From the Opinion Panel: Home ownership for the middle class in Boulder

Saturday, April 9, 2022 

Boulder is working to create home ownership opportunities for the middle class. How should the city balance spending and priorities? What is it doing wrong? What does it get right?

 
Doug Hamilton: Think outside the box for affordable housing

Home ownership is likely unattainable for most middle-income earners in Boulder who don’t have substantial wealth. If it is the goal of our city to have an economically diverse population with middle-income housing, we need new solutions. 

The City of Boulder defines middle-income as a person or family earning 80-150% of the Area Median Income (AMI). This means that a family of four can earn between $93,000 and $175,000 per year. Even this relatively high income (nationally), won’t get you far in Boulder.   

Imagine a family of four purchasing a home at the median housing price of $1.5 million. At the current interest rate of around 5% and with a 20% down payment, this family would anticipate a monthly mortgage payment (excluding taxes and insurance) of $6,000. A family of four would need to earn about $240,000 per year to stay below the recommended 30% of monthly income to be spent on housing. Without a down payment of more than 20%, middle-income buyers have been priced out of Boulder. 

Rents aren’t much better but still somewhat affordable. The average 800-square-foot apartment in Boulder is renting for around $2,263 per month, with year-over-year rent increases topping 15% in Colorado. A family of four would need to earn $90,500 to stay beneath the 30% rule — and be comfortable in 800 square feet. Rentals of single-family homes are typically much more expensive.  

Boulder has no programs to help middle-income renters. For buyers, Boulder does have the H2O Program, which allows home buyers to get a $100,000 down payment loan. The program has not had much utilization: Only 82 home seekers have utilized the program since 2000, according to Eric Swanson, Housing Program Manager for the city. 

In 2019, voters approved a measure for a middle-income down payment assistance program. The program, which is scheduled to be reworked and launched in January 2023, has not been implemented and appears unworkable to buyers because the program requires them to make their home permanently affordable, thus limiting how much value they can borrow against to repay the loan.

Zoning laws, demand, building codes, green belts and height restrictions — many of which we like — have led to a situation where the “free” market has failed to provide affordable housing solutions. 

What do we need? We need to look to ourselves as the solution. We should be taxing ourselves to build and maintain affordable housing. The city should lobby the state to increase taxes to pay for affordable housing and end the moratorium on communities passing rent stabilization. It is our right to have the tools to keep our communities livable for the middle class.

Doug Hamilton is a parent, lawyer, engineer and human who believes in free public spaces and a more participatory society. More about Doug.

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Ted Rockwell: Use affordable housing to protect open space

The focus on open space as a top priority in this town is laudable and a model for how to preserve undeveloped land for future generations. The unintended consequences of that prioritization has led to our community being inaccessible for low- and middle-income (and indeed many upper-income) households. 

Lack of affordable housing is a complicated problem currently happening all over the country. Instead of painting at the edges of this issue, the city needs to prioritize housing at the same level as open space to ensure both priorities compliment one another.

The City of Boulder is considering a program that would subsidize home loans for middle-income earners. These city-backed home loans would use metrics pegged to median home prices and median wages. 

The problem with this approach is home prices are far outstripping wage growth in the middle class. In 2018, the median single-family home price in Boulder was roughly $920,000. By April of 2021, the median price was $1,557,500. During that same period, wages in Boulder saw only modest gains, in the range of 7-9%. 

How can Boulder subsidize middle-income homeowners when housing prices increase by 55% in just two years and wages are not keeping pace? It isn’t realistic to think the city can possibly afford to shoulder the difference between what an average worker makes with runaway real estate values. 

I won’t pretend that there is an easy or clever answer to this complex problem, but I do think we should address it with at least as much thought as we have devoted to the protection and preservation of our beloved open space.

Protecting the crown jewel of Boulder, its open space, is a critical factor preventing our community from addressing the housing issue and, by extension, preventing us from being a truly sustainable place to live. Protecting and preserving open space is very important and environmentally smart, but without the ability to easily develop new housing, our middle-class workforce have had to move to outlying areas, most of them commuting into town by car each day. That isn’t a sound strategy for a sustainable community — environmentally or otherwise.

Our community’s experience educating the public about the benefits of open space could be used to do the same for affordable housing. We need to recognize the issues of a lack of affordable housing and the protection of open space are interrelated. We need to bring the intelligence and wisdom we used to protect our wild lands to help create the sustainable community we aspire to be. Affordable, middle-class housing deserves to be treated as a top priority in our community, on an equal footing with open space, and our community’s greatest minds should be working together to find those solutions.

In the ’70s and ’80s, there was a massive campaign to educate people about the importance of open space, leading to the establishment of our Open Space and Mountain Parks department. I would argue something similar must be done today for housing concerns. 

“Protect our open space” was a rallying cry in the late 20th century in Boulder. “Affordable housing to protect open space” needs to be our rallying cry in the early 21st century.

Ted Rockwell is a senior communications and marketing professional specializing in public post-secondary, online and continuing education. More about Ted.

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