Opinion: Co-op ordinance has fundamental problems


Boulder’s current draft ordinance for co-operative housing units (“co-ops”) has a very long way to go to balance the desires and concerns of the various parties while preserving Boulder’s neighborhoods.
There are big problems with trying to allow co-ops to operate in rental units. It is almost impossible to objectively distinguish a co-op from an over-occupied rental. Saying, “I know one when I see one,” the current city mantra, does not provide a bright line for enforcement officers or the courts. Allowing a third party that promotes co-ops to “certify” them is crazy, because they are likely to approve questionable groups just to gain constituents. Requiring the co-op groups to be incorporated will just create a cottage industry to do the paperwork, no doubt funded by landlords interested in higher occupancies and rents, but providing no particular benefit to the neighbors. Finally, allowing rental co-ops will accentuate the conflicts between landlords and neighboring owner-residents.
The ordinance’s rent-control provision has significant issues, including its questionable legality since rent control is mostly forbidden in Colorado. The rent cap is currently proposed at 110 percent of comparable rents in similar buildings averaged over the whole city; the extra 10 percent is to allow for increased wear and tear by more residents. But setting limits based on city-wide averages just creates an economic incentive to do co-ops in the few remaining relatively affordable neighborhoods and use up their single-family housing. Of course, without rent caps, most affordability benefits will be lost. And if co-op licenses are owned by groups rather than tied to the property, as some have proposed, the wealthiest co-op groups will outbid others for the available locations, further invalidating any affordability benefit.
The ordinance speaks of “neighborhood compatibility,” but lacks a comprehensive set of appropriate standards. For example, in spite of the city’s overall push to limit auto use, the restrictions on cars are weak, allowing four cars per co-op, all of which can be parked on the street. This is more than what most families have. And since the occupants might actually own eight or 10 cars, enforcement of this requirement will require every neighborhood to have a strictly-enforced parking permit program. Off-street parking will have to be limited to prevent the yards from becoming parking lots.
Then there is the licensing itself. The staff memo says this was adopted from the rental licensing section of the city code. But there is an essential difference between licensing rentals and licensing co-ops. Rentals are already allowed in most zoning categories, so licensing is just an additional restriction. But if licensing co-ops is OK, will the council next license micro-motels, pot shops, or whatever else a single-family home could be used for? By the way, licensing the group rather than the location solves nothing, since the impacts of co-ops are location-specific; what might be tolerable in a high-density area may not be in a low-density one.

“Grandfathering” existing illegal co-ops is going to create some really big problems. First of all, if “grandfathering” gets a co-op to the head of the approval line, over-occupied rentals posing as co-ops will instantly become very popular with landlords, even more so than the city’s promise to not prosecute them has already induced. Also, apparently the city has not identified the existing illegal co-ops. So what happens if two illegal rental “co-ops”turn out to be closer than allowed by the ordinance’s minimum separation distance? Do they both get approved? And what if there are more co-ops in a given neighborhood than the ordinance would allow for the foreseeable future under the ordinance’s rate restriction? Does the neighborhood have to put up with this glut, just because the council passed the ordinance without knowing what was on the ground?
City staff apparently failed to notice that some neighborhoods have HOA rules or covenants that prevent homes from being turned into co-ops. Is the city going to take them to court to attempt to void these rules? Or will the city respect their agreements, and end up with the other neighborhoods as sacrifice zones?
Finally, the city acknowledges that current enforcement is inadequate, so why should anyone expect better with co-ops? But there is a solution: Give the immediate neighbors a vote as part of the co-op licensing process. If the co-op can’t garner approval of 75 percent of its neighbors when their license comes up for renewal, which should be every two years, not every four as currently written, then they’re out. Simple, and effective!


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