions and we'll have comments afterwards. Councilwoman Ortega. Thank you, Mr. President. I've got several questions. And if other people well, we we have a list here of people waiting. So let me just first ask our city attorney in the drafting of this and the dialog with different parties, were insurance companies part of the folks that were talked to? And did they if so, did they believe that this language would make any change in their reduction of costs of insurance on for sale units or condos? The answer is yes. Among the many people we talked to and and pick their brains were representatives of the insurance industry who basically explained to us kind of the reality of a kind of a chicken and egg problem you've got here, where the problem with the lack of availability and affordability of insurance is driven by claims history in the past under prior law, and it reaches a certain critical mass where certain insurance underwriters choose to leave the market, are priced their products at a very high level. The problem, as we talked about it in committee, is that there has to almost be a new paradigm established on the ground where you've got new construction occurring , where condos would again resume to be built. And then you'd have to see what the new claims history is related to them and how these laws play out over time in terms of whether or not it's going to have an effect on the overall availability and price of their products there. To get to this specific thing, I think you're asking. No, there is no definite answer that this bill solves the problem in terms of the lack of availability or affordability of insurance. This bill, the feedback we get in the way we've gotten is may help, may help, but no absolute assurance that it's a silver bullet. And as some of the speakers acknowledged, it probably has to be a combination of some local action as well as state action over time. So there is no definitive answer to that in terms of saying that this this will solve the issue and cause the floodgates to open in terms of new construction from their perspective. So another question, in looking at the drafting of the language, did the issue of trained workforce come up as part of the sort of the big picture equation because. I think that plays a big role. There's so much construction going on in this city that we've had. People reach out to my office where there are builders on a particular project that are being bringing people in from other countries who aren't necessarily the skilled workers that are needed. And, you know, I don't know whether that plays a huge role in whether those folks know exactly what they're doing, that they can read the plans that , you know, they've got the math skills to measure things adequately, etc., etc.. So did that come up at all in the conversations? The availability of trained workforce was never mentioned to us by anybody as part of the problem. There is obviously substantial workforces out there building things. A lot of things are getting built. They just don't happen to be condos. But but no. It really has been a part of the conversation to date or anything. We've heard from anybody as being part part of the explanation for why there may be a lack of condo construction. David, one other question about the role of our inspectors. So I don't know today if our inspectors are cross-trained to be able to go out and inspect roofing and, you know, or if we have specific trained skills for the different sectors of the construction industry so that when they are doing the inspections, they're not all cross-trained and just know a little bit about each category versus people who are experts in their in their own field. And I'm just so so that's one question. What are what is the level of of our inspectors? And then tied to that is if we're not doing adequate inspections and we're approving work that is found to be not correctly constructed. What is our liability? So Sky Stewart Mayors Office, I'll start with the beginning of that and happy to get you more specific information. Our inspectors over the last number of years have had the ability to be cross-trained. I can't tell you on the ground if everyone is out there doing various inspections. We do have a system set up where they could do that. But our inspectors are professionals who are trained and certify work to be code compliant. So I can't say that I believe that there's a case out there where somebody's a certifying work that is not code compliant. It's their job to certify that work as code compliant or two sided if it's not and have that work corrected. As far as liability, I'm going to turn that over to David. The the liability issue from our perspective. On any regulatory matter, governments enjoy a high degree of governmental immunity in terms of our we pass laws, we do inspections, we do the best we can. But given the color of Governmental Immunity, Act explicitly says that failure to adequately inspect is not a cause of action for a claim against the government itself. That's why all of this is fought out between the private parties versus the homebuyers and the home builders and the design professionals and so forth. You know, obviously, even though that's the pat answer from a liability standpoint, the city strives to take seriously the laws that pass passes and staff up and do adequate inspections . But certainly some of the stories that are told by folks who've had claim situations in the past have to do with potentially a failure by both in both the construction site and the inspection side. Those things in the imperfect world we live in obviously happen at some time and on some occasions and are actionable when they do , but they don't tend to be actionable back against the government for failure to adequately inspect. One of the things that you all of which have provided budgetary support for. We are trying to staff up more. Our building inspections office overall because of the sheer level of activity in town. And we're probably going to be approaching record levels in terms of the commitment of resources to that. But but yes, it is definitely imperfect, but when it is, the claims tend to be fought out between the private parties. Mr. President, you want to just put me at the end because I do have other questions and I know my colleagues do as well. Okay. Thank you. Councilman, new. Question, dave broadwell as well. David, i heard concerns tonight about problems, defects that are related to violation of the building code or the manufacturer's recommendations or just really a general lack of quality workmanship. You know, there's nothing in our ordinance that prevents an actionable action against the correction of any of that. In our audience at all, is that correct? Yeah, that that's correct. And I try to emphasize that point in my introductory remarks. There are basic avenues to redress where you where you have a defect resulting from a CO deficiency or for some other reason, where you have a defect that causes damage and is traceable to negligence or traceable to some fraudulent misrepresentation by the builder or the seller of the unit. Though those statutory causes of action remain fully actionable, notwithstanding anything in this ordinance. So, you know, and I would say as your attorney, we we we couldn't give any different answer than that. The city doesn't have to have the ability to take away the basic redress that plaintiffs are guaranteed under state law. And so the state law applies. We have minimized any any protection from the homeowner by state law. In my opinion, this ordinance does not. Thank you. Thank you. Thank you, Councilman. New Councilman Espinosa. And Ashley Douglas. I don't know if you want to come up, but when you came up, you mentioned three specific situations an unstable patio, inadequately rated firewalls and improper grading. I don't know the specifics on the unstable patio, but I can tell you that inadequately rated firewalls is a code defect, meaning is a code non code compliant situation. Now, does our new ordinance, as I understand it, prevent that from happening? No. Does it make it against the law? Technically it already is because it's non-compliant. And so the time to address that is during the construction when that's spotted, because you're not going to spot it after the fact. Now, you could spot that, something like that after the fact, but then it's still not defective because you don't know until you have an incident whether it's going to breach or fail or whatnot. You may have a reasonable reason to fear, and that's one of these sort of caveats that you guys can litigate later. But an improper grading is a code, is noncompliant is a code. So there's certain things that if you have water intrusion from, you know, you have the loss, this law protects you. You know, that's that's the whole point. So I guess I won't ask the specifics on the unstable patio. It's just that it's not you cite these instances that are that are definite issues that you know and have ramifications. But if there's a loss, this law protects you. You know, it's not those were not code compliant installations. So the combination of both the non-compliant installation or workmanship and the loss would make you want to put you in the avenue for recovery in. So, yes. Now you get into the other aspects of this. But, Councilman. I just want to make sure you have a question. I'm just watching the minutes tick away, and I haven't heard a question yet, so I. Haven't gotten to speak all night. I know we're still in a good time. All right, then. No, I do have a question for both Pat Pacey and Mary, Latvia. So, yeah, I just but it's worth pointing because these things come across and they sound like they're they're they're issues, but they're not issues. So for Pat Pacey, the 22% for sale multifamily is that what is the breakdown of townhouses versus condos not present? Okay. That is a question I've asked and I would really like it answered. Not here. She's not here. She is not here. Mary, Latvia. Lithuania, Latvia. You had stated that rental owners can sue, but condo owners cannot. No, I didn't say rental. Well, yes, the developer can sue for construction defects in his rental property, and I cited the two buildings side by side. But the condo owners under this law. Have to go through arbitration. They don't have access to the courts. And how the developer rights that arbitration clause is can be very controlling and make it extremely difficult for the owners to to win an arbitration. Whereas under if they go to court under the existing laws, they have discovery, they have many more means available to them . How are how how are homeowners, especially in affordable. Housing, going to pay for all of this? Would arbitration have prevented you from finding resolution on the matters that were present in your property? Yeah, because through arbitration we wouldn't we were not allowed discovery in. It's in discovery. We found the emails from the architect and the window manufacturer outlining everything they were doing wrong and what. The developer did. He fired the architect. But that wasn't that couldn't be discovered forensically. If the developer chooses to write in the arbitration clause that discovery is not allowed, we will be bound by that. And he can do that through David. We repeat that nothing about this ordinance stipulates any particular format for arbitration. The principle of the ordinance is to say when people have bought into a community where arbitration is in the covenants, the city law supports the viability of that contract. Right now, the we've we've built in specific things to say, but city law supports arbitration clauses with some prophylactic claims, we say, but only if they have a neutral arbitrator who has to give full disclosure that follows the substantive law of construction defect claims and happens in Denver, Colorado. So so we've we've said we honor and support and reinforce those covenant clauses if they have that minimum level of protection. We don't talk about discovery. We don't talk about any other details in terms of what would have to be in the covenants for Denver law to reinforce and support it. So there may be a myriad of things that might be in the covenants that are that aren't addressed in our audience at all. But again, the basic principle is to say that if it's part of what you bought into and it's in it's hard wired in there, it can't be taken away later. Those are the terms and conditions under which claims in your community will be arbitrated. So I mean, that seems it seems sort of you know, you can't if I'm understanding you, right, David? Again, this goes back to the first part of this law. So basically, if if this if this if this non discovery component was there and they purchased under with those in place, at least they knew about that. And that's that's neither here nor there, in my understanding that that's I mean, it's certainly within their right. But it's the buyers. It's it's the buyer. It's it's in that contracting process that they are both made aware and assuming that that covenant or clause. That that's the principle underlying the ordinance said that that is correct. Now, let me just point out that and there's also a cross-reference to the uniform arbitration law, the Colorado State Statute, which does contemplate describe discovery and arbitration proceedings. Right. The witness is giving an example of where it was taken out in the arbitration clause in her particular covenants. But I'm as I'm saying, it's not inevitably that way. There may be discovery. There may not. It just depends upon the details of the particular covenants. Okay. And what developer wouldn't write that into his declaration in order. To protect himself seriously? Now, you know, but again, then you have to, as a buyer, have to choose. To be where. And you're talking about affordable housing. How many people read those documents and understand everything? So once again, the onus is put on the owner and I'm sorry, I why not build it right? Why not just. Build? And that's actually where I'm that's where I'm actually going, which is what is build it. Right? Is it is that code compliant or not. Build it right is to take extra time to ensure that when you mix the concrete it's not over mixed and. It to to meet code or meet some higher standard than code to me. Code. Well, to meet code because. That's all this law is saying is our expectations. For this meeting. I mean, you know, our windows met code, but no, they didn't. And we've now reviewed that. And so at the time our building was built, it was code. It was code. And then when the developer was warned, he not only fired the architect, he he, the window manufacturer, wouldn't provide a warranty. And we never knew about that until we got to discovery. Right. So, you know, I mean, we're pro-development. We're not anti-development. But I don't my my cost alone would have been $24,000. You go to affordable housing and you say to somebody, you need to come up with five grand to file this claim and then maybe they'll win something. But then you need to come up with 10,000 more to make up the difference. How many people in affordable housing are going to have an extra $15,000 laying around? So what happens? A third of them can't do it. The other two thirds have to pick up the slack. It they can't do it. First thing they do, they cut back on maintenance on the floor. Figure out a way to sort of not get into this sort of endless spiral of litigation. Yes, it goes on. So it was built right to begin with. If they would just. Write code compliant? Not necessarily. I don't think so. But how do you prove it? You know how we would approved. Ah, we had to inspect every window. They weren't. There was no thermal brake. Do you know how much money that cost to inspect a thousand windows? So it was. Speaking in the spiral. Councilman Espinosa, I just we appreciate the dialog between the two of you, but I think there's a back and forth versus do you have any more questions for Mr. Villa or for anyone else currently answering? Ms.. Livia and I thought I had one more for David, actually. Go ahead. I missed it. If it's in there, the the American Arbitration Association, is there is there a reason why we don't why we put why we put the arbitration language in a way that I mean, why we don't actually just say that it has to go through an independent third party rather than sort of let the two parties work it out. Well, there is the reference to the fact that the Denver law supports only the use of neutral arbitrators. But but if you're asking, you know, why the ordinance doesn't list a particular organization, for example, to provide the arbitration services. And in general, my recommendation as a city law, I shouldn't do that. Contracts, yes. And contract drafting. The parties may agree this is the place will go to get the arbitrators to use in the event that there's a dispute under the contract. But generally, my view is it's not proper in a law to name a particular private organization to provide a particular service. But but the concept of using a neutral arbitrator who must make full disclosure and if he's later found to have a conflict, can be basis for reversal of his award. Right. Those those key principles are built into the ordinance. I mean, we do review the code on a regular basis, as there may be an avenue there to sort of address that in a more fluid manner. Which code would that be? The building code, the one that basically this then rolls into as a standard. Of you, Bill, you will be reviewing all the all the that the new code adoptions early next year and there may be some additional part of this discussion you want to have at that time. Okay. Thanks. Thank you. Councilman Espinosa, Councilman Lopez. Thank you, Mr. President. Just to be clear on that last line of conversation, I just wanted to be clear. Mr. Brouwer, also in this process, just to be clear, who selects the arbitrator? Is it the developer alone? Do they set the rules or is it is it both parties? This ordinance doesn't dictate who selects the arbitrator. That, again, would be one of the myriad details that would be addressed in the covenants, the covenants. We'll talk about all kinds of details related to the arbitration process that aren't dictated by this ordinance. Again, the principle is if it was buyer beware and someone bought into a community that had an arbitration clause that we intend to support that as the contractual commitment made by the parties, whatever the details may be. So in science, in some in some examples, maybe in most examples, the neutral arbitrator will be selected by the defendant or by the by the builder. But you just don't know. It depends upon the details of the covenants in question. Would we have the right to dictate those terms, as in the audience that the arbitrator selected by both parties? Well, there's an enumerated list that I've summarized just a moment ago of. At. At Page nine of the bill that does what I described a moment ago that says the city supports the inviolability of these arbitration clauses as long as they contain these basic elements. If you wanted to add a longer list of things, the covenants would have to include to have the support of city law. Then that's where it would be. This represents some of the key concerns we've heard and also reflects a little bit Senate Bill 177, which passed the Senate earlier this year in terms of just not any arbitration clause, these basic elements of fairness. But we don't attempt to start getting into further micromanagement of the process beyond the elements you see listed here on page nine. Okay. And one final question, Mr. President. This is something that I you know, in looking at I mean, what I need to do in this committee work on the floor. But, you know, when when I was looking at the different things that were changing, one of the things that really stuck out was, I think this the notification and the idea that 51% of the tenants or owners would they would be the decision maker. They'd have to have 51% of those owners or tenants. Right. To decide whether to pursue any kind of legal remedies or not. Here's that here's the question I have. I know. Mr. Braswell, maybe you can you can help me think through this real quick or just like. Yes, the question I have is that 51% of what is it, 51% of all of the owners slash tenants? And there's a second part to my question. What if not everybody, what if not all of those tenants respond? Does that count against the 51%? The way the ordinance has drafted the consent would have to come from a majority of the unit owners. Tenants have nothing to do with their agreement. So these are the unit owners, not counting any units that are still in the ownership of the original declarant. So it's intended to be fair. Those have actually passed into private hands. You'd have to have majority consent of those folks. Now, one of the things I had a colloquy with one of your colleagues on on this key point, one thing that is more favorable to the homeowners associations in our proposal is this idea that you can take as much time as you want getting those sign offs and approvals from that number. There's no 30 day deadline. There's no 60 day deadline as there is in some of the other proposals we've heard that some of the other ordinances we've seen out there. So it's open ended in terms of how long it might take. But you affirmatively need written signoff from that majority in order to meet that threshold and go forward with a claim. Is there any kind of stipulation that goes beyond that or does it does it are we are we? I guess what I'm running into in my mind is the situation where not everybody who is a party to it or those unit owners actually responds that say the majority of them just don't respond. And you can't force somebody to say, Yeah, I want to participate. You've got my consent or not. Does that count against you? That's right. The non-response is tantamount to a no vote when a law is written like this. And there are other examples of laws that are written like this where you had to have to achieve a certain target percentage in order to go forward with fill in the blank. And that has to be manifested by written consent in a variety of contexts and other kinds of laws. Okay. And I guess and I'm sorry for having to go down this route. I just want to be clear. If there are multiple owners, let's say there are two owners per unit, it's those both of those owners individually as well. It depends upon how their ownership interest is characterized. But again, the denominator in the numerator are units. So you have so you have to have a certain number of the ownership of a certain number of units can consent. Right. And in some cases, depending upon if there's joint or mutual ownership, it may be both of them or and maybe one of them that would have to give that consent, depending upon how it's set up. Thank you. Thank you, Mr. Brown. Mr.. Mr. President, I know that there are other folks that are in the queue. I think my, my, my concern is the lack of participation probably by some folks. They just don't want to respond. And I think what that does is that. Makes it even harder for someone to get that consent. And anyway, I'll bring I'll bring that up later. I do have issue with that. Thank you, Councilman Catherine. Thank you, Mr. President. David. My understanding that the ordinance that we're proposing does not talk about right to repair. Is that correct? The state law does, however, does it not. That our ordinance, unlike most of the other municipal ordinances that have been adopted, does not address right to repair at all? We have there are a number of reasons, both policy and legal, that the mayor chose to not try to tackle that issue. But but to respond to the latter point of your comment. Not right to repair, but opportunity to repair is written into SADARA the Code of Construction Defect Action Action Reform Act in the sense that the very detailed like cookbook type procedures that define the notice of claim process under that statute. And at one point in that process, the builder can offer to repair, but the homeowners association is not compelled to to accept it or to allow the original builder back into the project to do the repairs. So there's a definite procedure for offering, but no obligation that the offer has to be accepted on the other side. Some of the other municipal ordinance ordinances that have tackled this subject kind of flip it a little bit from the standpoint of giving the builder the opportunity to offer and require, and the homeowners association would be required to allow them back in. But one of the main policy reasons this wasn't included, as we know, this is a very incendiary issue among the homeowners associations who, if they feel aggrieved at the defects that they believe were caused by the original builder, they may not necessarily want to deal with the original builder in terms of being forced by a law to require the original builder to come back in. So we knew it was very controversial from the homeowners perspective. But but also, as I said at the top, we're trying to stay away from altering or conflicting with any of the details in the notice of claim process and the state statute itself in terms of the the philosophical approach we're taking in our ordinance. But but it's an often asked question because everybody kind of knows that it's a part of the mix of the debate out there. That right to repair is seen by some as being kind of a key to all of this. But we just don't go there in our proposal. Thank you. One more question, which I was going to ask you, Mr. Coble, if he's left of any of you out there who are hoping that we pass this ordinance. I'm wondering if it passes, what specifically in this bill would cause you to go ahead and start building condominiums? Anybody out there? Please come to the. Bike and come to Michael. Thank you. The rest of you are cowards. Okay. Thank you. I guess. You say your name for the record again? Yeah. Aaron Foy was full of our builders, and. And I think by mine, the one thing that. That sticks in my mind. Is this majority vote. Before I became a homebuilder, I was an attorney for ten years and and did some defense of home homeowner cases against builders. And. And in my mind, if there's something wrong, it should. Get. Fixed. The issue is that relatively minor problems turn into major lawsuits, and issues that could get fixed are not allowed to be fixed. And I think having. A majority vote of all members of the association really. Slows down the process so that someone can come in and fix it. And in my mind, that helps us tremendously. And as I said earlier, we've got investors and. Banks who are scared to death of this. Stuff. And anything that we can give them to make them feel more comfortable helps us. Sure. And the other question again, anybody. If it's you, what what I'm wondering about so it's I guess everybody's guess that if this passes tomorrow, insurance rates don't drop. They may down the line. My guess is by the time they drop that the economy will have changed and will be tough to figure out why they dropped so today. So you're going to build a $200,000 condo with the higher insurance rates. What's the price of that condo? Is it 230? Is it 410? I mean, I'm trying to get an idea of what the scope is. I think. I think this helps in a few. Ways. One is is. As I said earlier, we're building a three story, you know, buildings in five story zoning. If we're able to build five story buildings or can convince investors that it makes sense to do that, we get more density. The relative cost of our land purchase goes down as well. We will still have to pay our insurance and it does increase the cost of building. But it's not that 200 to 410. It's these other things like land cost. It's things like like who we need to get money from. I can't go to a bank and get a get a 4%, four and a half percent construction loan. I need to go to two groups that are a little more risk. You're willing to take the risk, but they charge us more for their money. So all of that adds up and and makes it difficult to build that $200,000 or $230,000 condo. But if we're able to convince those groups that the risk isn't that great and these types of ordinance help us do that, then we're able to to get to that sort of price point. Okay. Thank you. Thank you, Mr. President. Thank you, Councilman Cashman and Councilman Flynn. Thank you, Mr. President. Is John Stovall still here? John. Okay. Thank you. I'm sorry I didn't recognize you, and I put you on a spot. Maybe you have the silver bullet. Because I think you said that you recognize that there is a need for some changes. I was wondering if you knew what they were. Oh, despite all of my glorious experience. No, ma'am, I do have it. Do you have any suggestion for changes that ought to be made in terms that aren't in this bill, in terms of affordable housing or accessible housing, whatever you want to call it? Probably the only answer in our current kind of market, which is so hot, is indeed public support to the builders, meaning subsidy, a subsidy of some sort to the builder to to get that 300,000 down to to 75 or to 75 down to to 50. You know, it isn't. And the degree of that is a matter of the ability of a community to step up for that. There are a fair number of subsidized projects in the rental business, but we see almost none of it in the ownership business. Okay. Thank you, David. I had thought that I came out of the committee meeting on this a few weeks back with a pretty good understanding of the neutral arbitrator provision. But I'm hearing something different tonight. And so maybe it was my misunderstanding, but the selection of a neutral arbitrator is not actually spelled out here. It's spelled out in state statute. We just require them to follow the state law on. Arbitration. And what I thought I heard you say tonight was that A the developer itself could select a neutral arbitrator. Is that because in my mind, that's not a neutral arbitrator? Well well, there's got to be some sort of selection process. Right. And, yes, that's possible. But the. But the way neutral is defined in the Uniform Arbitration Act means no affiliation and no predisposition with with the developer. Right. So so that selection could occur. And I guess the premise of your question, they inevitably then they're prejudiced toward the person that selected them. But the definition of neutrality means they cannot have any any intrinsic business interest or relationship with whoever has selected. Thank you. Between tonight and next week on final. I would like I'm going to look at the state statute a little more and maybe I maybe I'll send you some more e-mails over the weekend or something. It's a fact, and I'll be happy to send you that. What I was just quoting and. Okay. That would be a lot easier than some of your other questions. Thank you. I'm sorry that Miss P.C. left because I wanted to follow up. She wasn't able to finish her her presentation on her economic study. But we I think it's been granted. And David, I think you said in your presentation that this isn't the only factor that is causing the lack of construction of for sale, multi-family units , condos. What are some of the other factors? She definitely would have been the best one to ask. And you may others in the room, may, may, may, may have some perspectives on this also. But you all have probably heard and this is addressed in her extensive study that they published in the last year, that after the recession and the foreclosure crisis, there were major changes in terms of qualification standards for for for financing, for home financing. And that changes the market dynamics right there in terms of who's able to to afford and get into any kind of for sale product, including condo products as well. I think we all know that. And I think one of the speakers alluded to this is that is that, you know, undoubtedly there are overall market forces that drive up the cost of everything because we're so cool and so many people want to live here. Right. And so there are basic land economics that make things more expensive in Denver that are beyond the insurance issue. Right. And that and that affects everything in terms of the affordability issue. But but others have commented on some some more some some tangential things about the the level of college debt now, which certainly didn't exist in our generation. And that causes people perhaps to delay their home purchase decisions until a later time. And so there's a lot of theories out there about what what changes there have been in market forces, such that the kind of very, very, very low cost condos that were so common back around 1980, for example, even if condo supply resumes, it may not tend to be at that really low price point because it's a different world now. Condo projects tended to spread out more, and now we're more into an infill mode in intrinsically expensive locations, in urban environments and so forth. So a lot a lot of factors like that. So what we're. Doing is we are we're just taking a bucket of water out of a bathtub or out of a larger vessel or out of an ocean. We don't really know. And again, others may want to to add to kind of my recollection of some of the other things that have some credibility in terms of affecting the issue to me. Okay. I don't really know because of the hour. I really do want to explore this fully because this is a this is a very serious issue. And there are well-meaning people on both sides. I just want to. Sure, I understand that. So I'm going to try to go quickly and maybe keep answers short. But I'm I'm a little concerned about one of the clauses on page seven. I'm sorry, page nine. No, it's seven. I'm sorry. B, paragraph B, majority consent of unit owners required. And what I read in here is it says that the written consent from owners other than the declarant of units to which at least a majority of the total votes are allocated. Does that mean that in the covenants and this is based on something you said earlier, can the builder require 80%? Can the builder require more than 50% plus one? Can the builder require a 100% consent before a claim can be pursued under this? This is an example of where the ordinance itself is dictating the threshold and it is 50%. Okay. So the builder and under our ordinance a builder in Denver cannot in a covenants require 60% or supermajority. If 50% plus one signed on, then they can file a claim. I confess I haven't thought of that question or the answer is at least that through about whether someone then would by covenant require some greater level, that this ordinance just doesn't address that at all. This ordinance says the the policy decision of the Denver City Council is that future claims and future common interest communities should be preceded by majority consent. That you're imposing that as a requirement of city law. Right. But it does it doesn't prohibit or dictate one way or the other whether some other arrangement might be made by way of covenants. Okay. So you're saying that it is possible or it is not for a builder to require more than that? I'm just thrown by the at least a majority because we're setting a threshold, but not a ceiling. I guess it's possible again, the first time I thought of that question. Okay. This was confusion by the name of by someone who said that a builder had required maybe 80%. At one time. I thought, well, we're taking care of that. But when I saw this, at least I thought maybe we're not. But our intent clearly is that if you hit 51%, then it's valid, not higher. Okay. That is our intent. Correct? I'm sorry. Our intent is Sky is saying yes. I'll accept that. I'm a little disappointed that that both sides in this issue pushed back on the right to repair. We've gone over that extensively already. So I don't want to re re plow that ground. But I am disappointed in it because I see the end game here as being taking care of a problem. And it seems we're doing everything we can to stand in the way of taking care of a problem as Jason perched on her. He just left. He just left. Oh, Lord. Okay. I wanted to ask him, is there another realtor here still who can answer a question and follow up on? He had said that he can't he couldn't sell that firefighter's condo B, because the the association had filed a lawsuit. And I wanted to know, could that have been different if the association were merely in arbitration because it's still a claim? Does that does arbitration affect the financial ability or sale ability of of the condo as opposed to being in litigation? And if you can answer that, could you come to the. Microphone and come to Mike from. In my experience, it does exactly to the same degree as litigation. Okay. They simply will not look at financing. I will also tell you that in our project, during the litigation process and in the two years subsequent, we have been selling and financing units and we helped people find sources of portfolio loans, not hard loans. Right. Yeah, because it only affects some of the financing, not all of them. And then finally, regarding David, what you and I went over this on email, but I just wanted to get it out on the record. But regarding the provision, require majority consent of all unit owners in a case where a construction defect impacts only a few of the buildings I have a development in my district, for example, has about 30 separate buildings and where you might have a say, 500 units. I don't know the exact number, but if there were a defect that affected only three of those buildings at the low end and there's a drainage problem doesn't affect 27 of the buildings. There's obviously not much of an incentive for the owners, as Councilman Lopez was getting at, to sign and intend to sue. And since we're codifying the finding of the Velasco case that if there's an arbitration clause, that's what you must use, you can't remove that. Is there any way that this could be fashioned so that it's we're trying to steer people to arbitrate, to get to get settlements faster? Is there any way that this could be could consider an avenue that if you go to arbitration, then the board can do it? You don't need 51%. Would that change anything? Because I'm concerned about the ability of people who have a genuine issue in one or two buildings to be able to get consent from from 30 other buildings. Certainly, it could have been written differently, but the mayor's proposal is very consciously designed to say the 51% is important, whether it's arbitration or litigation. And in fact, the last comment you just heard proves the point is that both going into either route for resolving a construction defect claim has serious implications for the entire community. And so and so it's consciously written this way. And and that's the proposal. Okay. Mr. President, I think that's all I have right now. Thank you. Thank you, Mr. Flynn. We're back. The council members are taking Espinosa for round two. I just have one quick question about the majority, David or Sky, any up? Are there any requirements currently in state law that require a majority? Because it seems that some council members are alluding to the fact that that's a huge threshold. So I'm just curious, in current state law, are there any mandates now for a majority, a majority of owners? Well, the biggie is that in the Colorado Common Interest Ownership Act, to amend the original covenants requires at least 50% and up to 67% of unit owners to do an amendment to the covenants as basically a concept that's hardwired into the law. And it's the same thing where where you have to get you have to get to that number in order to achieve something very important. And and and, in fact, that's that's where a lot of the action has been in the courts and including some of the big reported decisions like the ISO is. That is where an owner has tried to put an arbitration provision in the original covenants. And once a number enough of the units are sold off, then folks rally to collect up enough votes to take out the original arbitration clause by hitting that number. Right. So, so, so that's the outstanding example in terms of where something like this already exists in the Colorado Common Interest Ownership Act. But as I said earlier, there are lots of other kinds of laws that require you to hit a number 2 to 2, to take some significant economic action on behalf of a larger group. Great. Okay. Thank you. So this is that's not new. Thank you. I want to take you back up. I have two questions. And the first one is a point that was raised by Liberty Lewis about holes in the code. She used an example about solar panels. I received something in writing that raised questions about, you know, misrepresentation, that there are certain kinds of environmental things included in a in the unit they're buying, but yet they find out later that those things were not included. So how do we address these issues where there are holes in the code? So, David, can you speak to that? Yes. And hopefully I can say this briefly. I was listening very carefully to her comments as well. And let me just say that the language that talks about the code setting a minimum minimum standard for safe and sound construction, it's it's very it's very surgically written to to say what it says. Therefore, any particular element. Feature. Component or other detail of an improvement or real property that is specifically regulated under the city codes and is constructed are installed in substantial compliance with the codes shall not be considered defective. Now, think about what that doesn't say. If it's something about the construction that is not a detail that is specifically regulated under the codes, then people can bring to bear on whatever argument they want about what the safe and sound standard should have been for something that's not regulated under the code. You understand? What I'm saying is that for things that are a gap, that aren't addressed in the codes this language doesn't speak to at all. So you make your argument that that is not addressed in the code. And here is externally from an industry standard or whatever. What would have been the safer way to do it or the safest way to do it? If it's not addressed in the code, it's whatever creatively the plaintiff wants to argue about what the proper standard of care should have been. Right. So the point being, this ordinance doesn't address that situation. Plaintiffs are free to make their claims. But if what they're claiming about is a detail that is specifically regulated under the code and it's installed in accordance with the code, then the builder can use that as a defense and avoid not having to pay on that claim . Okay. Let me move on. The point is, this was written to acknowledge there are some things that aren't regulated under the code that the parties will continue to argue about. Okay. So my next question is, I'd like you to clarify that. My hope is that the focus is to try to cure the problem. And I'm not sure if. A person needs to go to arbitration in order to have a problem cured. So can you help clarify the the recourse or the route, if you will, or correcting a problem without having to, you know, file a claim, without having to, you know, go through a lengthy legal process. And the short answer to that is, is provided by sadara by per by the state statute, which talks about the back and forth initial sharing of information to see if the parties can can amicably agree to fix something before having to proceed to either arbitration or litigation. That interplay is addressed in state law, and it's not disturbed in any way by this ordinance one way or the other. Okay. I have no further questions at this time, Mr. President. Thank you. Thank you. Councilwoman Ortega. Councilman Espinosa. David, is there language about the consequences of filing a claim that can be included as a provision under the required notice to the owners? Could you repeat the question? Is there language about about is there language about the consequences for filing a claim that can be included as a provision under the required notice to the owners. So the owners for filing. You know, to to go to the claim process. They are required to get notification 60 days prior. And we have a provision for you know, for. The provision is, where's that language? Now I lost it. The deck in the declaration. So there's a in the purchase agreement, we have a provision that has substantially, you know, takes the following form, and it's the actual language of what we expect to be articulated. But if there are these actual consequences to the potential that are that are potentially dangerous in the interim, in the claim process, can we make sure that that people that are voting on on whether or not to go to a claim are actually made aware of what that potentially does, how it might encumber their property in a way that prevents them from selling, prevents them from refinancing, prevents them through the duration of that process. Well, the contents of the notice that are enumerated on page six and seven of the bill, I think include the issue that you're address and councilman, particularly on page seven. Number six, number six, the one component of the notice would be until the claim defective construction work is repaired or replaced or until the construction defect claim has concluded, the market value of the affected units will be adversely affected and it's also addressed somewhat in Southern as well. So take a look at six and seven and see if they adequately encompass what you are concerned about. But when do those get put put in front of the the buyer, the owner? Where am I at? Right. This is a notice they have to receive before they they vote to give their assent. Okay. To to filing a claim. Sorry. Never mind. That answers the question. Okay. Good, Councilman. Thank you. Hey, Councilman Lopez, you're up. Mr. President, I think mine is more in line of a comment. All right, well, we will. We will. Get you. Go ahead and chime in. You'll be first to go. Any other questions? 811 CNN public hearing is now closed. Comments. Councilman Lopez, you're up. Thank you, Mr. President. I wanted to really explore that question. I know this is first reading and we wanted to have this on first reading so we can hear from folks and then try to iron out our issues or any other pending questions before the final vote. I my question remains this and I ran into it because we were trying to rename a street in West Denver and we were looking at as a lot of you know, we were successful in getting a majority of property owners along Morrison Road in favor of of changing it that says it's Chavez Boulevard. And although we got the majority over 64%, what the city required was 100% participation. So it was a no by an impossible yes. And having said that, we tried to track down every property owner we could and we couldn't find them. There were some folks we had to track down outside the country and we could never get their response. And because we could never get their response, we failed, even though we had 64% of the property owners along Morrison Road support it. So what I'm trying to figure out if that if that's similar and if that applies, that's skip the road and think about a, you know, a highrise with condos right now. Is that 51% requiring 100%, 100% participation in what happens if if some people just do not respond, whether they want to pursue, you know, move forward with the lawsuit or lawsuit or not or or remedies or not. And I don't have a problem with the 51% required. And my question is the 51% of what I and that is what's what's hanging fire for me. You know, having been a labor organizer for for seven years and I, I would I'm going to spill the beans here. I liked arbitration. Because I knew I knew that if as long as we played fair and as long as that arbitrator was neutral, being that, as long as we as long with the other party were okay with a neutral arbitrator. For the most part, we came out on top. As long as we played fair, as long as the the level the playing field was level and the rules were the same, those issues would be remedied. Now, I don't like seeing it tied up in courts. I don't like the idea of of somebody who is in a project or is in a set of units, has a unit that cannot sell it or refi because it's held up in court. That's ridiculous. I don't like that. Part of affordable housing is preventing folks from losing their homes and that's being able to utilize that capital to utilize whatever tools they can to stay above water. Our market fluctuates. Those of us who were council members during the recession, we saw that property values, I mean, not even as customers, but we all saw that our property property values tanked. And then now they're at all time highs. I don't want to hold this up for the sake of that that question. Here's what I will say. I am not in the spirit of 100%. I am not 100% all the way there unless I get those questions, unless I feel I know that that's not a yes by an impossible no. But I say that right now. I know by an impossible yes. So I am I'm okay with moving this forward. But I'm not 100% on my final vote. I'm not just saying that to build a suspense is because truly that is an issue for me. Knowing how hard it was to try to achieve that just on a street renaming in Denver where we had more than a simple majority. How hard will it be for unit owners to achieve that? And that 51% sure we're in the United States of America. That sounds great, right? Majority. All of us are elected 50% plus one. Right. But imagine if they set the bar and said, well, you had to have so much participation from your district. So that that's just words. I'm I'm mean. Yes. For tonight I'm a little I'm a I'd like to get to 100% by next time, but they don't want to see status quo. Thank you. Councilman Lopez, Councilman Espinosa. And this is a little bit of making the sausage, but I think that's really the entire point of this whole of this whole ordinance is that is that it has to be a higher threshold, a higher bar to to sort of obligate the entire property. And you really should have more than half of the owners involved in that decision, not just the minority share. And if you're not going to participate, yeah, you're a no vote until and but there's no time limit. They can keep going and keep going and keep going until they can get it, you know. And so that's really the intent here is that we don't get a firefighter sort of stuck in a situation where he's been encumbered by a handful of people that were on the board. But my actual back to the six and seven items I would like to see if it couldn't be put to me. It's not plain enough language back to the sort of who who's going to be reviewing this at the time it comes through. It says until the claim defective construction work is repaired or replace or until the construction defect claim is included concluded, the market value of the affected units will be adversely affected. It's really not a question. I guess it's comment to my colleagues, which is that that sort of implies that, okay, go fix the problem and now you can sell your unit. But no, the claim is the legal process and you're tied up until that's concluded, which could be settlement, it could be repair. And what is the conclusion? Angel You know, so I don't know if I got that, that language in a letter that informed me that this is something that the I mean, the the building is trying to do that you would know that you're actually encumbered. Yes. And item seven then sort of gets into, in addition, certain federal underwriting standards or regulations prevent refinancing or obtaining new loans on projects where construction defect is claimed. In addition, certain lenders as a matter of policy, they don't actually it sort of doesn't still doesn't get to the sort of way that we look at products, you know, when we go to the to the bank and ask for this that other clause. The other provision to me is very, very clear in how it delineates what the issue is that I think could could confuse somebody. And so where they think they might have an avenue to sort of correct and and move on if their if their building is tied up in an obligation. That said, I understand that the entire intent of the law is to not get to this point. So maybe I'm barking up the wrong tree. I just leave the language as it is and hope that we never get there. But if we do get there, sure, it would be nice that it was clear what the heck you were doing. Thanks. Thank you. Councilman Espinosa. Councilman Ortega. Thank you, Mr. President. I'm just thinking about some of the development that we have approved that have come before this body, where we're going to see multiple buildings built on sites like the Gates property, the Denver Post site. And the point that Councilman Flynn raised about the threshold being at 51%, where everybody in the entire complex that's part of the highway has to you have to have 51% of everybody, but it's only one building that's been affected. I'd like to explore some language that really hones in on that one building, as opposed to everybody in the development having to sign on. You know, it ties up the other buildings and all of that stuff by requiring everybody else to weigh in when the reality is it's only affecting one building on the whole site. So I'd like to explore that with our city attorney between now and bringing the bill back for final reading so that we can, you know, try to correct that problem. We all know this is something that we've been needing to address for a long time. We all would like to see for sale units. I don't know that that means we're going to see affordable. For sale units. I remember when we took a trip to Vancouver a number of years ago with the Denver Partnership and, you know, we all came back, everybody was excited about density. And, you know, if we get density, we're going to see affordability. And that's not what we've been seeing in this city. We're seeing density, but they're not affordable even when we were building condos. And we know that, you know, apartment buildings are very costly now. So, I mean, we are putting money into addressing affordability as a city. And, you know, it's a partnership between the city and our development community to address some of these challenges we have with, you know, part of our workforce that can't afford to live in the city and they have to move to the suburbs. At some point, you know, they're going to realize they can find the same kind of jobs, especially for so many that are working in the service industry where they live, as opposed to having to come into the city. And at some point we're going to be struggle struggling, trying to ensure that we've got workers for our service industry. You know, so I mean, there's some challenges that that I think are inherent that we're we're trying to solve here. But in general, I think the need to get to a place where we can build for sale units is very important. I'm glad my colleague, Councilman Cashman, asked, you know, one of the builders if this language is actually going to make a difference in whether you all will start building. And, you know, I know the insurance plays a role in that and we don't know exactly what's going to happen with that. And, you know, my hope is that we don't go through all of this and we're like Lakewood and some of the other communities where there's still no for sale units being built. But I'm I'm supportive of moving this forward on first reading. Really want to explore the threshold issue, particularly where we have multiple buildings on a complex that, you know, just ties everybody up. So I'll stop at that. Thank you. Thank you. Councilman Ortega. Councilman Flynn. Thank you, Mr. President. This is this is an issue that I've read almost everything that has come our way from both sides. And and we know statistically, we know what the statistic shows about the market in Denver. I'd like to see some information about markets elsewhere in other cities to see if they're suffering the same dearth of condo construction as we are. But there's just something about this common interest community that seems to be attracting all this litigation that's not happening with single family homes or with other communities that are being built by the same builders. And just as there are, there are examples of attorneys who are not ambulance chasers. There are examples of builders who are good quality builders. And so when I hear Build It Right the first time, I know that that's that sounds really good. But I do know that there are builders in this market who do build it right. There are good quality builders in this market. They'll build it right tomorrow. They'll build it right next year. They build it right last year. But they're not building right now. Whether this moves the needle or not is something we can't know. It's I feel a little bit like I'm throwing darts in a foggy in a smoky bar room, you know, am I going to hit the board? Is this the right thing? What other factors are at play? But I do know that as we've talked about financing and down payment requirements having been strengthened since the recession, well, that applies to all mortgages. That doesn't just apply to condos. So why are we not seeing the condos being built? Those restrictions apply across the market. So there is something going on with common interest communities. Can this solve it? A lot of people think that it can that it can move the needle. It was very hard for me to come down on where to where to vote tonight, let alone next week. But just this afternoon, after digesting everything, when it occurred to me that we do have builders that will build it right and they're not building. So we need to find a way that helps clear the way to get shovels in the ground and start increasing our for sale supply of multi-family housing. So I'll support this tonight and hope to look more into the the arbitration issue before the final vote next week. Thank you. Thank you. Councilman Flynn. Councilman Kasich. Thank you, Mr. President. I want to frame this issue, I think, in a. Or a way that maybe some have. I think the goal of tonight is about ensuring that individuals still have redress when there are wrongs in their properties. But it's creating more certainty and more clarity on the process so that the outcomes are a little more predictable. This entire realm of policy, as Councilman Cashman and I were talking about last week, is all about managing expectations and fears of risk. Right. That's what insurers are doing when they set rates. That's what bankers are doing when they set insurance rates. That's what contractors are doing when they bid on jobs. And so we can't control this directly through public policy. We are just trying to create an environment where people feel like they are better at predicting risk and therefore don't overcharge. That's that's the goal. Well, no one's ever going to get a satisfactory answer on how much calculation of risk is going to change the game. So we are legislating in an uncertain environment, but it's one that I agree is necessary. After spending some time talking over several years ago, before the legislative process began with both sides, including mostly the attorneys and insurers, frankly, to cut through what sometimes is an overstated issue on both sides. So so that's my frame for what I think we're doing tonight and what we're aiming to do. And then the question is, are we doing it? So a couple of things in the language that I think are really important to point out. So first of all, where harms occur, there is redress here. And in particular, you know, folks have raised different concerns. But, you know, it's my understanding, you know, as as as a as a non-practicing attorney. But there's there is a strong case law regarding harm. And it doesn't just mean, you know, that that, you know, you had a ton of property damage because a window leaked and you had to replace your carpeting. You know, the loss of value of your unit is a pretty, you know, clear area where you could argue harm if you're if your unit value is reduced, for example , or your enjoyment, if you if you could never use your patio for some reason because it was flooded, those are all things that the common law generally recognizes as harm. So so where there is harm, there is redress in this in this approach. And that's really important. The next thing that I think is really important is that there is a provision that clearly states that if any arbitrator fails to follow the lives of Colorado with regard to construction defects, there's a redress in court. So I think that's one thing that we haven't talked about enough up here, which is that this does not close your door to court. If you have an arbitrator doesn't follow the law as they're required to do, then you can go to court and you should go to court. And that path is there. And that's important for me. If it were not there, I would have maybe different feelings about the balance between these issues. Folks have talked about the right to cure. I would not have supported this ordinance if it had included a provision that allowed a builder to repair something without negotiating. Right. That's that's not appropriate. What the current state law provides is a period of time for that discussion to occur. What arbitration creates is a framework for that discussion to occur. And that, in my mind, is important in retrieving the balance that we're looking for, saying that someone could come in and repair your unit even if you didn't agree that that was the needed repair. That's not a path I would have felt comfortable with. So I appreciate some of the restraint that the mayor has shown in this approach that I do think is quite balanced. The last comment I want to make is a little bit of a of a of an in spite of which is that I do not believe that as long as we have buyers willing to pay $500,000 for condos, that the market is magically going to produce 250 or $300,000 condos in Denver. So so I think that demand is going to continue to determine pricing. But what I do know is that we have a policy framework in Denver that requires affordability in projects of 30 units or more. I'm not thrilled that some of the folks who asked me to vote for this ordinance tonight were up there asking us not to vote on inclusionary housing. And to me to link this argument to affordability while opposing that policy is is one that I'm not happy about. But just look at the prior vote. Just because I disagree with folks on one issue does not mean I cannot agree with them where they have the merits on their side. So I would not be able to support this ordinance if we did not have a framework for affordability that underlies it. So today, that framework is an inclusionary housing ordinance. We've proposed in the future that the framework would be an impact fee. I hope and I expect that the folks who've asked us to support this. Porting the new framework, should we propose one for affordability? And that means affordability to folks, you know, at below 80% of median income. That's not something this market is going to produce with or without this ordinance. And so because we have a policy framework, though, that says when these projects are built, by definition, they'll be building affordability. I feel comfortable saying that it's in our best interests to produce more condos in Denver because I know there will be affordability. So with that, I will be supporting it tonight. I want to just signal to some of my colleagues that I'm you know, there's a few tiny details that folks have brought up more clearly delineating that both parties have input into the arbitration selection process. I myself didn't go back and reference the state law in that clearly enough until tonight. So there's a few areas I would be open to. Not very many, but little tweaks like that that if they occur between first and second reading, I would be open to considering. But fundamentally, I think this ordinance strikes the right balance for the reasons I've described, and I will be supporting it and urge my colleagues to do the same. Thank you. Thank you. Councilwoman Kenney. Councilman Cashman. Thank you, Mr. President. I'm with my friend, Councilman Lopez. I'm not there yet on a yes vote for next week. I think there's enough here that that I'll be looking to move it along tonight. We're doing two things right. I think I think Mr. Broadwell and the the administration has done a pretty commendable job at crafting something that may move our friends and the development community in a more positive direction towards building the condominiums that we need. I'm not at all sure that it's fairly balanced in assuring homebuyers that they've got the full redress that they need. One thing I'd like to see, and I think Councilwoman Kinney's you alluded to it, but I'd love to see something in the language of arbitration that prevents some of the more onerous conditions that that we've heard have been written in to arbitration provisions. So with that said, like I say, I'll support moving it forward. Thank you, Councilman Cashman. Councilman, that's another your backup. Yeah. I mean, I am curious on what Councilwoman Ortega brought up on the buildings, because oftentimes certain projects will have different contractors working on different phases, different buildings. But I don't know how that works. Will it relative to banks, because they might look at it as a whole one project anyway. So if one building is tied up. So I'd look to you guys for some clarity on that. I would also encourage us to maybe include some language that that the conclusion of the claim process be sent to all owners via certified means so that the you know, it doesn't become a problem for the buyer, for for the owner when they're moving on to something to have to track down a document that they really their banks are going to their lenders and stuff are going to need. And then I just wanted to say that, you know, there was a mention about affordable housing and accessible, primarily accessible housing. If we can get some public dollars into any one of those condo projects, that would hopefully get built by that virtue of that investment. Those are then have to be visible and accessible units per the fair housing requirements. And so this is a heck of a lot easier sort of product type to get accessible units built into than these sort of townhome forms. You know, because these are ground forming, these are accessed by elevators there. And so I think it's actually an opportunity to actually get more accessible units easier, especially if we start to finance them with public money things. Thank you, Councilman Espinosa. Any other comments? 811 CNN Madam Secretary, Roll Call Lopez. I knew Ortega Sussman. Black Eye Clark. Espinosa. Flynn, I Gilmore. I Cashman. I can each. Hi, Mr. President. Hi, Madam Secretary. Please cast Vali Nasr. Results 12 Eyes. 12 Eyes 11 has been published and final consideration will be Monday, November 23rd. One pre German announcement Monday, December 14th will be a required public hearing on Council Bill 827, changing the zoning classification for 510 East 51st for 80 East for East 51st Avenue 4855 Perot Street 4871. Pearl Street 4877 Pearl Street. Any protests against Council Bill 827 must be filed with the council offices no later than Monday, December 7th. Same. The business before this body. We are adjourned. Denver eight TV. Your city. Your source.