[bouldercouncilhotline] Hotline: Nod of 5 Request for Staff to Review Equity Co-op Ordinance

[cmosupport at bouldercolorado.gov]

Sender: Jones, Suzanne


Dear Colleagues,
As a bookend to our conversation at tomorrow night’s Council meeting about enforcement of occupancy limits, Andrew and I would like to get Council approval to consider moving forward on amending our existing co-op ordinance to improve the chances that equity co-ops become a viable housing option in Boulder.   

As you know, even though we have an ordinance to allow for the establishment of equity co-ops in Boulder, we currently have only three legal co-ops in town because of the difficulty in meeting the thresholds in the existing ordinance. This issue has been on the Council work plan for over two years, and yet it keeps getting sidelined by larger housing discussions. Equity co-ops—where the building is owned by a non-profit such as BCH or the residents of the household—are by nature likely to be self-constrained in number, but still provide unique and important housing choice that allows residents to live together in a more sustainable and less impactful manner that does not adversely impact (and may well strengthen) the fabric of a neighborhood. The Boulder Housing Coalition has made specific recommendations about how the existing ordinance could be improved (pasted below), which provide a good starting point for this conversation. 

To that end, we are specifically asking for a Nod of 5 from Council to direct city staff to review BCH’s suggested amendments and make recommendations to the next Council about how to improve our existing co-op ordinance to facilitate equity co-ops. 
(Please note: equity co-ops are separate from the larger question about rental co-ops and occupancy limits, which should rightly be addressed as part of a much broader community discussion regarding housing, the BVCP update, etc.)

Thanks for your consideration—

Suzanne and Andrew 


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Enabling Private & Group Equity Housing Cooperatives

Neighborhood Concerns:

●  Noise & Property Maintenance:
E​nable equity co­ops via an administratively reviewed use permit, which is perpetual but revocable, and contingent upon compliance with existing property maintenance standards, including the International Property Maintenance Code (IPMC) for occupancy/habitability/safety; and BRC section 10­2.5­6 defining nuisance behavior.

●  Parking & Traffic Impacts: R​equire an
e​nforceable​TDM plan stipulating that no more than 3 vehicles be stored on site for the first dwelling unit, plus up to 1 additional vehicle per each additional dwelling unit. Violation would result in revocation of the co­op permit. These conditions would be written into the co­op’s bylaws and/or the management agreement w/ a non­profit partner. Would also include other TDM measures as as available such as NECOPasses, CarShare, BCycle & Community Cycles memberships, awesome on­site bike facilities, etc.

●  Landlord Exploitation:​In some rental­heavy neighborhoods, there are fears that enabling cooperative housing will result in landlords exploiting the rules in order to legally extract more rent from existing properties, exerting upward pressure on property values, reducing overall affordability.

○  Subordinating Profits: R​equire equity to be held by a cooperatively incorporated entity, or 501(c)3 non­profit organization, both of which would be unattractive to a profit motivated investor.

○  Single Housekeeping Unit:​Require the co­op to operate as a single housekeeping unit: sharing the entire dwelling; living and cooking together; sharing expenses for food, rent, utilities or other household expenses; and being a more or less permanent community. These expectations would be
codified within the cooperative’s bylaws and/or management agreement with a non­profit partner.

○  Barrier to Entry:E​nsure that the requirements
for creating a new cooperative house are surmountable by a responsible, organized group, but significant enough that it would not be pursued lightly (incorporation, bylaws, substantial equity stake required).

○  Rate Limitation:L​imit the rate at which co­ops
can be created to no more than 10 per year (as in the previously adopted co­op ordinance), limiting their potential impact on the overall housing market for the time being.

○  Limitations on non­owner occupation:​As a “functional family” unit, the cooperative would be entitled to house up to a maximum of 2 (or 3, depending on zoning) additional people who were neither members of the equity cooperative, nor represented by shares owned by a non­profit partner.

○  Regular Inspections:​If necessary, we could accommodate regular code enforcement inspections of the cooperative, as is currently required for rental properties.

Cooperative Concerns:

●  Increased occupancy:G​iven compliance with the
above, we want to allow the cooperative to be treated as if it were a related family for occupancy purposes.

●  Ownership:​Allow the cooperative to be owned by any combination of a non­profit and a private equity cooperative. Using a cooperative entity means specifying minimum/maximum equity shares is unnecessary, since co­op governance is one member, one vote. This encourages relatively equal equity contributions per member.

●  Parking: R​equirement of additional off­street parking cannot be accommodated, as it excludes many of the most attractive potential properties.

●  Location:W​e can accept limitations to which parts of the city co­ops can happen in, but need access to thousands of units ­­ reasonable slice of the market overall. We suggest that cooperative housing be an allowed use, with an administratively reviewed revocable permit, in the following zones: RR, RE, RL, RM, MU, RMX, RH, and A, and a conditional use in B, BT, and BR. 

●  Clustering:T​he goal of the proposed regulations is to mitigate all the potential negative impacts. Given that, we would prefer not to have limitations on the number of co­ops per block face, or percentage of properties in a given area, enabling the eventual creation of community housing clusters.

●  In Perpetuity:​In order for non­profits and cooperative entities to put hundreds of thousands of dollars of equity into properties, the use needs to be perpetual and grandfatherable ­­ so long as they remain in compliance with the conditions of the permit.

●  Modification of Existing Properties:​In many cases, a multi­unit building will need to be re­configured to serve as a cooperative household, creating additional bedrooms, and consolidating kitchens and other common facilities. We need this to be allowed under the new administratively permitted co­op land use.