[BoulderCouncilHotline] ADU Update - alternative ordinance for tonight

[Sugnet, Jay]

Dear Council Members,
Monday morning CAC requested that staff prepare an alternative ordinance for Wednesday's meeting that captures the ADU affordability proposal from Sam Weaver and Bob Yates. Staff drafted the ordinance showing changes highlighted in yellow (see attached) and below is a summary of several assumptions and potential options for council consideration:

  *   Renters will not be income qualified. The alternative ordinance will not require future ADU renters to verify income. Although this reduces the administrative burden, it does not guarantee that those in need of lower rents will be served. It is important to note that the city does not currently income quality renters, as this is done by our partners who own and manage affordable housing. If council chooses to require income verification, we would need to rely on one our partners to provide that service.
  *   Utilities will be included in the rent limit for affordable ADUs. 85% of ADU owners currently include utilities in the rent. There is technology that allows the tracking of usage separately between the principal dwelling and the ADU, but that would be an additional cost to the homeowner.
  *   Size limits. Currently, the size of a detached ADU is limited to 450 sq. ft. and an attached ADU is limited to 1,000 sq. ft. (or 1/3 the size of the principal, whichever is less). The alternative ordinance allows an increase in size for a detached ADU to increase from 450 to 650 sq. ft. or 1/3 (whichever is less) in exchange for affordability. Attached ADUs would still have the maximum size limit of 1,000 sq. ft., however, for smaller homes the size limit would increase from 1/3 to 1/2 in exchange for affordability.
  *   Determining maximum rent. The ADU affordability proposal discusses using market rents as a benchmark for determining affordable rents. However, staff recommends using the city's current affordable rent methodology as a simple and more scientific approach that is based on standard data sets. Below is a table showing rents that would be affordable to different AMI levels. This is intended to help council determine the appropriate level of affordability for ADUs. The current median rent of an ADU is $1,350 a month (including utilities), that means that currently, a 1 bedroom (BR) ADU is affordable to a household earning 60% of AMI and a two bedroom ADU is affordable to a 50% AMI household. Therefore staff recommends setting the affordability level between 70-80% AMI. The alternative ordinance sets the level at 75% which is comparable to the 85% of market rate rents as proposed by Weaver and Yates.



The average size of existing ADUs is 725 sq. ft. For comparison, the average size for a 1-bedroom rental in the city's affordable housing program is 564 sq. ft. and the average size of a 2-bedroom is 868 sq. ft.

2018 Affordable Rents




Affordable Rent for 0 BR

Affordable Rent for 1 BR

Affordable Rent for 2 BR










50%

AMI Rents

$951

$1,019

$1,223

60%

AMI Rents

$1,141

$1,222

$1,467

70%

AMI Rents

$1,331

$1,426

$1,712

75%

AMI Rents

$1,427

$1,528

$1,834

80%

AMI Rents

$1,522

$1,630

$1,956

90%

AMI Rents

$1,712

$1,833

$2,201

https://www-static.bouldercolorado.gov/docs/COB_2018_Rent_Table_FINAL_for_web-1-201805011049.pdf?_ga=2.198209007.1721290745.1527019448-2087421142.1473943789


  *   Enforcement. If an ADU owner is not receiving compensation from the ADU occupants, then the owner is still eligible to create an affordable ADU. For example, if the owner is using the ADU for aging parents or adult children without charging rent. However, the current or future owners will be required to limit rents if in the future if the ADU is rented. This will be enforced through the rental licensing program. A property owner will be required to verify that the amount of rent charged is less than the maximum prior to receiving a rental license. Staff could monitor violations through rental ads and through complaints, however, the following concerns have been put forward by our compliance department. Alternatively, council could create a new enforcement program specific to ADUs. There are issues that will need to be addressed in the enforcement of an affordable ADU program:

     *   The Long Term Compliance Specialist currently does not conduct proactive enforcement with review of advertisements. The current work plan allocates all compliance resources for long term rentals to support the SmartRegs amortization deadline.
     *   Monitoring advertisements for long term rentals is not likely to be as successful as with short term rentals since the ads are not up as frequently and are less likely to be found in time to take enforcement action.
     *   Ads are able to be changed quickly, this would require substantial staff time to ensure that advertisements remain in compliance and are accurately reflecting the appropriate rent. It may also be difficult to determine which advertisements are in violation just by the amount of rent since some ADU's will be allowed to rent at market rates.

  *   Parking. The parking requirement remains the biggest barrier to creating an ADU in Boulder. To have an ADU, a property owner must meet the underlying parking requirement for the district and add one additional off-street parking spot. The off-street parking cannot be placed in the setback area. In residential districts, the setback ranges from 10 feet in high-density districts to 25 feet in low-density districts. Generally, homes are constructed to the setback line, leaving no room for parking in front of the house outside of the setback. The parking requirements can be met if the home has a two-car garage. However, many homes in Boulder have no garage at all or only a one-car garage. In such cases, if the home was built to the setback line, the owner could not supply an additional parking spot. The code allows for variances, but those generally are permitted only in cases of significant hardship. If council wishes to include parking as a distinguishing factor between an affordable and market rate ADU, council could consider making it easier for market rate ADUs to comply with the off-street parking requirements. Council could either provide for a more liberal variance standard, waive the setback requirement entirely, or waive the setback requirement for paved surfaces such as driveways.

Separate from the affordable ADU discussion, Council member Yates requested that staff clarify some definitions around what constitutes a kitchen as it relates to ADUs. Staff proposes the following minor changes to the definition of Kitchen and adding a definition for Housekeeping Unit and Wet Bar:

  *   Housekeeping unit means one room or rooms with internal connections for separate residential occupancy and including bathroom and kitchen facilities.  Multiple housekeeping units exist if there is more than one address to the property or more than one kitchen; or if there are separate entrances to rooms which could be used as separate housekeeping units; or if there is a lockable, physical separation between rooms in a dwelling unit such that a room or rooms on each side of the separation could be used as a housekeeping unit or rooms with no internal connections.
  *   Kitchen means any part of a room or dwelling unit that can be used for the preparation of food that includes one or more of the following: a refrigerator, cooking device, kitchen sink, or dishwasher.  The following do not constitute a kitchen under this definition: (1) a wet bar; or (2) an ancillary refrigerator that is used solely to store food that is prepared in the kitchen of a principal dwelling unit.
  *   Wet bar means a bar for mixing drinks that may contain a sink with running water, a dishwasher, and a refrigerator but no other facilities that can be used for the preparation of food other than mixing drinks.  A sink in a wet bar must be smaller than a kitchen sink, as defined in Section 10-2-2, B.R.C. 1981.


In addition, council member Yates asked a question about saturation rates. Specifically, what happens to the saturation levels if we continue to count non-conforming structures. The staff memo in the packet has a discussion starting on page 170. There are approximately 475 non-conforming structures in the city. These count in the 10% saturation limit and are largely concentrated in the Mapleton, University Hill and the area in between the two. Because the saturation calculation is different for every parcel in the city (e.g., 300-foot buffer is around each property), it is not possible to calculate the number of parcels that would not be eligible to create an ADU if non-conforming structure continue to count. There are currently three people on the waiting list in three different neighborhood areas. Two of those are due either entirely or largely to the presence of non-conforming structures. As stated in the memo, it is difficult to determine how many people do not pursue an ADU because of the saturation limit. Finally, if non-conforming structures are kept in the saturation limit, staff will not be able to create an online tool for homeowners to determine if they are eligible to create an accessory unit. Staff will continue to manually determine if each property with the 300 foot buffer is a non-conforming structure when calculating the saturation rate for a property.

If you have any questions, please contact me at 303-441-4057 or sugnetj at bouldercolorado.gov<mailto:sugnetj at bouldercolorado.gov>.
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