Opinion: What is Boulder’s real affordable housing goal?


As Boulder’s election season cranks up, there is a lot of noise around Boulder’s sacred cow of affordable housing. Fast-growth candidates seem to assert that building more market rate housing will somehow solve “the problem.” Slow-growth candidates seem to be more measured and consider other dimensions to the issue. But the problem is still ill-defined: Is this something that can actually be solved, or a concern that will persist irrespective of the actions taken, or a surrogate for other agendas, or what?
Leaving aside this lack of clarity, the main difficulty we face is that our current affordable housing program relies financially to a large extent on growth of one kind or another. Each new housing development must provide 25% on-site affordable units or pay fees-in-lieu for off-site units. Business development pays jobs-housing linkage fees that cover a bit less than a quarter of the cost of providing housing for workers who need it. A minor portion comes from local taxes and federal housing tax credits.
The Boulder City Council has set a goal of 15% permanently affordable housing by 2035. To put this in perspective, even assuming the relatively high percentage of newly affordable units (both new construction and existing units) over the last five years can be maintained, meeting this goal would require a more than doubling of our population and job growth rates from the current approximately 7.8%.
And current favorable conditions are not likely to persist: Boulder Junction is approaching build-out; market prices are appreciating, so buying down the cost of existing units will get more expensive; the radical increase in the U.S. national debt may cost us both the tax credits and an interest rate bump; and changes to the city’s land use tables will reduce office construction, which will cut into linkage fee revenues. So the 2035 goal may require a near tripling of what growth rates might have been otherwise; that won’t fly with most citizens I know.
Worse, to even maintain our current economic distribution, over 50% of new units would have to be permanently affordable to people below the area median income. But we’re only getting a fraction of that. In other words, although growth helps increase the percentage, we keep getting further behind in absolute terms.
Unfortunately, the notion of using affordable multi-unit housing to significantly reduce in-commuting isn’t realistic. Survey data suggests that most commuters live outside Boulder for all sorts of reasons, including the availability of relatively reasonably priced single-family housing.
Assuming we run out of enthusiasm for growth well before our elusive goal is accomplished, the germ of a solution may lie in the middle-income pilot program financed by the $10 million/10-year borrowing that the City Council is asking voters to approve with Ballot Issue 2I. The idea is simple: Home buyers receive an up-front financial benefit in exchange for a future financial cost. Under 2I, the up-front benefit is a down payment loan (with possibly a lower interest rate) and the future cost is a deed restriction on the sale price appreciation of the unit. How many borrowers will take the city up on this will of course depend on the specifics. But the city can adjust the deal terms, so it will be a good experiment to see what works.
The long-term strategic value is not in the details but in the concept of paying up front for a commitment to limit appreciation in the future. For example, the purchaser of a single-family or multi-unit property could receive a payment up front in exchange for permanently limiting the sales or rental price appreciation to 0%. Then, as normal inflation occurs, the housing would become more and more affordable over time. It won’t make much difference in the first few years, but if inflation is 2% per year, over 20 years, the real cost will drop by about one third, making it much more affordable. Apparently, federal tax credits could also be used, making this even a better deal.
The up-front payments would not be insignificant. But it’s much cheaper than trying to make units immediately affordable. And if this is maintained over multiple decades, we can keep increasing both the percentage of affordable units and their absolute affordability. Once the pilot program has provided the necessary data, the Council could propose an affordable housing tax based on this no-growth model. I suspect that the voters would support such a long-term inclusivity effort, both because of its social benefits and because it doesn’t require any increase in jobs or population.


Popular Posts

Opinion: Opportunity for the new Boulder City Council

Congratulations to the four new Boulder City Council members! You have a great opportunity to make a contribution to the Boulder community, but it will take a lot of work to do it responsibly; the learning curve is pretty steep. Here are some suggestions for you (and other Council members) that may help improve the process. Read the Charter. It is the document that governs how you, city staff, and board and commission members operate, and how you relate to each other. It defines the limits of your and their power, and can only be amended by a citizen vote. You don’t have to remember every word. But just knowing what’s there makes you more self reliant and less at the mercy of others’ opinions. For example, relative to the recent meeting discussion over diversity, the council does  not  have the power to suspend the rules as to when the mayor is selected. Charter Section 14 specifies, “The mayor shall be chosen by the council from its own number, upon the convening of t...
Read more

Opinion: Is this the end of Boulder as we know it?

Much of what has made Boulder such a great place to live has been the work of people half a century ago. These people recognized what I call the “ ratchet effect ,” that bad development decisions cannot be undone, so policies needed to be put in place to prevent, or at least limit, the damage that a growth-at-all-costs majority of the council could do. These policies include charter limits, like the Blue Line that prevents city water for development from being supplied above a certain altitude, the 55-foot height limit that has prevented high-rise development from cutting off our views, and the open space referendum process that allows a 60-day window for citizens to challenge disposals of open space. Other constraints include the Boulder Valley Comprehensive Plan’s requirement for Planning Board agreement for land-use changes in the area inside the city limits (Area I) and additional agreement by the county commissioners and county Planning Commission for urban development further...
Read more

Policy Documents: Impact Fees and Adequate Public Facilities

I am writing this to correct some of the apparent inaccuracies put forward at the 10/14 CC/PB study session about charging growth for its costs. I do not claim to be an expert in the field, but I have studied it long enough and consulted with enough supposed experts and legal types to understand most of the basics. In addition, I have found that the experts don’t necessarily know everything and won’t necessarily put forward the most appropriate solutions. The fundamental rule, both legal and equitable, is that growth should pay to address its impacts so as to maintain existing levels of service (LOS) for existing residents and businesses. But growth cannot be required to improve levels of service. LOS is measured in all sorts of ways depending on the facility and/or service being measured. For transportation, it could be total VMT, travel time, intersection waits, access to transit, etc. For schools, it might be square footage per pupil, etc. For water, it could be water righ...
Read more