Denver’s Right of First Refusal Puts Government in the Middle of Private Property Sales

By Cory Gaines | Commentary, Colorado Accountability Project

I saw a post by a reader on Twitter recently. It shows how Denver is proposing to implement a 2024 law passed by the state legislature.

Let’s start with the 2024 bill. It’s linked first below. I took a screenshot of the bill’s fiscal note summary and attached those as screenshots 1 and 2.

As you can see from the highlight in screenshot 2, it just wouldn’t be Colorado if we didn’t throw a bone or two to nonprofits.

In summary, the bill allows local governments (for buildings of a certain size depending on whether your municipality qualifies as urban or rural/resort) either the right to purchase a property if it’s already listed as affordable housing for “an economically or substantially identical offer to another offer that a seller receives” — or to have the right to tender the first offer for any other type of property.

The second link below is to Denver’s own plan.

Denver’s story goes back to 2015, when the city approved what it called a “thoughtful balance of property tax revenue and a one-time fee on new development” which went into a fund to help “preserve” affordable housing.

If you want to see more detail on how that money is used, see screenshot 3 attached.

Fast forward to now and Denver is boasting about their success. Quoting from the second link:

“Between 2019 and 2025, we have helped preserve 1,443 affordable units citywide, thanks to the Preservation Ordinance.”

Perhaps having gotten a taste for it, Denver seems inclined now to expand their ROFR and ROFO programs via a 2026 city ordinance. I took a screenshot of their tables and attach them as 4a-4c. Any updates to current policy are in red at the far right.

I’ll leave it to you to scour the pictures for changes, but I can summarize things decently and mention a few standouts here.

Broadly the changes fall under the rubric of extending current deadlines to favor the city purchasing the property. This is on top of Denver’s existing ordinance already being stricter than the state’s created in the 2024 bill. Pictures 4a and 4b, when you read the red text illustrate this well.

Another big, noteworthy change is the entire row shown in 4b. As opposed to only some market-rate buildings qualifying for a ROFO, they all do under the proposed ordinance (this is on top of, again, more favorable timelines and terms for the city).

Lastly, something interesting. Recall that both the state law and Denver’s existing ordinance allow the government the right to first refusal (i.e. I have to give you a NO before you can sell to someone else) on existing affordable housing.

Return to 4a and note that it alludes to a “Designated Preservation Partner” in the new ordinance. This same term pops up in 4b, giving a hint at what this partner will be doing.

Further down in Denver’s presentation, we see the term again with more flesh on its bones this time; this is where the picture becomes clearer. See screenshot 5 attached.

In brief, if you own a property currently listed as affordable housing, not only do you have to wait for the city to pass, if Denver’s new ordinance passes, you’d have to wait for one of the city’s preferred partners to also say no on a sale.

Think about this for a second and put it in terms closer to home. Let’s say that I told you you couldn’t sell your home (under certain conditions) unless I said that I didn’t want it. Oh, and on top of that, all my friends, the people I deem worthy (not you) also get a shot.

I would bet you my lunch that this turns into another tightening of the government/NGO/nonprofit relationship. After all, the city government gets to confer this special right of first refusal on the folks they deem to be worthy.

One last nibble, this one stretches all the way back to the original 2024 state law. While all this goes on, you cannot end leases with any of your tenants. That is, you cannot begin any “no cause” evictions.

This puts city government square in the middle of private transactions and is, quite simply, a violation of one’s property rights.

If the city wanted to deter people from building more housing that might be labeled as affordable, I can’t think of a better way to do it than to make them subject to the whim of the city government and its friends, or to make it so that I can prepare for some change to my property by legally ending the relationship with my current tenants.

I sure hope the city keeps all that affordable housing they have now. I don’t foresee a spike in new affordable construction.

https://leg.colorado.gov/bills/hb24-1175

https://denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Department-of-Housing-Stability/Partner-Resources/Dedicated-Affordable-Housing-Fund

READ THE FULL COMMENTARY AT COLORADO ACCOUNTABILITY PROJECT

Editor’s note: Opinions expressed in commentary pieces are those of the author and do not necessarily reflect the opinions of the management of the Rocky Mountain Voice, but even so we support the constitutional right of the author to express those opinions.