COLORADO SPRINGS — Condo construction is down throughout the state of Colorado, and some say a state law has created challenges to build more.
"Condos used to be about 30% of the total for sale product, and today they're like probably less than 5%," Scott Smith, with the Housing and Building Association of Colorado Springs said.
Typically, condos offer a way to get people into home ownership and also create options for seniors looking to downsize.
Numbers from the Pikes Peak Regional Building Department show condo construction has taken a hit in the region. In the past five years, condos have only been constructed in 2021 and 56 units were built.
Smith said condos take a hit with construction because insurance costs run higher than other forms of housing, like single-family homes.
A report from Zonda, a housing market research firm shows insurance costs for single-family home projects can average between 1.1% to 1.65% compared to 5.5% for condo construction. Builders and developers say the increased insurance costs are because of state law surrounding "construction defects".
They say it leads to more litigation instead of quick repairs on issues.
"It’s made it so much more expensive than it needs to be,” Dave Lemnah, owner of Lokal Homes, a Colorado-based builder said. His company is the only company to have built condos in El Paso County in the past five years.
Lokal Homes has also faced lawsuits under the state's construction defect laws.
"We need to get back to some kind of a happy balance that, you know, allows for the construction of condos yet still protects homeowners," Smith said.
Opponents argue there needs to be more accountability on builders, Smith agrees accountability is needed but said there needs to be more opportunity for builders to fix issues before taking matters to court.
"The problem is, is that this gets into a very technical and very expensive litigation environment," Smith said.
"I know we would we would always want an opportunity to go in and fix something that is defective. And it just takes a spirit of cooperation to do that from both sides." Lemnah said.
Lawmakers on both sides of the aisle are considering proposals to the state's laws during this legislative session.
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