Denver’s new residential rental licensing program is off to a slow start, with just four government-recommended inspectors available to check out properties.
The Denver City Council passed an ordinance last May that calls for anyone offering, providing or operating a residential rental property in the city and county to hold a license. The city launched the resulting program in March, although licensing is voluntary this year.
“Denver will now have a licensing tool to hold landlords and property managers accountable for providing a safe living space,” said Molly Duplechian, executive director of the Denver Department of Excise and Licenses, in a statement announcing the program.
Licenses aren’t required for multi-unit residential rental properties until 2023 and single-family residential rentals until 2024, said Eric Escudero, department spokesperson.
To get a license, the property must pass an inspection by a third-party inspector who meets specific qualifications. However, the city and county’s list of qualified inspectors only includes four people as of May 10.
So far, 16 residential rental property licenses have been issued as of May 12. Meanwhile, the number of license applications stands at 59, Escudero said.
The number of government-recommended inspectors pales in comparison to the number of rental properties in Denver. Zillow, an online real estate marketplace, lists 525 homes available for rent on May 16 – and that doesn’t include the many that are already occupied.
Right now, officials don’t know exactly how many rental properties are in Denver. “All we have is estimates,” Escudero said, but the program will provide a basis for how much available rental housing stock there is “for the first time ever.”
Escudero’s department is working to bump up the inspector count by meeting with various groups, including employment platform WORKNOW and the Colorado Poverty Law Project, on top of launching social media and mass email campaigns targeting potential inspectors, property management companies and large apartment complexes this month.
“While we are disappointed in the lack of inspectors and applications so far, we are confident all the hard work we are putting forth will pay dividends with an increase in applicants and available inspectors soon,” he said.
He described the program’s overarching goal as a mandate for “minimal housing standards” for all of the city’s rental properties. Escudero pointed to a 50% discount in the application fee for people who apply this year, cut from $50 to $25.
Marina Gorbounov owns Denver-based Evolve Real Estate and Property Management, which manages single-owner properties, including condos, townhomes and houses. She emailed their homeowners within city limits – around 30 – to let them know about the licensing program, but “some jump on the boat right away, and some drag their feet until the last minute.”
Gorbounov said she doesn’t think the current iteration of the program will impact her company and other “landlords that are upfront and want to do the right thing and want to provide good housing.” However, she is wary of government involvement in “private people’s matters.”
“Licensing like that in general scares me,” Gorbounov said in a telephone interview. “Now they’re getting involved in private contracts between landlords and tenants, and I don’t like that.”
Councilwoman Stacie Gilmore, who represents Denver District 11, led the legislative charge in requiring residential rental licensing. A few months into the program, “we’re still kind of getting the footing under us,” she said in a telephone interview.
Gilmore said the program will provide the government with data about the number of rental properties in Denver, and it will also protect “some of our most vulnerable members of our community” by guaranteeing certain housing standards.
“People deserve to have that basic human right,” she said.
As for the number of certified inspectors, “we don’t want there to be a bottleneck, and we don’t think there will be,” Gilmore added.
Boulder’s own rental license program served a model for Denver’s framework, she said.
All rental properties in Boulder are instructed to have a valid rental license to establish “minimum standards for the use and safe occupancy of dwellings,” according to Boulder’s Planning & Development Services Department. The city has different requirements for long-term and short-term rentals.
Boulder’s list of inspectors approved for rental inspections spans about 15 people.
Kevin Lewis, owner of Denver Residential Rental Inspector LLC, began doing inspections this year when the Denver program kicked off, but he’s racked up about 25 years of general real estate experience.
“I did this because a friend of mine is an inspector in Boulder, and he said, ‘Oh, yeah, go do it. It’s a great opportunity,’ ” Lewis said in a telephone interview.
As one of the four government-recommended inspectors, he’s already conducted 50 to 60 inspections, with another 80 scheduled, he said. When Lewis is inspecting, he checks for dangerous situations, lighting issues, water temperatures and pressures, properly-installed electrical outlets, mold, leaky roofs, damaged walls, general building habitability and more.
He anticipates there will be increased demand for it as time goes on. “We can probably handle it all.”
Chris Scott, who’s in charge of the Denver rental license inspection program for Scott Home Inspection LLC, said the company, owned by his father, has conducted around 200 inspections so far – mostly multi-family complexes. Another 40 to 50 are on the calendar for the next few months. He anticipates more business as time goes on.
Only one of their inspectors, Woodrow Hoffmann, is fully certified for the city‘s requirements, but “we’ve definitely received a lot of requests,” Scott said. The company plans to add one more certified inspector to their ranks.
He said the certification qualifications are difficult, so the price point may be swaying some inspectors away from the program. Home inspectors in Colorado are “slammed” right now, so the program’s incentives aren’t as tempting, Scott said.
“The program is off to a slow start, but, if there are too many inspectors, the price will get driven down to the point that no one will want to do these, so it is a fine balance,” he said.
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