A bill seeking to qualify low-income Coloradans for much more rental housing cleared the Senate on Monday.

Most landlords require tenants to earn at least three times the amount they charge for rent. In 2022, the average monthly cost of a one-bedroom apartment in Colorado stood at $1,364. That means tenants must make at least $49,104 to qualify. The individual median income for Coloradans is just under $37,000, according to the most recent Census data from 2020. 

If made law, Senate Bill 184 would cap minimum income requirements for tenants to twice the cost of rent. It would also cap security deposits to the cost of two months’ rent, among other changes. 

“Over the last decade, the cost of housing in Colorado has doubled, forcing folks to spend larger shares of their income on rent,” said bill sponsor Sen. Faith Winter, D-Westminster. “It’s time to put in place sensible guardrails to expand housing access for Coloradans of all income levels.” 

The Senate approved the bill in a 22-12 vote on Monday. All Republicans voted against the bill and all but one Democrat voted in support of it. 

Critics called the bill’s restrictions “excessive” and “punitive” for landlords. They said the bill will contribute to dis-incentivize landlords from renting. 

The state legislature is currently considering several bills that sponsors say will lower housing costs for renters by cracking down on the actions of landlords. Some of those bills seek to prohibit evictions without just cause and cap housing fees for owning pets.

“You’re really going to end up hurting the very people you think you’re going to help,” said Rep. Janice Rich, R-Grand Junction. “What I’m hearing is a lot of people are just going to sell their rental properties and there’s going to be less for (renters) to choose from.” 

Sen. Joann Ginal, D-Fort Collins, was the only Democrat to vote “no” on SB 184 Monday. She said the bill would open the door for renters to over-spend on housing, as well as make the agreement more risky for landlords. 

“It sets the tenants up and the landlords up for failure,” Ginal said. “If someone isn’t financially secure enough to pay an upfront deposit, then they probably aren’t in any position to rent anyway.” 

The general rule of thumb for budgeting rent is to spend a maximum of 30% of one’s monthly income on housing, with those who spend more than 30% being classified as cost-burdened.

But with the cost of housing in Colorado rising faster than incomes, fewer and fewer residents are able to adhere to this standard. In 2022, a study found that half of Colorado renters spent more than 30% of their income on housing – a rate above the national average and the eighth-highest of all states. 

In addition, proponents of the bill said it would close a loophole landlords use to discriminate against people who use housing vouchers. While landlords can’t deny tenants for using housing vouchers, they can still require the tenant to earn a certain amount. Proponents said this is also particularly difficult for those who live on fixed incomes, such as older adults, veterans and people with disabilities. 

The bill clarifies that tenants can raise discrimination as a defense in eviction proceedings, and it prohibits landlords from considering credit scores when evaluating potential tenants who use housing vouchers. 

“Burdensome income requirements shut out too many hardworking Coloradans from the market,” said bill sponsor Sen. Tony Exum, D-Colorado Springs. “This bill will help ensure prospective renters aren’t being discriminated against because of their income while improving housing stability across Colorado.”

In committee, sponsors changed the bill in response to points opponents raised, including raising the income cap to two times rent, instead of the original 1.25 times rent, and raising the deposit cap to two months’ rent instead of the original one month’s rent. 

Winter also fully removed several provisions of the original bill that would have, in part, required landlords to accept the first eligible tenant who applies; allowed tenants to pay deposits in monthly installments; and, prohibited landlords from considering a tenant’s financial status if they have paid their rent on time for the last three months or if they have a financially qualified co-signer. 

The bill now goes to the House for consideration.