Realtors a Voice for Property Owners as Colorado Advances Broadband - Community Broadband Bits Podcast 370

Elizabeth Peetz: Finding that compromise was easy because in the end we knew we all wanted the same outcome. The question was how do we structure the language to protect everybody's rights.

Lisa Gonzalez: Welcome to episode 370 of the Community Broadband Bits podcast from the Institute for Local Self-Reliance. I'm Lisa Gonzalez. In past episodes, we've talked about broadband's effect on real estate and broadband as real estate, but this week we have a guest from an organization who represents homeowners and that organization works on broadband policy. Elizabeth Peetz from the Colorado Association of Realtors visits with Christopher for this episode. In this discussion, Liz describes the effect broadband has had on the Colorado real estate market and how her organization has become involved in related legislation. She talks about some of the recent changes in state law and the association's opinions on those changes. In addition to easement law for cooperatives, Liz talks about the state's right of first refusal and about Colorado's broadband funding techniques. Liz also offers some sound advice on what folks can do to encourage real estate as a tool to improve broadband policy. Now, here's Christopher and Elizabeth Peetz from the Colorado Association of Realtors.

Christopher Mitchell: Welcome to another episode of the Community Broadband Bits podcast. I'm Chris Mitchell with the Institute for Local Self-Reliance up in Minneapolis, today speaking with Elizabeth Peetz, the vice president of government affairs for the Colorado Association of Realtors. Thanks for coming on the show.

Elizabeth Peetz: Yeah, thanks for having me.

Christopher Mitchell: So let me start with a pretty basic question, which is the Colorado Association of Realtors, what exactly does it do?

Elizabeth Peetz: We are a membership trade association, and we represent over 27,000 realtors across the state of Colorado. And we touch all different areas that affect property rights for both homeowners and our clients, our realtors who buy and sell real estate. So it's water, land use, housing of course, regulatory policy, and you'd be surprised what types of things we get into.

Christopher Mitchell: Right, I think a lot of people would off the bat assume that you would be kind of limited to things that were more directly related to the owning or to the selling and purchasing of homes, but you really are acting in the interest of all homeowners, I think, right?

Elizabeth Peetz: Yeah, that's correct. We're really the voice of real estate for homeownership. The homeowners don't actually have a trade association, so we speak for them.

Christopher Mitchell: Ah, you know, I didn't even think about that. I've been a homeowner for 10 years. I've loved it. I was actually just commenting on how people that put down owning a home, I think there may be doing it wrong because it's the best decision I made. Well I shouldn't say that ⁠— third best decision after wife and child.

Elizabeth Peetz: Makes sense.

Christopher Mitchell: Right? So let me ask you ⁠— you know, I think this is something that a lot of people know that real estate agents have been very interested in broadband in recent years. But let me just ask you a very generic question, which is how has Internet access or the lack of it changed the real estate markets in Colorado?

Elizabeth Peetz: We have been one of those states, like many others, who have a divide between our urban core and our rural areas. So we obviously have plenty of broadband in Denver, but what where we really lacked in having broadband is our rural areas in our mountains and western slope areas. And again, part of that is due to physical infrastructure and getting it down there or up there, but it's also a matter of financing and making sure we're building out the lines. And we don't want any consumers in any of the great, beautiful locations in Colorado to not have access to the Internet. I mean, Internet drives everything we do, from business to personal life to quality of life.

Christopher Mitchell: And I'm curious if you have any anecdotes in particular of — you know, like you said, there's beautiful homes, and in my mind it seems that they would be valuable regardless of how they're connected because of just some of the views and amazing opportunities to be outdoors and things like that.

Elizabeth Peetz: Yeah, it's kind of an interesting thing to think about how much broadband affects us all. So when we think about it from realtors, the reason that we're involved in it is both an issue about conducting regular house buying and selling in the business, but also the clients who make those purchases of homes. Because when you think about it, we need a functioning level of broadband that our rural colleagues who basically have to balance travel and time away from their businesses to be involved in the regulatory policy discussions that determine the future of their profession, but they also need to be able to, when they're showing a home, talk about whether or not there is access to the Internet for their clients because there are so many people who work remotely now. There's so many people ⁠— when you go on a hike in Colorado, you use Internet GPS to figure out where you are.

Christopher Mitchell: Right, I've actually used that to find trailheads and things like that certainly in Colorado myself.

Elizabeth Peetz: Yeah, I mean we use it every day so it's important for every home purchase, but I think our mountain areas really almost need it more than our rural areas because they are doing those outdoor activities and trying to stay involved in their profession, their life, their home, their family.

Christopher Mitchell: So do you see a change in value? I mean, is this an issue in which you see significant swings in value or . . . ? You know, we often about that being one issue or the other is the amount of time a property may sit on the market before there's interest in it.

Elizabeth Peetz: Well, we are in one of those really competitive housing markets. And that's probably true across the whole country, but Colorado specifically has a huge population boom. I think we get more than 80 people moving to the state every month, and because of that, it's a very competitive housing market. And I would say that the broadband itself and the access only increases the value of the home. When we first started working on broadband in our rural areas, there was a huge disparity. Like, one in four households in the rural areas didn't have access to broadband. Now [with] some of the work we've done to improve the infrastructure build out, Colorado is now on track to reach 92 percent of households being covered by broadband, but that's been something we've had to invest in because it wasn't always the case.

Christopher Mitchell: This actually gets us to, I think, your specific job title, which is very much focused on government affairs, and I'm curious at what point the Colorado Association of Realtors began making broadband a priority in working with the legislature?

Elizabeth Peetz: There was a bill way before my time in, like, the early nineties that was quite limiting, but we really became more involved in the last two to three years. In 2018 we started with a bill about financing rural broadband deployment.

Christopher Mitchell: A number of our listeners are probably familiar with the idea of different state programs, and I know Colorado in particular has the universal service program in which the state itself takes money and puts it into historically telephone service and that's switching over to broadband. So you don't have to go into kind of the basics, but I'd love to know the specifics of how you've worked on that.

Elizabeth Peetz: Like you said, we had a fee on voice service, which as you all know, we don't really use voice service anymore. It's more about data usage in terms of how we pay for our broadband. So the legislature started working in 2017 and 2018 on trying to allocate this fee to support the build out of broadband deployment, and it was a broad bipartisan bill. We actually had a member from Durango testify about why it mattered to our state association. He said that, "It's literally the first question I get asked when I'm showing a property in Durango, Colorado. How is the internet coverage?"

Christopher Mitchell: Sorry, just break in for a second, but you know, I've actually been to Durango. It's wonderful. You know, it's stunning. It's a place that I think ⁠— you know, I know that tons of people are moving to Boulder, but I get the impression that Durango's busting at the seams also. And that that's the first question, really it says a lot if you're in Durango and that's your first question.

Elizabeth Peetz: No, exactly. I mean, we all like to get out into the mountains and the quality of life, but more often than not, people are now wanting to live in those beautiful places. So if they have good Internet access, they can still have a regular job and live in a beautiful place without having to be in an urban environment.

Christopher Mitchell: Absolutely. Yup. And this was even ⁠— I mean, you know, this is two years ago now that you're talking about really.

Elizabeth Peetz: Yeah. It's kind of amazing that we were talking about this two years ago, that this hasn't been something that we've been pushing on much further. I will say the legislature had lots of debates, and they never really got to a level of being able to compromise until very recently. So it had been on their radar for a while, but when we finally found the way to move forward to actually fund the build out of broadband, that's when we really saw traction.

Christopher Mitchell: Right. And we've seen ⁠— I mean certainly Governor Hickenlooper has talked about it quite a bit, your state has an office that appears to be quite competent in terms of trying to figure out how to spend the money that's become available, and then there's the historic program. We've actually talked in the past on this show about the Department of Local Affairs. I think it's been a wonderful program there.

Elizabeth Peetz: Yeah. The Department of Local Affairs has a 50 - 50 grant and local government program, and what they're kind of focused on is building the middle mile pipes that allow Internet service providers to tap into later for consumers. They pay for that with royalties on oil and gas mining, which I know is another controversial subject for a different type of audience, but that's where they get a lot of the funding from ⁠— the federal land, oil, and gas mining. And what they do is try to fill the gap between the federal funding with this DOLA local grant opportunity for local governments.

Christopher Mitchell: And so, DOLA has done has done wonderful things. Now, I think Colorado has really gotten into a much more advanced place, particularly in the last year or two. What have your priorities been more recently in the legislature?

Elizabeth Peetz: Yeah, in the last legislative session, we actually opposed an initial draft of a legislative bill. It was Senate Bill 107, and it basically called broadband infrastructure "installation." Essentially, what the bill did ⁠— or does because it did pass eventually ⁠— was outline the obligations and duties of electric utilities, commercial broadband suppliers and property owners related to electric utility easements. And the reason that we kind of got into some opposition is about the way the bill was drafted compared to some other states.

Christopher Mitchell: Right, so if I could jump in for a second. I think this is a subject that I really wanted to get into because I really value your expertise on something that I don't know a lot about. And so, if you look at North Carolina for instance, I think last year when they ⁠— or this year when they dealt with this issue for the rural electric co-ops, I think they basically said, "Hey, if a rural electric co-op has an easement for electricity, boom, they have an easement for Internet also." And that's the sort of thing that I think you're concerned about, and I'd like to know more about why that is a concern because people like me that think only about the Internet, you know, might think, "Well that's a pretty good way of dealing with it. It's all done."`

Elizabeth Peetz: The first thing I would say is the first draft of our legislation actually was not limited solely to electric cooperatives. It applied to every electric utility, and that is different than Indiana and Missouri and Texas and Tennessee that all kind of looked at that. So that's the first distinction. They did fix that and narrow it in.

Christopher Mitchell: Right, I think that's a really important distinction. I'm glad you made that. I was not aware of that.

Elizabeth Peetz: Yeah, our bill was a lot more broad originally than a lot of other states. But I think what gets to the heart of our expertise and our concern as realtors is, how do these easements interact with property rights? So one of the things we've always been very involved in is the Fifth Amendment — whether or not you have just compensation to take private property for a public purpose, right? We all know that Fifth Amendment type of jurisprudence.

Christopher Mitchell: Right, and this is something that my organization, the Institute for Local Self-Reliance, actually has a history on because we are very supportive of homeowner rights and think there should be a very high bar before any land is taken, and we've dealt with that for high voltage power lines and all kinds of other things in our 45 year history. And this is a matter in which, I don't know how much of the audience agrees with us on, but we are squarely in your camp on [that] there should be a high bar.

Elizabeth Peetz: Yes. So what our bill didn't have in it, that we wanted some additional protection in and we were successful in working with stakeholders to amend the bill, was some of the property rights around not just electric easements, but what's a construction easement. So construction can sometimes interfere with a landowner's use of or their enjoyment of their property and typically that's a construction easement, but the electric utility easements usually provide some sort of terms on which construction can occur. So that's kind of why they're related, and our bill did not address this topic of the construction piece. So if the land is damaged when you actually build the broadband, then those homeowners didn't have a remedy for compensation in our bill.

Christopher Mitchell: And this is something that just came up in my private life where I was visiting my inlaws, and they live in northern Minnesota on a major road in which they have an old farm effectively. It's been in their family for a long time and I was sort of fascinated at how the electric company had come through and trim the trees, but not in a way that my inlaws necessarily appreciated or would have done themselves. And so, you know, this is one of those things where I think a lot of us think of an easement as a onetime deal. So you're talking about sort of the one time construction, which is certainly the most likely immediate impact, but there's also longterm impacts. And what you're saying is that, you know, in the event that these electric co-ops are doing something on land that belongs to real people, that those people should be secured against some sort of harm if that were to occur.

Elizabeth Peetz: Yeah, I mean, if you think about Colorado in terms of the different types of property that we have in our state, we have residential homeowners who obviously want to enjoy their property, but we also have a lot of open space that is owned either by a local county government or federal government or owned by a private property owner through a conservation easement to preserve that open land, and we also have agricultural land. So that property is incredibly valued to make sure the use of it can be continued, whether it's for a public good or for a private individual or corporate purpose, so that's why we cared about maintaining property rights and use and enjoyment of property.

Christopher Mitchell: And was this something that you found ⁠— was it a tense negotiation or was it something that just hadn't really been considered from the point of view that you brought to the table?

Elizabeth Peetz: So I think our version of the bill was maybe not stakeholdered as much in the beginning as maybe some other states because when we pointed out this issue that we had with the legislation, the proponents were willing to work with us, and we ultimately got to a place where we could all agree. What we did is put in some notice requirements for property owners, and then we also put in some language to allow evidence to be given by a property owner. If there is any type of damage, they are able to offer that, so the compensation doesn't become just a nominal thing that they're never going to get any value if their property is harmed. They actually have a real remedy. And I think we all want broadband, so finding that compromise was easy because in the end we knew we all wanted the same outcome. The question was how do we structure the language to protect everybody's rights?

Christopher Mitchell: And was this something that — you've obviously been following what's happened in other states, but I'm wondering if this is something that — you know, was this one of the first places in which these negotiations happened in that way?

Elizabeth Peetz: You know, that's a good question. I don't know if this debate arose in other states the way it did in ours. I know we have a lot of electric rural co-ops that also offer their own broadband and we have a lot of cities that offer municipal broadband, so it's possible that this is an issue that is just more heightened in our state given the diversity of property rights that we have and different folks involved in the broadband debates. But I think what I would probably say is like all legislation, if it pops up in one state — a discussion — it usually gets shared with other states and people learn from each other.

Christopher Mitchell: I think that you're living in the future in some ways, and I think other states are going to look at what you did and learn from that.

Elizabeth Peetz: It's highly likely. I mean, we're happy to share. If anyone has any questions, we would love to have the discussion.

Christopher Mitchell: Well, and the other thing I'll ask you about, since we have a few minutes left that we can pad out, is the issue around the right of first refusal for when the state is funding a project. I think Colorado ended up in a really good spot in terms of balancing the interests of the service providers who are incumbents against those who want to build in new areas and areas that appear to be unserved. And I'm curious if you worked on that, if you had any thoughts about it.

Elizabeth Peetz: We're actually really proud of that. It was legislation we worked on in 2018, and that bill is called Leveling the Playing Field for Broadband. It required the Broadband Deployment Board, which is our local regulatory body in the Department of Local Affairs to, when they make decisions, consider criteria of both speed and cost of providing that service, so that telecom companies, when they invoke that first right of refusal, they have to also be competitive in those types of criteria. They can't just say, sorry, we've always had this land. We're going to charge you this x rates. And we're really excited because I think it levels the playing field for a lot of our local consumers.

Christopher Mitchell: I'm just excited to know that you were involved in that because there's a lot of states in which we need to get groups like yours involved more. And so, you know, I'm curious, is there something that — for people like me that are working on these issues, does every state have an association of realtors that's working on broadband now? Or is this still locally determined in terms of how they set their own priorities?

Elizabeth Peetz: So there is a state association of realtors in every state. There's also local boards of real estate or realtors, so you can go to both. The other thing I would say is it's really important to be an informed consumer. So one of the things is whether or not this is listed when you go to buy a house. So in Colorado, here on the MLS, it's not a mandatory field in how you describe the property. It's optional. So what that means is they basically can [add] in an open field comment about, well, is the house wired or does it have Internet, but you can't actually ask them what quality of speed. That's not currently present, but if we start asking for it maybe it will be.

Christopher Mitchell: Is that something that you would think should be required? I believe I've seen a state or two in which they have considered that.

Elizabeth Peetz: You know, I think it's probably up to every state to make that determination. Not every state has an MLS and some people have MLSs that are available for licensees to use, some are accessible by realtors. It really varies, but what I think I would tell you is if consumers start asking those questions and they want that, the market responds to what consumers ask for.

Christopher Mitchell: Right. Sometimes it takes a little time, but you know, nothing comes for free in this world. So let me just also note that I met you from a webinar from the National Association of Realtors, and so thank them for putting us in touch. And thank you very much for coming on the show to to give us a better sense of of how you're involved and on this important issue of easements how to get a good balance.

Elizabeth Peetz: Well, thank you Chris for the opportunity. It's wonderful to hear about the great work that you're doing to expand broadband access yourself.

Lisa Gonzalez: That was Christopher and Elizabeth Peetz from the Colorado Association of Realtors. Learn more about the organization at coloradorealtors.com. We have transcripts for this and other podcasts available at muninetworks.org/broadbandbits. Email us at podcast@muninetworks.org with your ideas for the show. Follow Chris on Twitter. His handle is @communitynets. Follow muninetworks.org stories on Twitter. The handle is @muninetworks. Subscribe to this podcast and the other podcasts from ILSR, Building Local Power and the Local Energy Rules podcast. You can access them anywhere you get your podcasts. You can catch the latest important research from all of our initiatives if you subscribe to our monthly newsletter at ilsr.org. While you're there, please take a moment to donate. Your support in any amount helps keep us going. Thank you to Arne Huseby for the song Warm Duck Shuffle, licensed through Creative Commons, and thank you for listening to episode 370 of the Community Broadband Bits podcast.