Ordinance 305, appearing on Denver’s municipal election ballot this year, has many issues once you get past its seemingly benevolent purpose.

The proposed tax measure creates a “right” for a tenant under eviction to receive an attorney, at the expense of all the rental property owners in Denver. If the measure passes, it raises the following issues:

  • Rent will increase so rental property owners can afford their own lawyer in the eviction conflicts to come.
  • Property owners will have an incentive to rent only to “premium renters.”
  •  It creates an incentive structure for more eviction litigation.

The only winners would be the lawyers and bad tenants brandishing their new “right.” 

The new tax proposed by Ordinance 305 is only $75 per rental property. That doesn’t sound like much of a price to be passed from owner to tenant, but it hides a much larger cost.

The cost it hides is the potential recurring legal fees that the property owner will be responsible for, caused by the inevitable eviction of a bad tenant. If a bad tenant has access to a legal slush fund to receive an attorney, the property owner will need their own legal representation to have a chance in court. The cost of any legal question when lawyers get involved can be pricey and drawn out.

This potential looming price on property owners creates a hard question to answer: How do I afford to get my own lawyer? Their only answer is to estimate the cost of a lawyer, the new higher probability that an evicted tenant will have a lawyer, and pass that cost on to good tenants in the form of higher rental prices over time, further burdening good tenants.

Higher rent isn’t the only change you can expect. With the new looming threat of litigation,  property owners are now incentivized to offer their units only to “premium renters” — individuals with long rental history, high credit scores, high incomes, and professions with perceived stability.

This added liability will impact the most vulnerable in Denver by incentivizing property owners to further discriminate with tools like credit scores and rental history. If you do not fit the description of a premium renter, then you may be unfairly denied housing from the perceived risk.

Ask yourself, if you were a rental property owner, would you take on a tenant with no rental history, or a tenant with a long rental history? How would you mitigate your exposure to legal risk?

The ordinance’s creation of a slush fund of “free” money and a “right” for tenants creates an incentive for unscrupulous individuals to abuse the system. Tenants who don’t pay their rent, damage the property, or violate the terms of their lease agreement and get evicted, will get an unfair edge in court. How? Tenants are provided a lawyer, and the property owners are not. A tenant who waits until the last minute is not penalized; the government body that runs the program has attorneys ready to go. The property owner does not.

This right encourages more litigation because the money is just sitting in a slush fund to be used for an attorney for one of the two parties. In the first year after Boulder passed a similar ordinance in 2020, the staff that implemented the legal fund began watching the docket and attempted to intervene in every possible case.

An additional undiscussed cost is the ever-changing price of services. Legal services, like everything else, work on a supply-and-demand basis. Ordinance 305 is a slush fund dedicated to paying eviction attorneys and will create overnight increased demand for eviction attorneys. This new demand will not be met with a new supply. Increased demand and unchanged supply will inevitably increase the cost of legal assistance, which will be passed on to the good tenants. 

With Ordinance 305, who really wins?  Lawyers and bad tenants win by miles. Lawyers come out on top because they get an increased demand overnight, allowing them to charge more and have guaranteed work and pay. Bad tenants get guaranteed legal services because it’s a “right” paid for by the good tenant.

The ultimate result: the good tenant has the tax, and the potential recurring legal fees of the property owner passed onto them in the form of higher rent. Good tenants will pay twice because the rental property owners will be bracing for legal fees. Please vote no on Ordinance 305.

Gabriel Rios lives in Denver and owns one rental property.

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Gabriel Rios lives in Denver.