The Senate this week wrapped up its work on a measure backers hope will revitalize the construction of for-sale condos and other multifamily housing in Colorado.

Wednesday, the Senate briefly discussed House Bill 1272, noting the most recent amendments the Senate Local Government and Housing Committee added last week.

The changes didn’t end there. The Senate also clarified the questions about inspections under the optional multifamily construction incentive program established under the bill.

That program for homebuilders provides a warranty covering any defect at no cost to the homeowner for a minimum of a year for workmanship and materials, two years for plumbing and electrical work, and six years for major structural components. It requires a third-party inspection during construction that results in a certificate of occupancy. It also provides for various remedies in case a defect is discovered.

Homeowners’ groups and homebuilders have raised concerns about who would hire the inspectors. The amendment made it clear that the inspectors would be under the direction of the insurer providing liability insurance.

The bill now must go back to the House for its review of the amendments. Senate President James Coleman, D-Denver, a prime co-sponsor, told reporters Wednesday the changes have the support of the bill’s House sponsors.

Senate Minority Leader Sen. Paul Lundeen, R-Monument, said the measure is a good first step but does not go far enough. He plans to continue working on the issue, he said. 

HB 1272 passed the Senate on a 31-4 vote, with all the “no” votes coming from progressive Democrats.

The construction defects issue has stymied condo construction in Colorado for at least the past 15 years.

Affordable condos, currently priced at around $400,000, are considered the entry point for young professionals, families, and seniors looking to downsize.

However, the affordable condo construction market in Colorado has all but vanished.

The Common Sense Institute reported in 2023 that since 2018, 14 new apartments have been built for every new condo. Prior to 2009, one new condo was built for every 1.25 apartments constructed.

The report also said the number of condo developers has dropped from 146 to 23 over the last 15 years. Homebuilders have cited the cost of defect litigation and the high cost of liability insurance, which can add up to $40,000 per unit.

The less expensive liability insurance provided by regulated property and casualty insurers, a market that vanished after changes in state law in 2010, is not guaranteed to return anytime soon.

Gov. Jared Polis, who expressed support for HB 1272 when it was introduced, is expected to sign it.