On March 28, 2025, the Colorado House passed House Bill 25-1272 on second reading with floor amendments. The bill -- titled the “Colorado American Dream Act” -- seeks to address Colorado’s housing crisis by encouraging construction of for-sale multifamily housing, such as condominiums and townhomes, through targeted legal reforms.

H.B. 25-1272 would create a new, voluntary framework under C.R.S. § 13-20-803.3: the Multifamily Construction Incentive Program. Projects built under this program would be governed by a separate set of litigation rules, designed to reduce construction defect claims, and encourage builder participation in the entry-level housing market.

This post provides a comprehensive breakdown of the bill’s key provisions, as amended on second reading, and explains why one new element -- a fee-shifting provision tied to settlement negotiations -- may have unintended and counterproductive consequences. The current version of the bill is available here.