[BoulderCouncilHotline] Proposed next steps for the Federal Opportunity Zone in Boulder

[Weaver, Sam]

Fellow Council Members and HOTLINE followers,

In March 2018, Boulder City staff applied to have a census tract in Boulder included by the state of Colorado in the Federal Opportunity Zone (OZ) registry.  The stated reasons by the City for pursuing this designation (without Council or community consultation) were to incentivize affordable housing, incentivize affordable commercial development, and to incentivize re-development of the Diagonal Plaza shopping center.  These are all goals which are also contemplated by the Boulder Valley Comprehensive Plan, most especially creating more affordable housing.  This OZ designation affords investors in all development projects in those zones a very favorable tax treatment on profits occurring in those zones.  Rather than explaining the pros and cons of this designation from my perspective, I will supply the following link from the Institute on Taxation and Economic Policy:

https://itep.org/how-opportunity-zones-benefit-investors-and-promote-displacement/

In order to promote the potential upsides of this new irreversible decade-long Federal designation, and to guard against its potential downsides, I would propose that City Council have a discussion of the following strawman proposals I am advancing in this message:


  1.  Implement a development moratorium in the OZ zone on December 18
  2.  Exempt from this moratorium any housing development proposal which includes all of their inclusionary housing components on the development site
  3.  The moratorium duration would generally stand until each zone district in the OZ has been reviewed under the current Use Table Review project.  After such review and approval of zoning uses, that zone district in the OZ would be brought out from the OZ moratorium.
  4.  As an example of #2 above, Council is reviewing the use tables and requirements for development in the BC-1 and BC-2 zones.  Those criteria will be discussed at second reading on Dec 18, and could be finalized as soon as January or February of 2019.  This means that the BC-1 and BC-2 zones in the OZ could be out of any moratorium very soon, and any desired re-development of Diagonal Plaza will not be substantially affected by this proposal.
  5.  Because the focus of this zone designation is around affordable housing and affordable commercial development, no market-rate office space development in the OZ will be allowed until a sub-community plan is in place. After the sub-community plan is approved, commercial office development applications could proceed.

The proposed steps above are within the framework of the current Council work plan and are starting points for discussions about how to maximize the community benefits accruing from the OZ designation.  Our ongoing community land development is a collaboration between the residents' desires as communicated by City Council and the private sector desires as communicated through development applications. Desired community outcomes are formulated through an iterative and on-going dialogue between the public and private sectors.  While the OZ discussion will provoke consideration of City-wide goals, we will have to think carefully about how to separate what we can require in the OZ from what we want to occur across all of Boulder.

Some of my hopes for development in both the OZ zone and the City in general include:


  1.  Create more permanently affordable housing in Boulder
  2.  Create more middle-income housing in Boulder
  3.  Create more permanently affordable commercial space in Boulder
  4.  Minimize displacement when residential properties re-develop.  This includes permanent and temporary (construction-induced) displacement.  If the OZ results in residential re-development of current medium- and high-density residential properties, temporary and/or permanent displacement is a risk to the current residents.  Any loss of  diversity that may result from such re-development is a loss to our entire community as a whole.
  5.  Implement permanent Transportation Demand Management programs for any new office space development
  6.  Improve (or at the least do not degrade) the ratio of housing to employment in Boulder.  The presence of more jobs than housing is one of many factors that contributes to our housing affordability challenge.

Thanks as always for being involved in the community discussion about how Boulder should evolve over time.  We live in a beautiful and special place, and our town is filled with creative and involved residents and businesses.  How we can progress towards increasing inclusiveness and equity is a critical concern for me, and that includes how we can guide development to serve our community goals.  I look forward to hearing from you (and I am sure all Council members do) on this proposal.

All the best,

Sam Weaver
Mayor Pro Tem
Boulder City Council
weavers at bouldercolorado.gov<mailto:weavers at bouldercolorado.gov>
Phone: 303-416-6130

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