Making the Connection: Construction Defects Reform and Health

Lunchtime at CHI often finds the office Millennials swapping stories about annoying landlords, messy roommates or frustrating searches for starter homes. But even as we bond over the trials and tribulations of city living, we recognize how lucky we are to be able to afford housing as prices keep heading higher in metro Denver.

Sometimes our conversations turn to related news from the state capitol. This year, CHI is taking a new approach to the legislative session. Each staff member selected a topic area, and has been tracking bills related to that topic. I’m following housing bills, particularly measures aimed at construction defects reform.

This might seem far out of CHI’s wheelhouse. But we know that housing has a big influence on health.

People living in safe, stable housing have privacy and security, which benefit physical and mental well-being. People living in poor housing conditions face a higher risk of infectious and chronic disease and injuries. Their children may face extra obstacles. Individuals with lower incomes are most likely to live in unhealthy, overcrowded, or unsafe homes.

Homes classified as having severe housing problems demonstrate at least one of these conditions: overcrowding; lack of complete kitchen or plumbing facilities; and a price that is more than half of the owner’s income. There’s a wide range of severe housing problems across Colorado, from eight percent in Yuma and Kit Carson counties to 23 percent in Garfield and San Miguel counties.

Many bills relate to housing this session.

One hot topic is construction defects reform, which addresses problems with design, workmanship or dangerous materials. Currently, homeowners can sue condominium developers for defects in their homes within two years of discovering damage or six years of building completion.

Reform supporters say stronger protections for developers will encourage them to build more entry-level condos and townhomes. More development will create more affordable options. They believe existing laws side too strongly with homeowners and discourage new building, contributing to the shortage of available houses.

Opponents of construction defects reform say that adding additional protections that favor developers don’t address the root of Colorado’s affordable housing shortage. The problem isn’t availability, but affordability for people of all incomes, and they don’t see construction defects reform as the solution.

It’s an important debate that has captured the attention of state legislators from both sides of the aisle for years.

Here are a few of the construction defects bills we’ve been following:

House Bill 1279 - Construction Defect Actions Notice Vote Approval

What the bill proposes: Requires a majority of condo owners to vote on taking legal action against developers for construction defects, rather than a vote by the homeowners’ association only. Requires homeowners’ associations to hold a meeting presenting relevant facts and arguments where the developer can make an offer to remedy the defect.

Sponsors: Reps. Alex Garnett (D) and Lori Saine (R), Sens. Lucia Guzman (D) and Jack Tate (R)

What’s happened? The bill passed its third reading in the House on April 24 by a 64-0 margin, and moves to the Senate with overwhelming support from more than 50 House co-sponsors. With backing from both sides of the aisle, it is an example of how quickly an effective compromise bill can be passed, even in a divided legislature. Just a few weeks ago, few people would have guessed that construction defects reform would be the session’s big bipartisan success story – but with talks crumbling around transportation funding and the Hospital Provider Fee, this bill represents a bright spot for the legislature. 

Senate Bill 45 - Construction Defect Claim Allocation of Defense Costs

What the bill proposes: Distributes liability insurance costs among general contractors to subcontractors, rather than just the contractor. Bill supporters believe this will provide more predictable insurance costs, lower those costs, and increase the profit margins for developers. Defendants need to agree how costs and fees in a lawsuit will be covered to inform understanding of risk.  

Sponsors: Sens. Angela Williams (D) and Kevin J. Grantham (R), Reps. Cole Wist (R) and Crisanta Duran (D)

What’s happened? The bill was introduced early in the session with bipartisan support. It was recommended to the Senate Appropriations Committee in early February, but has been waiting ever since for its next hearing.

Senate Bill 156 - Homeowners' Association Construction Defect Lawsuit Approval Timelines

What the bill proposes: Allows a homeowners association to require arbitration before a lawsuit filed by an individual goes to court, and requires that all members of a homeowners association receive notification of a pending lawsuit and support it before it can be filed.

Sponsors: Sen. Owen Hill (R), Reps. Lori Saine (R) and Cole Wist (R)

What’s happened? The bill passed the Senate. But without bipartisan support, the House Committee on State, Veterans, & Military Affairs voted against it unanimously.

Construction defects reform is just one area of housing policy that impacts opportunities for Coloradans to live in a healthy, safe home.

Organizations such as the Colorado Center on Law and Policy, the Denver Metro Chamber of Commerce and Housing Colorado are paying close attention to policies that will help or hurt housing options. Local groups such as Colorado Coalition for the Homeless are implementing strategies that address housing needs.

For more examples of evidence-based policies and programs, check out What Works for Health: Housing. To learn more about housing and health, see Allie Morgan’s Home is Where Your Health Is, part of CHI’s Better by Design series on the built environment.

As I continue my work on the Colorado Regional Health Connectors Program and think about the factors that keep us healthy, I’ll be grateful the next time I have to text my landlord about my leaky sink. Many Coloradans face much more serious issues with their homes.

Rebecca Rapport joined the Colorado Health Institute in 2016 as a Program Manager for the State Innovation Model (SIM) Extension Service.