Less than 500 of the estimated 25,000 multiunit residential rental properties in the City of Denver have gotten a new city license that’s required by Jan. 1, according to the City and County of Denver Department of Excise and Licenses.

But officials expect a flurry of applications in the next two months, which also requires an inspection. 

Denver’s City Council unanimously passed the “Healthy Residential Rentals for All” law on May 3, 2021. The decision was made to help city officials track housing in Denver and better communicate with tenants and landlords. The law was opposed by many landlords and local apartment associations.

“If you are a slumlord, it’s about to get much more difficult to operate in the Mile High City,” Spokesman Eric Escudero wrote in an email to The Denver Gazette.

Changes have been made to the licensing process to make it easier for applicants, according to a news release. Those changes include the ability for married couples to enter both individual names, removing the required documents for possession of the property and removing identification requirements for the on-site manager of rental properties.

Applying early pays off, as there’s a 50% discount on application fees for those who apply before the deadline Jan. 1. Fees can range from $50 to $500 depending on the amount of units on the property.

Residential rental licenses are required to be renewed every four years, with a mandatory inspection. There are 20 private inspectors available now, according to the release.

“We knew implementing the largest expansion of required business licensing in Denver history was not going to be easy,” said Denver Department of Excise and Licenses Executive Director Molly Duplechian in the release. “It’s important that we continue to look for ways to make the licensing process less complicated, so more landlords can demonstrate their properties meet minimal housing standards and get the required license.

“If you are a landlord or property manager, there is no reason for you to further delay starting the licensing process with the deadline approaching soon.”

Residential rental licenses for single-unit properties are already being accepted but are not required until Jan. 1, 2024.

As of Nov. 4, there have been 604 residential rental licenses issued, 344 are multi-unit licenses, and 787 applications were received. The city estimates there are 25,000 multiunit residential rental properties and 50,000 residential rental properties that need a license.

Escudero said they’ve seen a surge in applications in the last two weeks and expect to see that trend continue until the end of January.

Starting in the new year, landlords and property managers will be given citations and fines for any unlicensed properties. Escudero said the goal of this new license is to aid in removing “slumlords” and maintain minimal standards for rental properties.

It will also help lawmakers track available rental properties, something that is currently just an estimate. That could help in improving affordable housing options.

Cornerstone Apartment Services Chief Executive Officer Charlie Hogan said there is a demand in multi-family residential properties in Denver due to the residential housing market and the population growth of the city. He compared the process of applying for the license to applying for a liquor license in Denver.

“I think [something] this program will help do is probably help them identify what they actually have as far as the amount of units within the city but also guide them for future development opportunities and how many units should they bring in on an annual basis or allow to create some scarcity and competition,” Hogan said.

Any landlord guilty of operating illegally, aka without a license, could be subject to an administrative citation from the city. The first is $150, according to Escudero. If they don’t get into compliance, the next fine is $500, followed by continued fines of $999.

“Fines and citations are considered the city’s last resort after multiple efforts to contact a business or individual not in compliance with the rules for required licensing,” Escudero said via email. “Our first effort will be to contact the landlord and alert them that they are in violation of the law and need to get licensed.”