Boulder’s leaders make late push on housing policy — and it’s a big one

Courtesy City of Boulder

Saturday, Sept. 9, 2023

Update: Changes to zoning were unanimously approved Sept. 21. A vote on new rules for affordable housing is scheduled for Nov. 2

When Boulder’s elected officials sat down nearly two years ago to decide what they wanted to get accomplished, one theme dominated the conversation: housing. Seven of their 10 top priorities were in some way housing-related. 

So far, city council has knocked out two major items: reforming occupancy limits and loosening the rules on accessory dwelling units. In the few remaining weeks of their term, they’ll tackle Boulder’s zoning rules and affordable housing program, representing one of the most significant shifts to the city’s housing approach in recent years. 

Leaders hope the package of changes will reverse the trend of large, expensive luxury units and encourage more, smaller dwellings — including elusive middle-housing (townhomes, duplexes, triplexes, etc.) that has become nearly extinct in many cities, including Boulder, as changing regulations favored and often explicitly outlawed anything but standalone, single-family homes. 

Just 9% of Boulder’s housing stock is middle-housing, according to city staff. Such dwellings are not allowed in 75% of city land that is zoned for housing. 

47,037 housing units in Boulder
– Single-Family Detached: 18,736 (37.8%)
– Single-Family Attached (Duplex, Triplex, Townhome): 4,254 (9%)
– Multi-Family Attached (Condo, Apartment): 22,951 (48.8%)
– Manufactured Housing: 1,096 (4.4%)

A vote and public hearing on zoning changes is scheduled for Sept. 21 (council approved them on first reading Thursday); changes to inclusionary housing (discussed this week) will be voted on Nov. 2. 

Here’s what’s on the table: 

Single-family zoning

Perhaps the biggest change would be allowing duplexes and triplexes in addition to single-family homes IF current density rules (as laid out in the Boulder Valley Comprehensive Plan) are followed. 

Allowable density under BVCP
– Very Low Density Residential [RR zones] = Less than 2 dwelling units per acre
– Low Density Residential [RE, RMX, RL zones] = 2 to 6 dwelling units per acre
– Medium Density Residential [RM, RMX zones] = 6 to 14 dwelling units per acre
– High Density Residential [RH zones] = More than 14 dwelling units per acre

Attached dwellings would have to follow existing aesthetic rules (known as form and bulk standards; it covers things like building height and yard size) that govern single-family homes, so as to achieve a similar look and feel.

“Staff anticipates minimal impact to character as a result of allowing these housing types,” they wrote in notes to council.

The city is looking at three zones, specifically: Residential Low (RL) Residential Rural (RR) and Residential Estate (RE). Together, they make up more than one-third of land where housing is allowed. 

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Allowing duplexes and triplexes in these zones could result in, at most, 1,600 extra homes — if every eligible property was redeveloped to the current allowable maximum density.

Staff is not recommending that additional units be designated affordable. (Extra dwellings do still have to contribute to the city’s affordable housing fund, however.) The red tape and limitations associated with affordable housing would deter property owners, they argue, undermining the goal of the changes.

“Property owners would likely avoid such administrative process(es) and just move forward with a subdivision to enable new single-family homes that would not be subject to such a deed restriction,” staff wrote. 

Other proposed tweaks are similarly meant to ease the regulatory burden. Smaller projects with 100% middle-housing would be able to skip site review, a process that requires approval by Planning Board and, potentially, city council. (It would still be required for developments with 20+ dwellings and/or on sites larger than two acres. Similarly, any request for changes to height and/or setbacks would trigger site review.)

Density limitations

Likely more impactful to the city’s housing and affordable housing stock are changes to rules specifically meant to limit the amount of homes in a given area. The regulations have led to the (perhaps unintended, perhaps not) consequence of larger and more expensive units being built — and less affordable housing. 

City council famously ran into the limitations of current regulations at Diagonal Plaza and the Papilio redevelopment at Spruce and Pearl. Because Boulder requires a certain amount of open space per unit, developers are restricted in how many homes they can build based on how much land they have to build it on. 

On smaller parcels, this can severely limit not only the total amount of housing, but also the number of affordable homes as well since, as a percentage requirement, it scales along with the total unit count. At Diagonal Plaza, for example, a rule change by city council increased the total housing by 162 and affordable units by 40.

“Effectively,” staff wrote in notes to council, “the more housing that can be provided in projects, the more deed-restricted affordable units would be added to the city’s housing stock or the more in-lieu fee equivalents would be added to the Affordable Housing Fund.”

Staff’s proposal would replace the per-dwelling open space rule with per-site requirement, and a similar rule on lot area per dwelling unit with something called Floor Area Ratio (essentially, it says how much of a given site can be developed). Requirements will vary by zone, but developments will require between 15% and 40% open space per site. 

Per existing code, and not recommended to change, any buildings over 45 feet in height must reserve at least 20% of the site as open space. 

Open space in this context = outdoor space. It should not be confused with Capital-O Open Space; that is, natural area for conservation, recreation or agriculture.

Affordable housing 

Another change in the way Boulder calculates how much money developers pay into affordable housing will have similar impacts. Currently, the city charges the inclusionary housing fee per dwelling; the more units, the higher the fee. Fewer units = smaller fees.

A consultant recommended moving to a per-square-foot fee of $40 to $50, to be adjusted every year in conjunction with construction costs. The change will not result in more money overall, staff and consultants cautioned, but it will (hopefully) move the city away from fewer, larger units that lower their costs.

“A lot of programs are moving in the direction” of fees based on square footage,” said David Doezma, of Keyser Marston Associates, at Thursday’s council meeting. “It’s considered best practice. You don’t create the incentive to build very large units, or the disincentive to build smaller, more affordable market-rate units.”

KMA’s analysis confirmed what staff have told elected officials over the years: financially and legally (to avoid running afoul of the state’s rent control laws), Boulder is charging as much as it can.

 “If we decide to go much higher, they will build in some other community,” said Housing and Human Services Director Kurt Firnhaber. “That’s the most we can extract, so let’s not mess with that.”

Middle-income incentives rejected

Consultants also recommended that Boulder reassess its approach every 3-5 years for effectiveness. The last update to affordable housing regulations was in 2018, and one part of the city’s approach is clearly not working: for-sale (that is, not rentals) homes that are affordable to middle-income earners. 

Boulder currently has ~800 for-sale, price-capped homes; about half its goal of 1,500 by 2030. It adds about 10-12 per year, according to Firnhaber, the majority of which are older homes purchased by the city. 

“Current incentives to encourage on-site development of for-sale units have not been effective,” staff noted. “Almost all developments utilize the CIL option.” 

CIL = Cash-In-Lieu, money developers pay instead of building the affordable units that Boulder requires as part of each new development.

Staff recommended lowering the requirement for on-site, for-sale homes from 25% to 15% of total units. Analysis showed that was more financially feasible, and more in line with cash-in-lieu amounts.

I know it seems counter-intuitive,” said Michelle Allen, inclusionary housing manager, “but 25% of nothing is nothing. That’s what we’re getting now.”

However, staff and consultants noted that even these changes would not likely result in significant increases in for-sale, middle-income housing. Factors like a construction defect law and the national trend toward rental development likely play a much bigger role than city policies. 

Boulder could probably expect about 15 extra homes per year under the proposal, Firnhaber said. That wasn’t enough to entice a majority of council members who were worried about the loss of cash-in-lieu funds.

The city likes CIL, because it can use them in combination with state and federal money to build 2-3 times more units than developers could. So for every 10 new middle-income, for-sale units, Boulder would be “losing” the chance to build 25 affordable rentals, according to Firnhaber. That tradeoff was too big for some elected officials to stomach.

“Look at the numbers,” councilman Mark Wallach said. “Look at the number of people waiting in line” for affordable rentals. “That’s the market we oughta be serving. If we’re looking at 2-for-1 or even greater swap, I would rather serve better the affordable rental” demand.

We are having a middle-income (housing crisis,” too, Rachel Friend countered. “We don’t see the list because they’re moving out of town.”

She, Tara Winer and Matt Benjamin voted to continue with staff’s recommendations, but were unable to gain support. Staff may suggest alternative incentives before a vote. 

McMansion fee?

Council gave the green light to study a possible fee on larger homes that replace more modest single-family houses. Officials have for years been frustrated by the demolition of older, smaller homes replaced by so-called McMansions, a phenomenon referred to as “scrape-and-replace” or “pop-and-scrape.” Caps on home sizes were considered by multiple city councils but ultimately abandoned

The new proposals takes a different approach: Larger homes would still be allowed, but they would have to pay into the city’s affordable housing fund. Details would be determined by a Nexus study, which is undertaken for any proposed city fees.

Property owners already have to do that anytime they add housing, but projects with four or fewer homes are often granted a waiver. 

As a result,” staff wrote, “almost all newly constructed single-family homes in the city are exempt from affordable housing requirements.”

The study would be conducted next year. 

Parking requirements

Part of ongoing (and likely to continue) parking reforms, staff suggested that Boulder require one parking space for one-bedroom apartments. Currently, 1.25 spaces must be provided per unit. 

Staff is also recommending that projects be allowed to reduce required parking by up to 25% without going through site review. Currently, any reductions require site review, which include appearances before Planning Board and sometimes council.

Parking reform has been a big topic of discussion on the campaign trail, with many candidates pledging to re-examine Boulder’s rules.

“This is one of the silliest laws the city has,” Bob Yates said at an August candidate forum. “We always give a waiver” when developers ask.

— Shay Castle, @shayshinecastle

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