Town of Telluride v. THIRTY-FOUR VENTURE

• Citation: 3 P.3d 30
• Decision Date: 05 June 2000
• Docket Number: No. 98SC547.,98SC547.
• Parties: TOWN OF TELLURIDE, Colorado, a municipal corporation, Petitioner, v. LOT THIRTY-FOUR VENTURE, L.L.C., Respondent.
• Court: Colorado Supreme Court

3 P.3d 30

TOWN OF TELLURIDE, Colorado, a municipal corporation, Petitioner, v. LOT THIRTY-FOUR VENTURE, L.L.C., Respondent.

No. 98SC547.

Supreme Court of Colorado, En Banc.

June 5, 2000.

As Modified on Denial of Rehearing June 26, 2000.

Alperstein & Covell, P.C., Edward M. Caswall, Denver, Colorado, Attorney for Petitioner.

Rudnick & Wolfe, Thomas F. Geselbracht, Morton M. Steinberg, Rachel M. Vorbeck, Chicago, Illinois, Herbert S. Klein & Associates, P.C., Herbert S. Klein, Aspen, Colorado, Attorneys for Respondent.

Geoffrey T. Wilson, Denver, Colorado, Attorney for Amicus Curiae, Colorado Municipal League.

Austin, Peirce & Smith, P.C., Thomas Fenton Smith, Aspen, Colorado, Attorney for Amicus Curiae, Aspen/Pitkin County Housing Authority.

John Ely, County Attorney, Aspen, Colorado, Attorney for Amicus Curiae, Pitkin County.

John P. Worcester, City Attorney, Aspen, Colorado, Attorney for Amicus Curiae, City of Aspen.

Andrew C. Hamrick & Associates, P.C., Andrew C. Hamrick, Englewood, Colorado, Attorney for Amicus Curiae, Colorado Apartment Associates.

Justice KOURLIS delivered the Opinion of the Court.

This case concerns the scope of the state prohibition on rent control contained in section 38-12-301, 10 C.R.S. (1999). Specifically, we must determine whether a local affordable housing measure constitutes rent control prohibited by the statute, and whether a home rule municipality may exercise its authority over matters of local concern to regulate rents despite the state rent control statute.

The Town of Telluride (Town) enacted Ordinance 1011, which imposes an "affordable housing" requirement on the majority of new developments in the Town. The ordinance requires property owners to create affordable housing for forty percent of the employees generated by new development. Owners can satisfy the requirement by constructing new housing units with fixed rental rates, by imposing deed restrictions on free market units in order to fix rental rates, by paying fees in lieu of housing, or by conveying land to the Town for affordable housing. Lot Thirty-Four Venture, L.L.C. (Thirty-Four Venture), challenged the ordinance, claiming that it constitutes rent control in contravention of section 38-12-301.

Today, we hold that Ordinance 1011 does fall within the commonly understood meaning of rent control. Because the Town's ordinance contemplates rent control within the plain meaning of that term, it conflicts with the state's broadly worded prohibition on local measures controlling rents.

We further hold that the state statute supersedes the authority of a home rule municipality to regulate rents. The issue of rent control implicates both state and local interests, and therefore, we find that it is properly characterized as a "mixed" concern. Because it is a mixed concern, and because Ordinance 1011 and the statute conflict, the local ordinance must yield to the state statute. We, therefore, affirm the court of appeals. See Lot Thirty-Four Venture, L.L.C. v. Town of Telluride, 976 P.2d 303 (Colo.App. 1998)

. We find Ordinance 1011 to be invalid, and uphold the constitutionality of the state statute.

I.

A.

In June 1994, respondent, Thirty-Four Venture, acquired title to Lots 34 and 34B in the Accommodations Two (AC-2) zoning district within the Town of Telluride. The AC-2 district permits visitor-oriented accommodations and recreation facilities to serve visitors and residents in limited commercial uses.

In September 1994, the Town Council of the Town of Telluride (Town Council) adopted Ordinance 1011, which amends the Telluride Land Use Code to add "affordable housing" mitigation requirements. The Town Council enacted the ordinance to address concerns generated by the pressures of new development in the area.¹ The ordinance requires owners engaging in new development to mitigate the effects of that development by generating affordable housing units for forty percent of the new employees created by the development. See Ordinance 1011, § 3-740.² A developer must provide 350 square feet of housing space for forty percent of the number of employees a proposed development generates. See id. §§ 3-740.A.1. The mitigation requirement is imposed uniformly in the majority of zoning district classifications within the Town, including the AC-2 district. See id. § 3-720.

Ordinance 1011 provides developers with four general options, or a combination thereof, to satisfy the affordable housing requirement. They may (1) construct new units and deed-restrict them as affordable housing, see id. §§ 3-750.B.2.a to 3-750.B.2.c, 3-750.B.3.a to 3-750.B.3.c; (2) deed restrict "existing free market units" as affordable housing,³ see id. §§ 3-750.B.2.d, 3-750.B.3.d; (3) pay fees in lieu of deed restricted housing,⁴ see id. §§ 3-750.B.2.e, 3-750.B.3.e; or (4) convey land to the Town of Telluride with a fair market value equivalent to the fee paid under option three, see id. §§ 3-750.B.2.g, 3-750.B.3.g.

Approximately two weeks after adopting the ordinance, the Town Council also adopted the Telluride Affordable Housing Guidelines (Guidelines). The Guidelines, working in conjunction with Ordinance 1011, establish the price guidelines and regulations for rental units, and the conditions for tenant eligibility. If the developer chooses either of the deed restriction options, then the Guidelines set maximum rental rates per square foot for the property. See Telluride, Colo., Telluride Affordable Housing Guidelines § 6 (1994). A unit's maximum rent is determined by multiplying a constant monetary amount, such as $1.42 for a single bedroom apartment, with the square footage of the unit. See id. § 6 tbl.2. The Guidelines cap rental rate increases for units designated as affordable housing at no more than 2.5% per annum, unless the Telluride Housing Authority allows a higher increase. See id. § 6.7. The sale of deed restricted properties is similarly limited. Properties may be sold only to qualified residents, or to a qualified owner who will rent to qualified residents, for a maximum sale price per square foot with the annual growth of the sale price capped. See id. § 7.

The Guidelines also set a base price for the payment-in-lieu of construction option. See id. § 8. The Town will use the payments for the production of additional affordable housing. See id.

B.

Thirty-Four Venture challenged the affordable housing provisions of Ordinance 1011 in San Miguel County District Court.⁵ Thirty-Four Venture sought to enjoin the Town from enforcing the ordinance, arguing that it constitutes rent control, and therefore, violates section 38-12-301, 10 C.R.S. (1999), which precludes municipalities from "enact[ing] any ordinance ... which would control rents on private residential property."

Each side moved for summary judgment. The trial court granted the Town's summary judgment motion, and dismissed the complaint, including the allegation that Ordinance 1011 violates section 38-12-301. The trial court noted that section 38-12-301 applies to the Town as a home rule city and that the statute does not unconstitutionally violate a home rule city's self-governance authority pursuant to article XX of the Colorado Constitution. However, the court went on to dismiss the complaint because it held that "the provisions of Ordinance 1011 do not constitute `rent controls' as contemplated in [section] XX-XX-XXX." The trial court premised this conclusion on the "significant discretion" that the ordinance vested in the developer to choose the manner of satisfying the affordable housing mitigation requirements.

The court of appeals reversed the judgment of the trial court. The court disagreed with the trial court's characterization of the Ordinance as outside the scope of "rent control" contemplated by the General Assembly. See Lot Thirty-Four Venture, L.L.C. v. Town of Telluride, 976 P.2d 303, 307 (Colo. App.1998)

. Instead, the court held that Ordinance 1011 constitutes "rent control" within the meaning of section 38-12-301 "because the restrictions set out [in the Ordinance] operate to reduce the number of options available to plaintiff in the use of its property from what it had agreed to under the previous agreements" with the Town.⁶

Id. Further, the court of appeals refused to hold section 38-12-301 unconstitutional as an improper intrusion into the self-governance authority of home rule cities. See id.

Telluride now appeals. We granted certiorari to consider whether Ordinance 1011 is a form of "rent control" within the purview of section 38-12-301, and if so, whether section 38-12-301, enacted by the General Assembly in 1981, constitutionally supersedes Ordinance 1011.⁷

II.

The first issue on appeal requires us to determine whether Telluride's affordable housing scheme falls within section 38-12-301's prohibition of "rent control." The statute is titled "Local Control of Rents Prohibited" and states,

The general assembly finds and declares that the imposition of rent control on private residential housing units is a matter of statewide concern; therefore, no county or municipality may enact any ordinance or resolution which would control rents on private residential property. This section is not intended to impair the right of any state agency, county, or municipality to manage and control any property in which it has an interest through a housing authority or similar agency.

§ 38-12-301.

A.

The General Assembly did not define "rent control." Further, no published opinion of a Colorado court, with the exception of the court of appeals' decision in this case, has addressed this statute, much less addressed the scope of its proscription against rent control. Thus, we first must interpret the meaning of the phrase "rent control."⁸

When construing the meaning of a statute, reviewing courts should first consider the statutory language and give the words their plain and ordinary meaning. See Snyder Oil Co. v. Embree, 862 P.2d 259, 262 (Colo.1993)

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