Developers: CO condo defect law crippling construction of new for-sale units

Dive Brief:

  • Colorado’s construction defect laws are constraining Denver condo development and potentially decreasing the availability of affordable entry-level homebuyer options, according to The Wall Street Journal.
  • The current law allows homeowners and condo boards to sue builders without first requiring arbitration. The law also has reportedly has driven up the cost of builder insurance, as it requires insurers to cover a wide range of defects.
  • According to a city of Denver market study, the risk of litigation for condo construction defects adds $15,000 to the building costs of each unit.

Dive Insight:

Denver’s hot housing market, as in many other cities, has resulted in a lack of affordable housing, and condos often provide a lower-cost entry into the real estate market for lower-income and first-time buyers. Critics of the Colorado defects law maintain that development of for-sale condos, which has declined in Denver by 53% over the last five years, will prevent more renters from becoming

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