There’s broad agreement that a shortage of new condominiums is a key factor driving Colorado’s affordable-housing crunch. Last week, the Legislature took another step toward adopting reforms that promise to kick-start condo construction. It’s about time.

Senate Bill 24-106, which passed the Senate Local Government and Housing Committee on Thursday, nips and tucks at current law to make it easier for buyers of new condos to work with builders to fix any mistakes in construction. That will make it less likely the parties will resort to costly litigation.

Reducing lawsuits not only would be a welcome development on general principle but also could have far-reaching impact on the housing market.

Entry-level condos used to offer a more affordable path to homeownership for a range of consumers, from young, first-time buyers to seniors on a fixed income. But years of runaway litigation over routine and even minor flaws in newly built condos caused builders’ liability insurance premiums to skyrocket. That put the chill on condo construction as builders turned to pricier single-family homes that offered a less risky investment.

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A report released in September by Colorado’s Common Sense Institute found condo construction had declined sharply over the last 15 years. Condo development between 2018 and 2022, across 11 Front Range counties, was 76% lower than between 2002 and 2008. At fault, the study concluded, was the state’s lenient construction-liability law.

The lack of condos reduces the overall housing stock and limits options, especially for buyers of more modest means. Bottom line: The cost of housing rises for everyone.

Which is why the return of condo construction to Colorado is essential to addressing the state’s affordable-housing shortage.

“Amid a thriving economy and an influx of young professionals, condos are considered attractive choices for many buyers due to their low-maintenance lifestyle and often more affordable price tags compared to single-family homes,” said the Common Sense report’s author, Peter LiFari, who’s a housing fellow with Common Sense and heads Maiker Housing Partners, a public housing authority in Adams County.

“In essence, condos are the ideal starter homes, and the ideal options for over-housed seniors at affordable prices,” LiFari said when the report was released last fall.

Yet, trial lawyers love the status quo. The condos are targeted by the lawyers because one lawsuit involving multiple units — even if only a few of them had flaws — provides a bigger payday than single-family homes in damages awards and out-of-court settlements.

Which is why a change in statute is needed to curb litigation and create alternative paths for resolving issues over constructions defects.

Of course, the trial lawyers’ lobby historically wields considerable influence among ruling Democrats in the Legislature. So it probably came as no surprise SB 106 made it out of committee last week by only one vote. All three members of the committee’s Republican minority teamed with one swing-voting Democrat to move the bill to the Senate floor. That, even though the measure’s prime Senate sponsors— Sens. Rachel Zenzinger of Arvada, and James Coleman of Denver — are themselves Democrats. Meanwhile, the bill is expected to earn the support of Democratic Gov. Jared Polis, who has called for reform.

Let’s hope more members of the ruling party see the light when the measure is debated by the full Senate as well as the House. Both parties have claimed affordable housing as a top priority, and this bill will go a long way toward attaining that goal.

Colorado Springs Gazette Editorial Board