A legislative task force began studying homeowner’s rights in metro districts on Dec. 5, 2023. The task force will issue a report to the state legislature on June 15. Coloradans for Metro District Reform is a volunteer group researching metro district abuse and advocating for protective reform. CMDR has been covering and responding to the Task Force’s public sessions. Task Force hearings are public, recorded and may be accessed at https://engagedora.org/metropolitan-district-homeowners-rights-task-force.
Those living in metro districts also have an opportunity to fill out a short survey regarding their experiences at the same site.
The task force was created last year and has 11 members chosen by the legislators and the governor. Although labeled a “homeowners rights” task force, CMDR believes its membership is heavily skewed toward the developer industry. CMDR stated that three of the 11 task force members express positions reflecting resident interests. Two legislators serve on the Task Force (Representative Jennifer Parenti and Senator Julie Gonzales) as well as a county commissioner, five attorneys and a developer.
The next session is Feb. 19. So far, the Task Force has received a basic orientation on metro districts and then addressed topics including transparency, foreclosures, and interaction with HOAs. Future sessions will encompass governance and finances.
Speakers in each of the first three sessions have represented the developer industry. In the latest session, two task force members and Rep. Parenti observed that homeowner perspectives and interests had not yet been presented to the Task Force. Though CMDR has not presented to the Task Force, it has published responses here: https://metrodistrictreform.org/metro-district-task-force-1
Development industry interests have emphasized that metro districts make housing more affordable. CMDR noted that no evidence has been presented to substantiate this claim. CMDR posits that metro districts make housing less affordable in practice and, they explain, that there is evidence many residents are actually paying twice for the cost of infrastructure in metro districts, that the cost of housing is actually higher in metro districts, and that the amount of debt and extended interest payments increase the cost of metro district housing even more.
CMDR does agree with the development industry’s position that there needs to be more transparency in metro districts. They observe however, that every effort CMDR has made to advance legislation requiring meaningful transparency has been opposed by the industry. CMDR sent the Task Force a one-page disclosure of financial information; similar disclosures have been proposed to legislators and state agencies during the past three years. No action has been taken on CMDR’s proposal. CMDR has also recommended including disclosures with the MLS listing and other points of contact when residents first start looking at homes in metro districts.
Instead, CMDR reports, the industry has advanced extremely weak transparency measures which are superficial and pay lip service to the effort. For example, CMDR explained, two recent transparency measures enacted by the legislature (at the request of the developer industry) included disclosing the metro district website in closing documents (the 11th hour of the transaction) and having a meeting once a year to answer questions about metro districts.
During the session on foreclosures and interaction with HOAs, one industry presenter acknowledged that metro districts have the power to initiate foreclosure proceedings against homeowners who fail to pay district fees and taxes. CMDR pointed out in their response that metro district bond investors also have these foreclosure-initiating powers. CMDR further explained that bond prospectuses explain in detail how metro district bond investors can protect their investment by foreclosing on homes. CMDR noted this is a significant concession by the industry since one of the benefits the industry mistakenly claims for metro districts is that the investors, not the homeowners, bear the risk of failure.
When discussing metro districts serving HOA functions, one task force member noted that HOA homeowner protections do not apply to metro districts. CMDR agreed, noting developers should not be able to bypass HOA checks and balances by having metro districts perform HOA functions.
We will report on each of the upcoming meetings.
Fayre L. Ruszczyk compiled this report with members of the Coloradans for Metro District Reform. Ruszczyk lives in Jefferson County.