In our December 2022 Otten Johnson Alert, we reported that the City of Denver planned to evaluate buildings in the downtown area that might be suitable for converting potentially underused office space to much needed residential space. The City recently completed its study, identifying a total of twenty-two buildings that it considered good candidates for conversion.

The primary categories that were assessed as part of this study included:
• Site Context: analyzing the walkability of surrounding area, access to public transportation, availability of natural light, amount of obstructed views in the vicinity, and whether the building would provide any south facing windows.
• Building Form: determining whether the building was of suitable shape to be converted to housing units as opposed to offices.
• Floor Plate: calculating the average distance between the core of the building and windows (often a key challenge with office to residential conversions) along with the number of existing elevators in the building.
• Envelope: examining how easily windows could be replaced to be suitable for residential use.
• Servicing: evaluating the loading, parking, and general structure of the building for compatibility with residential purpose.

The study evaluated each of these categories and scored the buildings on a scale of 1 to 10. The categories were also given weighted conversions for the scores, with building form and floor plate scores being more heavily weighted than site context or envelope, indicating that overall building structure was more critical for conversion compatibility. Of the top twenty-nine properties initially considered, twenty-two scored above an 80%, indicating a high compatibility with residential conversion. Sixteen of the twenty-nine candidates were provided an individual compatibility assessment that expanded on the scores in each category, providing further insight into why these buildings might or might not have potential to become residential spaces. The majority of the buildings identified as ideal candidates for conversion are located within the Central Business District, with some in the Union Station and Northern Capitol Hill neighborhoods.

While the study provides a starting point for the City of Denver in its journey to convert office buildings to housing, there are still many challenges ahead. The City will first need to approach building owners about their interest to either sell the building to the City for the City to convert or for the owner to consider pursuing conversion on its own. Inclusion in the study did not necessarily mean any of the buildings were actually considering conversion, but instead aimed to provide a comprehensive set of options for the City to pursue. Now the City will need to work with these building owners for the next steps.

Additionally, the study does not consider the individual cost of a conversion for each site, noting that renovation costs would need to be considered on a case by case basis. The study further indicates that while the zoning does not require a change in use, the residential use would have to “comply with all current regulatory instruments such as Design Guidelines, Current codes, and Zoning Requirements,” all of which add to the potentially steep cost of a renovation. As we discussed in our December 2022 Otten Johnson Alert, the cost of conversion is perhaps the steepest barrier to overcome when considering converting an office building to residential as these are often complicated, intricate renovations requiring specific expertise. As the City approaches building owners, it will have to navigate the cost conversation and work with building owners to ease concerns regarding regulatory and permitting obstacles.

Affordable housing remains a hot topic in the Denver Metro area. Converting the top sixteen candidates identified in the study to housing could add approximately five thousand units to Denver’s housing stock, which could help in easing some of the housing burden in Denver, which was estimated to be short roughly 70,000 units as of June, 2023.

As we originally reported in our June 2022 Otten Johnson Alert, in June of 2022 Denver’s City Council passed a number of amendments to the municipal and zoning codes in an effort to expand affordable housing in the City.  Denver’s Expanded Housing Affordability policy (the “EHA Policy”) included a period of time under which existing development projects could continue through the approval process under the prior regulations. On May 22, 2023, Denver’s City Council passed two bills extending certain approval process deadlines.  While the concept plan submission deadline remains unchanged (June 30, 2022), the site development plan (“SDP”) approval process dates for projects to be evaluated under the prior regulations have been adjusted as follows:

Continue Reading Denver’s City Council Extends Deadline Requirements for Developers While New Denver Mayor Pledges to Push for Affordable Housing

In October of 2022, the Colorado Court of Appeals, Division VII rendered an opinion in MLS Properties LLC v. Weld County Board of Equalization.  While this case is the first to reach the Colorado Court of Appeals, there were, at the time, twelve similar claims pending throughout Colorado. In these cases, the most notable issue was how to interpret C.R.S. 39-1-104(11)(b)(I), which allows a taxpayer to have their property revalued by the county assessor to account for “unusual conditions” (the “Unusual Conditions Statute”).

Continue Reading Property Taxes and Unusual Conditions

As part of its “Roadmap to Net Zero Buildings,” the City of Golden is currently considering proposed regulations to achieve its goal of 100% renewable energy for electricity by 2030, and 100% renewable energy for heating by 2050.  The proposed regulations would amend the building energy code (Title 18 of the Golden Municipal Code), which Golden’s Community Sustainability Advisory Board (CSAB) and Planning Commission (PC)  determined are insufficient for Golden to meet its renewable energy goals. 

The CSAB and PC prepared recommendations for Golden City Council’s consideration, which fall into four general categories.  First is the adoption of the New Building Institute’s Decarbonization Code, which includes an all-electric provision for new residential and commercial construction within six months from adoption, requiring all-electric buildings with 100% onsite renewable energy production and no natural gas connections (with some exceptions).   Second is a commitment that all new municipal buildings will be built with the same construction, in addition to the currently-required LEED certification.  Third is implementation of a commercial energy benchmarking program, with the data used to create recommendations for renewable energy requirements for existing buildings.  Last is the need to commit to further research and recommendations for converting existing buildings to net zero, all-electric, as well as other sustainable building code requirements, such as water efficiency, waste diversion, and sustainable building materials. The CSAB and PC have organized multiple meetings for public comment on various aspects of the proposals.  These included discussions regarding when installing solar panels or other renewable energy sources isn’t feasible and what alternatives could be established, the hardships that could be experienced for buildings without natural gas and what alternative pathways to compliance would include, as well as the definition of “new construction.”  Over the ensuing months, it is anticipated that council will work to prepare ordinances and/or resolutions for review and future public hearings.  Additional information about Golden’s Roadmap to Net Zero Buildings can be found here:

February and March were active months for the Colorado House of Representatives with respect to attempted reforms of current landlord/tenant laws in Colorado.  In addition to proposed major overhauls to Colorado statutory eviction procedures (House Bill 23-1171), on February 27th the House passed House Bill 23-1115, which proposes repealing the current statewide ban on local government rent control measures.

Under current state law, counties and municipalities are expressly prohibited from enacting any ordinance or resolution controlling rent on private residential property or individual private residential housing units (C.R.S. § 38-12-301).  In addition to repealing that prohibition, HB 23-1115 proposes a conforming amendment placing specific requirements on future local government rent control measures.

Continue Reading Colorado House Passes, Senate Considers Repeal of Rent Control Prohibition