DENVER – Colorado Springs could be the next municipality to join a growing list of places addressing the issue of construction lawsuit reform at the local level after legislation on the issue has failed three years in a row at the state level.

City councilwoman Jill Gaebler said Friday she would bring a proposal to the council next month that would address the construction defects issue.

“We have gone back and forth with how best to address this issue,” Gaebler said. “It is a statewide concern, so how do we bring forward something that is meaningful to our community without stepping on the toes of our legislators?”

If Colorado Springs adopts an ordinance next month it will become the ninth communities in the state to pass a construction defects laws. Denver became the latest city to consider it earlier this month but hasn’t voted on the ordinance yet. Gaebler said the ordinance is being drafted and they are looking closely at what Denver is working on.

The issue is a sensitive one.

Homebuilders in Colorado are adamant that existing laws don’t protect them from an onslaught of litigation for possible flaws in housing construction. That class-action lawsuit environment, homebuilders say, has driven up the cost of insurance for construction and driven down the rate of construction, particularly of affordable multi-family homes like condominiums.

Opponents – including trial layers – of a new law say proposed changes will jeopardize the right for homeowners to get redress from shoddy construction. Opponents also say that the lack of multi-family affordable units is something being driven by much more than Colorado’s construction defects litigation.

Both sides poured big money into campaigns and lobbyists during the 2014 elections and 2015 General Assembly to try and sway the fate of Senate Bill 177.

Data from the Secretary of State’s Office shows the Colorado Association of Homebuilders spent $50,000 on lobbyists during the 2015 legislative session, while the Colorado Trial Lawyers Association spent almost $90,000. More than 50 organizations hired 59 lobbyists to support SB 177 and 11 organizations hired 13 lobbyists against the bill.

That bill would have required a homeowners’ association to notify all members of the association about the pending dispute, receive written consent from a majority of owners and use mediation before filing a lawsuit.

The bill died in a House committee at the hands of Democrats, who hold a majority.

House Minority Leader Brian DelGrosso, R-Loveland, said he hopes the weight of municipalities taking on the issue will weigh heavily upon those who opposed his bill in 2015.

“Quite frankly, around the state, it’s not going away,” DelGrosso said. “It’s continuing to grow, continuing to get bigger and bigger. There definitely needs to be legislation, a statewide solution next year.”

Rep. Jonathan Singer, D-Longmont, said municipalities have headed down this path now that courts have “codified their right to do so.” Singer co-sponsored SB 177 with DelGrosso.

“The hope is that the legislature will wake up to understanding how pressing this issue is so we can avoid a patchwork of regulation across the state.”

Rep. Max Tyler, D-Lakewood, is from the first city to bring a local ordinance.

“Has this solved the problem? It hasn’t yet,” Tyler said. “I haven’t seen anybody come forward with a plan to build multi-family, owner-occupied affordable condos since that time.”

Tyler said he doesn’t buy the argument that lawsuits and the price of insurance has stalled the construction of affordable housing.

“I will bring bills forward, definitely, to help deal with the affordable housing problem,” Tyler said. “Which is not the same as tort reform.”

DelGrosso agreed that changing the laws on lawsuits over construction defects will not be a silver bullet to speed construction, but it’s a step in the right direction, he said.

Sen. Rollie Heath, D-Boulder, said making it more difficult to seek redress in court for construction defects is most likely to harm those who are lower income.

“For people who would barely qualify for a home mortgage, to force them into mandatory arbitration and so forth when they really aren’t in a position to push their claim … would put them in actually a worse place,” Heath said.

He said the slowdown in condo construction is not unique to Colorado.

Details of the municipal law being considered in Colorado Springs are still being worked out, but options considered by other municipalities include: requiring informed consent of homeowners before filing a suit on builders of condominiums, mandatory arbitration provisions, giving builders a right to repair defects before facing lawsuits and limiting claims over non-material defects like those that don’t cause economic or actual damage.

Gaebler said her proposal will be heard at the council’s Nov. 10 workshop. It will require two votes before it becomes law.

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Contact Megan Schrader: 286-0644

Twitter @CapitolSchrader

Naz Dupre carries tubing to be cut on top of a house under construction in Promontory Point Friday, May 23, 2014. In many neighborhoods on the northeast side of Colorado Springs, families are moving into homes while construction is still going on nearby. Photo by Julia Moss, The Gazette.

JULIA MOSS, THE GAZETTE