Lawyers dig into Denver City Council’s call on the governor to freeze rents

7 min. read
Signs calling for a rent strike, seen in Capitol Hill. April 1, 2020. (Kevin J. Beaty/Denverite)

Colorado Governor Jared Polis says he can't simply remove the burden of rent from people struggling with the economic consequences of the novel coronavirus.

Denver City Council disagrees. Lawyers say it's complicated.

Jason Legg, a lawyer who advises tenants, cites the law under which Polis declared the coronavirus outbreak an emergency on March 10. The emergency statute allows the governor to "commandeer or utilize any private property if the governor finds this necessary to cope with the disaster emergency," and calls for providing "temporary emergency housing."

Legg said that based on such provisions, Polis does have authority to, as City Council urged in a proclamation adopted unanimously March 13, ensure that tenants who cannot pay rent during the emergency caused by the pandemic don't have to, and that they do not incur debt for back rent or interest for unpaid rent. The City Council proclamation also called on the federal government to enact a moratorium on rent and mortgage payments during the coronavirus emergency.

In a statement the day the proclamation was adopted, the Colorado Apartment Association said the landlords it represents depend on rent not only for mortgages, but to pay staff and taxes and for the upkeep of the housing they provide.

"We understand this is a really challenging time for everyone," Mark Williams, executive vice president of the landlords' group, said in the statement. "For those residents who are able to pay rent, we ask that they do to ensure that financial assistance is prioritized to help those in dire financial situations."

During an April 13 press conference, Polis said: "No governor, no president has the legal ability to suspend the sanctity of contract law. No state has done that."

Zach Neumann, who along with other lawyers recently launched the COVID-19 Eviction Defense Project that seeks to connect volunteer lawyers with tenants, would like to see politicians at all levels of government act to help tenants who are struggling.

But "the power of the governor to cancel a contract is pretty unclear," Neumann said.

David Seligman, a lawyer who focuses on workers' rights issues, said the government does sometimes interfere in contracts, as when legislatures set minimum wage requirements.

"What the governor alone has the right to do is a tricky question," Seligman acknowledged.

Legg pointed to case law that calls a contract property, and to the concept of eminent domain, under which governments can seize private property for public use as long as they pay compensation. Legg said if rents were frozen, landlords would have to be compensated by the state, as in an eminent domain case. That would require negotiations over whether the full amount of lost rents was owed, or whether some other calculation would be necessary to determine how badly landlords would be hurt, he said.

Legg compared the pandemic's impact on the finances of many families to a natural disaster. Following flooding and wildfires in Colorado in 2012 and 2013, state officials used federal relief funds to help tenants pay rent and homeowners repair and rebuild housing.

When floods destroy homes, "you make sure people have a place to live," Legg said. "It's no different (in the wake of the coronavirus). And it's caused, again, by disaster."

Housing prices have long risen faster than earnings, and some 96,000 Denver households that get by on less than the median income are spending more than the recommended third of their earnings on housing. The job losses linked to the coronavirus are just one more blow.

"People are losing sleep over this and they're scared," Legg said.

In a March 20 executive order, Polis instructed aides to work with property owners and landlords to stave off evictions and avoid exacting fees for late or non-payment of rent from tenants affected by the outbreak of coronavirus until at least April 30. The governor's order also called for encouraging financial institutions to halt foreclosures and allow for a 90-day delay in mortgage payments from residential property owners affected by the coronavirus. Polis also directed his Department of Public Safety to work with sheriffs to suspend residential evictions until April 30, a step Denver had taken before the gubernatorial order. Across the state, courts have suspended eviction hearings and, in some cases, filings.

"The governor has done a lot, and we really appreciate what he's done," Seligman said.

In response to the coronavirus outbreak, the Colorado Apartment Association has called on its member landlords to halt evictions, work with tenants on payment plans, and take other steps to ensure people remain housed during the crisis. It also has compiled a guide for tenants on rental assistance and other support  programs.

Rental assistance often operates on a first-come, first-served basis, such as a program Adams County announced last week in response to the coronavirus outbreak. The Adams County Foundation made an initial $300,000 grant for the rent and mortgage relief program to be administered by Maiker Housing Partners, the county's housing authority. In Denver, renters can turn to the city's Temporary Rental and Utility Assistance program, known as TRUA.

The Colorado Apartment Association said last week that 91 percent of Colorado renters had so far been able to pay their April rent. In comparison, the National Multifamily Housing Council said 84 percent of renters across the country had been able to make a full or partial payment by April 12. The Colorado landlords group also said many landlords had created payment relief plans that on average allowed four months for April rents to be paid. A survey by the Colorado group found that 3 percent of Colorado renters had approached their landlords about deferred payment plans, a figure expected to rise in May.

Polis made clear in his March 20 order on evictions that it did not relieve "a tenant of the obligation to pay rent."

"What we want to do in Colorado, what I have done, is really make sure that we take the strongest steps of any governor to help protect renters," the governor said during the April 13 news conference.

Across the state, courts have suspended eviction hearings and in some cases the filings that lead to hearings. The federal coronavirus aid package that became law last month includes a moratorium on evictions in certain cases, including for tenants in properties that have federal housing loans (those amount to pauses). Once the emergency is over, tenants could end up owing back rent, late fees and more or facing eviction -- one of the reasons City Council has called for no rents to be charged for people affected during the pandemic.

"I think that the risk of really significant displacement and homelessness is very real," said Neumann, of the COVID-19 Eviction Defense Project.

He would like to see a statewide pause on evictions. While such a step would not solve all the problems tenants face, it would help eliminate confusion. And the pause could give tenants time to work out payment plans with their landlords and to get money that has been promised under the federal response to the coronavirus outbreak as well as unemployment checks.

Jack Regenbogen, a lawyer with the Colorado Center on Law and Policy, also called for a pause on evictions, saying it should cover both court hearings and filings and be extended for some period beyond the coronavirus state of emergency.

Seligman said a pause on evictions is urgently needed, and that addressing people's inability to pay will eventually need to be addressed as well.

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