Policy Documents: Housing and Transportation – Two big unmet costs of growth


The situation is depressingly simple – new development imposes costs that it doesn’t pay for. So either the rest of us pick up the tab, or the situation gets worse.

To unpack this a bit, every new employee requires housing, which pushes up housing prices. We are at the point now where over 50% of new employees would need a very significant financial help to live in Boulder, or even in the rest of the county. So you understand the math, if the average new employee in a particular type of business requires 100 sq. ft. of floor space, and it costs $100,000 to buy down the price of a new housing unit to make it affordable for that average worker, that’s $100 per sq. ft. And per Keyser Martsen Associates, a very well respected California firm that has done numerous such studies, the actual cost to provide affordable housing for new office workers in Boulder is $129.49 per sq. ft. (as of two years ago), with other types of uses varying from slightly higher to considerably lower. The current fee is $12, less than 10% of the actual cost! So it’s clear, both case law and Colorado statutes limit such fees to just what it takes to prevent growth from making the current situation worse, and the KMA fees were calculated on that basis.

To see if new office development can really afford this, I looked at Pearl West, the oversized development at 11th and Pearl. According to Lou Della Cava, one of Boulder’s most successful developers, this building would sell for $550-$800 per sq. ft. (Daily Camera, 6/11/16) Land costs were about $77 per sq. ft., and permit fees were around $11 per sq. ft. To get a cost comparison, a recent Denver 40 story building at 1144 15th cost $213 per sq. ft. all-in. So, even including an outrageous extra $100 per sq. ft. to get through the City’s arbitrary and capricious site review process, we’re talking profits in the $150-$400 range, plenty of room to pay for affordable housing for workers. (Hopefully, council member Sam Weaver’s effort to institute sub-community planning succeeds. Then we’ll have real zoning again, and get rid of the essentially limitless site review process, providing much needed certainty for both residents and builders.)

Not every project has this type of margin; certainly some non-profits might need help. But there’s nothing to stop the City from pitching in some tax money, which it does already to help any number of non-profits provide valuable services. But if affordable housing is the top priority, as it seems to be, then let’s at least keep new commercial development from making things worse. With 60,000 people in-commuting, it’s not as if we need more jobs!
The transportation situation is depressingly similar. The City’s Transportation Master Plan does not have a plan to prevent our traffic situation from getting worse. To be fair, there are a lot of good things in the TMP, but the fundamentals are simply not there. When the Transportation staff came to present to the group working on development impact fees in 2016, I asked for the plan on which these fees and other site exactions would be based, and there wasn’t any. That is simply unacceptable. (So it’s clear, development impact fees are the general term, and jobs housing linkage fees are a particular example, as are water and sewer tap fees. Site exactions, like providing Eco Passes to employees, are other requirements that may be placed on new developments.)
To get some idea of how things are going to degenerate without such a plan, I looked at the 30th Street project, which is going to potentially make improvements from Baseline to Pearl. Just the development projects that are already anticipated will increase travel times by 29% northbound, and 22% southbound. These increases are marginally mitigated by adding in a fifth (turning) lane, which of course will force concrete onto peoples’ yards along the way.
The only part of the TMP that actually attempts to price the cost of making things better is what is called the “Vision Plan”. It will cost $429 million over the next 20 years ABOVE current revenues. That would about double the current budget. There are other approaches, like charging for all long term parking and using the revenues to pay people to carpool and vanpool. But until growth starts paying its way, expect things to get a lot worse in Boulder.







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