Guest Opinion: Emily Reynolds - Increasing Occupancy Limits Won’t Lower Rent

A March 19 Camera staff editorial contained inaccurate assumptions about landlord behavior, if Boulder increases occupancy limits.

The editorial suggested, “…allowing an additional person into a home would allow tenants to split the rent another way and hopefully relieve some financial stress.”

That statement’s obvious, giant flaw is the assumption that somehow, the rent will remain static and unchanged if the landlord is allowed to rent to more unrelated people. Our current City Council also voices this naive, false assumption.

It’s pure fantasy that landlords will keep the rent unchanged, if allowed to rent to more people. Landlords know how to use calculators. No knock against landlords, but let’s be honest, it’s a business and income source for them! Like most businesspersons, landlords understandably seek to maximize revenue and profits, not altruism.

Bedrooms Are For People (BAFP) failed partly because there was no lever within the ballot measure to require affordability. Voters rightfully saw through this, and realized that landlords know how to multiply rent.

A house renting to three people for $4500 a month at $1500 a person, will just rent for $6000 a month at $1500 a person, if allowed to rent to four unrelated persons.

Savvy Boulder residents should understand, as they did with BAFP, that in our crazy sellers’ market for rental properties, any proposal that doesn’t require affordability is unlikely to create it.

I agree with one statement from the Camera’s editorial: “…rent is becoming an ever more exhausting burden.” Precisely. But simply increasing the numbers of renters per unit will do nothing to lessen that burden. In Boulder’s sellers’ market, rent is a moving target that just increases when the number of allowed renters increases.

For evidence, read “Family Displacement in Central Austin,” a report being circulated about Austin, TX’s failure with higher occupancy limits.

 https://www.centralaustincdc.org/fair_affordable_housing/Family_Displacement_in_Central_Austin.pdf

Austin, like Boulder, has very high housing demand. It also has the huge University of Texas which, like CU, doesn’t provide nearly enough housing for its students.

I was stunned to read on page 3 of the report that Austin’s high occupancy units didn’t just fail to lower prices, they actually increased per-person rents. And the high occupancy units created huge displacement of families from neighborhoods, because families couldn’t afford the higher rents. A family with one or two wage earners can’t compete with the rental purchasing power of four adult wage earners. Talk about unintended consequences! We’ll see more families priced out of Boulder, following higher occupancy limits. Family exodus will accelerate already declining BVSD enrollment.

I’m dumbfounded that this Council isn’t, instead, better utilizing the two mechanisms it already has to create permanently affordable housing units. One is Boulder’s commercial linkage fee, which requires developers of new commercial spaces like office parks to help fund affordable housing for the additional workers they bring to town. The other mechanism is inclusionary housing percentage requirements for new residential developments. This Council has made zero increases to these programs during its term!

Note, both of these mechanisms have provided actual relief to renters and buyers, in the form of permanently affordable housing units. It defies explanation that this Council flatly refuses to increase – not even inch up – either of the two highly effective, profoundly successful affordable housing mechanisms it already has.

Instead, Council is pinning its hopes on a wildly speculative, wishful-thinking gamble that landlords will suddenly forget how to multiply, and change their business model from profit to altruism.

If Council increases occupancy limits without real affordability requirements (that have teeth), the only beneficiaries will be landlords laughing all the way to the bank. This level of naivety is extremely concerning.

It’s also strange to hear no mention of Boulder city staff’s recent survey of occupancy limits in 60 peer cities, mostly college towns. (Nearly all college towns have occupancy limits, to maintain some order and sanity.) 60% of the surveyed cities only allow three or fewer unrelated people, and 23 of the cities only allow two unrelated people! So the argument that Boulder’s occupancy limit of three unrelated persons is unusual or extreme is completely specious.


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