Lot Splitting Approval by Subject Jurisdictions

Second Regular Session Seventy-fifth General Assembly STATE OF COLORADO REENGROSSED This Version Includes All Amendments Adopted in the House of Introduction HOUSE BILL 26-1308 LLS NO. 26-0047.01 Caroline Martin x5902 HOUSE SPONSORSHIP Boesenecker and Woodrow, Camacho, Froelich, Lindsay, McCormick, Nguyen, Phillips, Rutinel, Smith, Stewart R.

SENATE SPONSORSHIP Amabile and Ball, House Committees Senate Committees Transportation, Housing & Local Government A BILL FOR AN ACT CONCERNING LOT SPLITTING APPROVAL BY SUBJECT JURISDICTIONS.

Shading denotes HOUSE amendment. Double underlining denotes SENATE amendment.

Capital letters or bold & italic numbers indicate new material to be added to existing law. Dashes through the words or numbers indicate deletions from existing law.

March 24, 2026 The bill provides that, on or after December 31, 2027, subject to an administrative approval process, a subject jurisdiction shall approve the split of an original lot into 2 new lots if the following conditions are met: ! The area of the original lot is 2,000 square feet or greater before the split; ! If the 2 new lots are not equal in area, the area of the smaller of the 2 new lots is equal to or greater than 40% of HOUSE (Note: This summary applies to this bill as introduced and does not reflect any amendments that may be subsequently adopted. If this bill passes third reading in the house of introduction, a bill summary that applies to the reengrossed version of this bill will be available at http://leg.colorado.gov.) 3rd Reading Unamended Bill Summary HOUSE Amended 2nd Reading March 23, 2026 the area of the original lot; ! The original lot is not subject to any previously recorded lot split; ! Residential use is allowed on the original lot; ! The original lot is not an exempt lot; and ! The original lot is not located within a common interest community that was created on or before December 31, 2027. If an original lot or any structure built on the original lot is subject to an evidence of debt constituting a residential mortgage loan, then prior to approving the split of an original lot, a subject jurisdiction shall verify that the holder of the evidence of debt constituting a residential mortgage loan (holder) has received notice of the proposed lot split and has consented to the lot split in writing. The holder may condition consent to the lot split on the satisfaction of specified conditions. The written consent of the holder must include: ! The signature of the holder or the agent of the holder; ! The name of the record owner or ground lessee of the original lot; ! The legal description of the original lot; and ! The identities of all parties with an interest in the original lot, as reflected in the real property records. The written consent of the holder must be recorded in the office of the county recorder of the county in which the original lot is located. If the holder does not provide written consent to the lot split, the subject jurisdiction shall not approve the lot split.

Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, add part 5 to article 35 of title 29 as follows:

PART 5 LOT SPLITTING

29-35-501. Legislative declaration.

(1) THE GENERAL ASSEMBLY FINDS AND DECLARES THAT:

(a) THE DIVISION OF AN EXISTING RESIDENTIAL LOT RESULTING IN THE CREATION OF ONE ADDITIONAL RESIDENTIAL LOT PROVIDES MEANINGFUL BENEFITS TO BOTH CURRENT PROPERTY OWNERS AND PROSPECTIVE HOMEBUYERS.

ADMINISTRATIVE LOT SPLITTING CAN PROVIDE EXISTING HOMEOWNERS WITH THE FLEXIBILITY NEEDED TO ADAPT TO CHANGING LIFE CIRCUMSTANCES SUCH AS AGING IN PLACE, MULTIGENERATIONAL LIVING, AND OTHER CHANGES IN FINANCIAL NEEDS WHILE MAINTAINING HOMEOWNERSHIP. LOT SPLITTING, PARTNERED WITH A LOW MINIMUM LOT SIZE, CAN EXPAND ATTAINABLE HOMEOWNERSHIP OPPORTUNITIES FOR FIRST-TIME HOMEBUYERS AND HOMEBUYERS WITH MODERATE-INCOMES;

(b) THE NEED FOR ADDITIONAL HOUSING UNITS ACROSS THE STATE REMAINS URGENT. ACCORDING TO THE COLORADO STATE DEMOGRAPHY OFFICE IN ITS SEPTEMBER 2025 RESEARCH BRIEF TITLED "COLORADO'S HOUSING SHORTFALL: AN ESTIMATE AND REVIEW OF EXISTING STUDIES," THE STATE'S HOUSING SHORTFALL IS ESTIMATED AT APPROXIMATELY ONE HUNDRED SIX THOUSAND UNITS. BASED ON THE MOST RECENT POPULATION PROJECTIONS BY THE COLORADO STATE DEMOGRAPHY OFFICE, THE STATE MUST ADD APPROXIMATELY THIRTY-FOUR THOUSAND ONE HUNDRED NEW HOUSING UNITS ANNUALLY OVER THE NEXT DECADE TO PREVENT AN INCREASE IN THE EXISTING HOUSING SHORTFALL;

(c) ACCORDING TO DATA FROM THE FEDERAL HOUSING FINANCE AGENCY AND THE U.S. BUREAU OF ECONOMIC ANALYSIS, HOUSING COSTS IN COLORADO HAVE RISEN AT A RATE THAT OUTPACES INCOME GROWTH, SUCH THAT IN 2023, HOME PRICES WERE APPROXIMATELY TWO HUNDRED TWENTY-THREE PERCENT ABOVE THEIR 2000 VALUES, WHILE MEDIAN INCOMES INCREASED BY ONLY ONE HUNDRED FORTY-FOUR PERCENT DURING THE SAME PERIOD;

(d) ABSENT FROM SUSTAINED STRATEGIC ACTION TO INCREASE HOUSING PRODUCTION AND ADDRESS SUPPLY BARRIERS, THE GAP BETWEEN HOUSING SUPPLY AND DEMAND WILL CONTINUE TO WIDEN, ADVERSELY AFFECTING RETENTION, AND COMMUNITY WELL-BEING THROUGHOUT THE STATE;

AFFORDABILITY, ECONOMIC STABILITY, WORKFORCE

(e) ENTRY-LEVEL STARTER HOMES SERVE AN ESSENTIAL FUNCTION IN THE HOUSING MARKET. STARTER HOMES, TYPICALLY UNDERSTOOD AS HOMES WITH LESS THAN ONE THOUSAND FOUR HUNDRED SQUARE FEET, ENABLE HOMEOWNERS TO BUILD EQUITY, ESTABLISH LONG-TERM STABILITY, AND SHELTER HOMEOWNERS FROM SOME INFLATIONARY PRESSURES, THEREBY CONTRIBUTING TO COMMUNITY RESILIENCE;

(f) THERE IS A CRITICAL NEED TO INCREASE THE PRODUCTION AND AVAILABILITY OF STARTER HOMES. AS REPORTED BY THE PEW RESEARCH CENTER, NATIONAL TRENDS INDICATE THAT THE REDUCTION IN NEW HOUSING DEVELOPMENT HAS BEEN MOST PRONOUNCED AMONG STARTER HOMES.

CORPORATION IN A RESEARCH BRIEF TITLED "HOUSING SUPPLY: A GROWING DEFICIT," THE SHARE OF ENTRY-LEVEL HOMES IN OVERALL RESIDENTIAL CONSTRUCTION HAS DECLINED FROM APPROXIMATELY FORTY PERCENT IN THE EARLY 1980S TO APPROXIMATELY SEVEN PERCENT IN ACCORDING TO THE FEDERAL HOME LOAN MORTGAGE

(g) ACCESS TO AFFORDABLE HOMEOWNERSHIP GENERALLY YIELDS BENEFITS BEYOND PROVIDING SHELTER. ACCORDING TO HABITAT FOR HUMANITY, CHILDREN IN FAMILIES THAT OWN THEIR HOMES ARE MORE LIKELY TO COMPLETE HIGH SCHOOL AND PURSUE POST-SECONDARY EDUCATION COMPARED TO THEIR PEERS IN FAMILIES THAT RENT HOMES.

ADDITIONALLY, HOMEOWNERSHIP CORRELATES WITH GREATER CIVIC AND SOCIAL ENGAGEMENT, INCLUDING INCREASED LIKELIHOOD OF VOTING IN LOCAL ELECTIONS AND PARTICIPATING IN NEIGHBORHOOD AND COMMUNITY ASSOCIATIONS; AND

(h) LAND COSTS ARE AN IMPORTANT CONTRIBUTOR TO OVERALL HOUSING COSTS, AND ENABLING LARGER LOTS TO BE SUBDIVIDED AND SHARED BETWEEN MULTIPLE HOMES SUPPORTS THE CREATION OF STARTER HOMES AND LOWER-COST HOUSING.

(2) THEREFORE, THE GENERAL ASSEMBLY FINDS, DETERMINES, AND DECLARES THAT:

(a) THE AVAILABILITY OF AFFORDABLE HOUSING IS A MATTER OF MIXED STATEWIDE AND LOCAL CONCERN;

(b) COLORADO HAS A LEGITIMATE STATE INTEREST IN MANAGING POPULATION AND DEVELOPMENT GROWTH AND ENSURING A STABLE QUALITY AND QUANTITY OF HOUSING FOR ALL COLORADANS, AS THIS IS AMONG THE MOST PRESSING PROBLEMS CURRENTLY FACING COMMUNITIES THROUGHOUT THE STATE; AND

(c) LOCAL GOVERNMENT POLICIES THAT LIMIT THE CONSTRUCTION OF A DIVERSE RANGE OF HOUSING IN AREAS SERVED BY INFRASTRUCTURE EFFECTIVELY CREATE HOUSING SUPPLY SHORTFALLS AND UNSUSTAINABLE DEVELOPMENT PATTERNS, AND THEREFORE REQUIRE A STATEWIDE SOLUTION.

29-35-502. Definitions.

AS USED IN THIS PART 5, UNLESS THE CONTEXT OTHERWISE REQUIRES:

(1) "EVIDENCE OF DEBT" HAS THE MEANING SET FORTH IN SECTION 38-38-100.3 (8).

(2) "EXEMPT LOT" MEANS A LOT THAT IS:

(a) NOT SERVED BY A DOMESTIC WATER AND SEWAGE TREATMENT SYSTEM, AS DEFINED IN SECTION 24-65.1-104 (5);

(b) SERVED BY A WELL THAT IS NOT CONNECTED TO A WATER DISTRIBUTION SYSTEM, AS DEFINED IN SECTION 25-9-102 (6);

(c) SERVED BY A SEPTIC TANK, AS DEFINED IN SECTION 25-10-103 (18); (d) LOCATED WITHIN AN AIRPORT INFLUENCE AREA, AS DEFINED IN SECTION 29-35-103; OR (e) HISTORIC DISTRICT.

A HISTORIC PROPERTY THAT IS LOCATED OUTSIDE OF A

(3) "LIENHOLDER" MEANS THE HOLDER OF AN EVIDENCE OF DEBT.

(4) "LOT SPLIT" MEANS THE PROCESS OF SUBDIVIDING AN ORIGINAL LOT INTO TWO NEW LOTS.

(5) "SUBJECT JURISDICTION" MEANS A MUNICIPALITY THAT:

(a) HAS A POPULATION OF ONE THOUSAND OR MORE, AS REPORTED BY THE STATE DEMOGRAPHY OFFICE; AND

(b) IS WITHIN A METROPOLITAN PLANNING ORGANIZATION.

29-35-503. Lot splitting approval by subject jurisdictions.

(1) EXCEPT AS PROVIDED IN SECTION 29-35-504, ON OR AFTER DECEMBER 31, 2027, SUBJECT TO AN ADMINISTRATIVE APPROVAL PROCESS AND IN ACCORDANCE WITH THIS PART 5, A SUBJECT JURISDICTION SHALL APPROVE A LOT SPLIT OF AN ORIGINAL LOT INTO TWO NEW LOTS IF THE FOLLOWING CONDITIONS ARE MET:

(a) THE LOT SPLIT DOES NOT CREATE A NEW LOT THAT IS SMALLER THAN ONE THOUSAND TWO HUNDRED SQUARE FEET IN AREA;

(b) IF THE TWO NEW LOTS ARE NOT EQUAL IN AREA, THE AREA OF THE SMALLER OF THE TWO NEW LOTS IS EQUAL TO OR GREATER THAN THIRTY PERCENT OF THE AREA OF THE ORIGINAL LOT;

(c) THE ORIGINAL LOT WAS NEVER SUBJECT TO ANOTHER LOT SPLIT APPROVED THROUGH AN ADMINISTRATIVE APPROVAL PROCESS IN ACCORDANCE WITH THIS SECTION;

(d) RESIDENTIAL USE IS ALLOWED ON THE ORIGINAL LOT;

(e) IT IS FEASIBLE FOR:

(I) BOTH OF THE NEW LOTS TO BE ACCESSED DUE TO ABUTMENT TO A PUBLIC OR PRIVATE STREET OR BY USE OF AN ACCESS EASEMENT, WHICH MAY INCLUDE SHARED COMMON ACCESS;

(II) UTILITY EASEMENTS TO SERVE BOTH NEW LOTS; AND

(III) BOTH NEW LOTS TO MEET THE REQUIREMENTS OF ARTICLES 50, 51, 52, AND 53 OF TITLE 38;

(f) THE ORIGINAL LOT IS NOT AN EXEMPT LOT; AND

(g) THE ORIGINAL LOT IS NOT LOCATED WITHIN A COMMON INTEREST COMMUNITY, AS DEFINED IN SECTION 38-33.3-103 (8), THAT WAS CREATED ON OR BEFORE DECEMBER 31, 2027.

(2) IN ACCORDANCE WITH SUBSECTION (1) OF THIS SECTION, A SUBJECT JURISDICTION MAY ESTABLISH PROCEDURES TO REVIEW AND ACCEPT INFORMATION RELATED TO A PROPOSED LOT SPLIT, INCLUDING LOT INFORMATION RELATED TO:

(a) PROPERTY OWNERSHIP;

(b) PHYSICAL CHARACTERISTICS OF THE LOT, INCLUDING GEOLOGY AND SOILS;

(c) PROPOSED NEW LOT LINES AND NEW LOT AREAS;

(d) ADEQUACY OF WATER SUPPLY, SEWER SERVICE, AND DRAINAGE SYSTEMS TO SERVE THE NEW LOTS;

(e) ADEQUACY OF ELECTRIC POWER AND NATURAL GAS SERVICE TO SERVE THE NEW LOTS;

(f) DEDICATION FOR SCHOOLS, PARKS, STREETS, AND OTHER PUBLIC AREAS, OR PAYMENT OF MONEY IN LIEU OF SUCH DEDICATION; AND

(g) GUARANTEES OF NECESSARY PUBLIC IMPROVEMENTS.

(3) NOTHING IN THIS SECTION PREVENTS A SUBJECT JURISDICTION FROM:

(a) APPLYING AND ENFORCING A LOCAL INFRASTRUCTURE STANDARD, TRANSPORTATION, OR PUBLIC WORKS CODES;

INCLUDING A STANDARD RELATED TO UTILITIES,

(b) APPLYING AND ENFORCING A LOCAL LIFE SAFETY CODE, INCLUDING A BUILDING, FIRE, UTILITY, OR STORMWATER CODE;

(c) APPLYING AND ENFORCING A REGULATION RELATED TO HUMAN AND ENVIRONMENTAL HEALTH AND SAFETY, INCLUDING OIL AND GAS SETBACKS, FLOODPLAIN REGULATIONS, AND AIRPORT INFLUENCE AREAS;

(d) APPLYING AND ENFORCING A LOCAL REGULATION RELATED TO DEVELOPMENT, INCLUDING STORMWATER, IMPERVIOUS SURFACE AREA, AND BUILDING COVERAGE STANDARDS;

(e) ADOPTING GENERALLY APPLICABLE REQUIREMENTS FOR THE PAYMENT OF IMPACT FEES OR OTHER SIMILAR DEVELOPMENT CHARGES, IN ACCORDANCE WITH SECTION 29-20-104.5, OR FOR THE MITIGATION OF IMPACTS IN ACCORDANCE WITH PART 2 OF ARTICLE 20 OF THIS TITLE 29;

(f) REQUIRING A STATEMENT BY A WATER OR WASTEWATER SERVICE PROVIDER REGARDING THE PROVIDER'S CAPACITY TO SERVICE A PARCEL;

(g) ENACTING OR APPLYING A LOCAL LAW CONCERNING A SHORT-TERM RENTAL, AS DEFINED IN SECTION 29-35-402 (19); OR

(h) APPLYING THE DESIGN STANDARDS AND PROCEDURES OF A HISTORIC DISTRICT TO A PARCEL LOCATED WITHIN A HISTORIC DISTRICT.

(4) A SUBJECT JURISDICTION:

(a) SHALL NOT APPLY A SETBACK STANDARD THAT REQUIRES A SETBACK FROM THE LOT LINE ADJOINING TWO NEW LOTS CREATED THROUGH A LOT SPLIT IN ACCORDANCE WITH THIS SECTION IF NO STRUCTURE EXISTED ON THE ORIGINAL LOT IMMEDIATELY PRECEDING THE LOT SPLIT; AND

(b) MAY APPLY A SETBACK STANDARD THAT REQUIRES A SETBACK FROM THE LOT LINE ADJOINING TWO NEW LOTS CREATED THROUGH A LOT SPLIT IN ACCORDANCE WITH THIS SECTION IF A STRUCTURE EXISTED ON THE ORIGINAL LOT IMMEDIATELY PRECEDING THE LOT SPLIT AND IF THE SETBACK IS EQUAL TO OR LESS THAN FIVE FEET.

(5) NOTHING IN THIS PART 5 SHALL BE CONSTRUED TO SUPERSEDE, INVALIDATE, OR LIMIT THE ENFORCEABILITY OF PRIVATE COVENANTS, CONDITIONS, OR RESTRICTIONS RECORDED AGAINST THE ORIGINAL LOT, EXCEPT AS EXPRESSLY PROVIDED BY LAW.

29-35-504. Consent of lienholder required prior to lot split.

(1) IF AN ORIGINAL LOT OR ANY STRUCTURE BUILT ON THE ORIGINAL LOT IS SUBJECT TO AN EVIDENCE OF DEBT, THEN PRIOR TO APPROVING A LOT SPLIT IN ACCORDANCE WITH SECTION 29-35-503 (1), A SUBJECT JURISDICTION SHALL VERIFY THAT THE LIENHOLDER HAS RECEIVED NOTICE OF THE PROPOSED LOT SPLIT AND HAS CONSENTED TO THE LOT SPLIT IN WRITING. THE LIENHOLDER MAY CONDITION CONSENT TO THE LOT SPLIT ON THE SATISFACTION OF CONDITIONS SPECIFIED BY THE LIENHOLDER.

THE WRITTEN CONSENT OF THE LIENHOLDER MUST BE EXECUTED IN A FORM THAT IS ELIGIBLE FOR RECORDING IN THE REAL PROPERTY RECORDS OF THE COUNTY IN WHICH THE ORIGINAL LOT IS LOCATED AND MUST INCLUDE THE FOLLOWING:

(a) THE NOTARIZED SIGNATURE OF THE LIENHOLDER OR THE AGENT OF THE LIENHOLDER;

(b) THE NAME OF THE RECORD OWNER OR GROUND LESSEE OF THE ORIGINAL LOT;

(c) THE LEGAL DESCRIPTION OF THE ORIGINAL LOT;

(d) THE IDENTITIES OF ALL PARTIES WITH AN INTEREST IN THE ORIGINAL LOT AS REFLECTED IN THE REAL PROPERTY RECORDS, INCLUDING ANY EASEMENTS AND ENCUMBRANCES.

THE WRITTEN CONSENT OF THE LIENHOLDER MUST BE RECORDED IN THE OFFICE OF THE COUNTY RECORDER OF THE COUNTY IN WHICH THE ORIGINAL LOT IS LOCATED.

(4) IF THE LIENHOLDER DOES NOT PROVIDE WRITTEN CONSENT TO THE LOT SPLIT IN ACCORDANCE WITH THIS SECTION, THE SUBJECT JURISDICTION SHALL NOT APPROVE THE LOT SPLIT. A LOT SPLIT THAT IS APPROVED BEFORE THE WRITTEN CONSENT OF THE LIENHOLDER HAS BEEN OBTAINED AND RECORDED IS VOID.

SECTION 2.

Safety clause. The general assembly finds, determines, and declares that this act is necessary for the immediate preservation of the public peace, health, or safety or for appropriations for the support and maintenance of the departments of the state and state institutions.