[BoulderCouncilHotline] Re: East Boulder Subcommunity Plan

[King, Kathleen]

Councilmember Wallach -
Below are staff responses to the questions included in your hotline post from yesterday. Thank you for your patience as we assembled the data.


1. How will the (subcommunity plan) get us to middle-income housing?
City plans, policy and programs can influence the market, but cannot control the ultimate price of homes sold or rented on the private market. The city can control land use, form and intensity and will use these tools in collaboration with local owners and architects to help create housing styles and formats to serve middle-income renters/purchasers. This will be regulated by zoning. Zoning changes, updates and the potential creation of new zones is identified as a project for implementation in the subcommunity plan.
Additionally, the city’s Inclusionary Housing program does require that all new residential development contribute 25 percent of the total units as permanently affordable housing for low-, moderate- AND middle-income households.


2. How many (deed restricted middle income units) have actually been created (under the middle income housing strategy?

The city has a total of 811 moderate- and middle-Income housing units that are permanently deed restricted through the Affordable Housing Program. These are ownership homes that make up 21% of the total units in the program.

Since 2016, 32 for-sale affordable homes have been created for moderate/middle income households.  Currently there are 100 units of new for sale housing which have been or will soon be entitled and begin construction.  We also launched our preservation for sale program last month and sold our first home yesterday through this program to a household that earns 100% of the AMI.  We currently have budget to create 10-12 units per year with this program.  Our H2O down payment assistance program has provided over 80 loans and was increased a few months ago from $50,000 to $100,000.  This program may provide opportunities for some households.
The Middle Income Strategy approved by the city council in 2016 identified 4 key tools to make progress on this challenge. The city has implemented the majority of these tools, including the addition of middle income to the 15% goal, the 2018 ADU Update, requirements and incentives for middle-income units in Inclusionary Housing regulations, additional community benefit for middle income in annexations, and the preservation of existing homes through deed restrictions. While the goal of 3,500 homes was highly aspirational, one intent not fully implemented was to encourage market homes that were sized more appropriately to middle income families (missing middle housing type).  This was to prevent the trend some have seen in Boulder of large homes of 3,500 sq ft and up that the majority of our residents will never afford.  The EBSCP looks to encourage development of some homes in the 1,000 to 2,000 sq ft. size that meet a need that many working families in Boulder can afford.  For this housing segment we are not talking about efficiency units, but two and three bedroom units of a more moderate size.

Here is the reference from the draft plan:
Policy H3. Support the development of family-sized units in East Boulder. To support residential diversity in the subcommunity and address the need for “missing middle” housing, some new development should include units that will meet the needs of families, with two or more bedrooms. Building form will be supported through zoning updates.  P. 53 EBSP Draft

3. What percentage of new homes have been targeted to serve middle-income households?

The city does not have data on the percentage of new home construction in Boulder that has been targeted to serve middle-income households, that are outside of the affordable housing program. The challenge of measuring the market annually and the inability to control the market was recognized by council when the strategy was adopted.
4. How will simply providing more opportunities for the development of housing, even through the use of form-based code, lead to the desired result?

Zoning alone will not lead to a desired result of increasing the availability of middle-income homes in Boulder. Providing for more housing and a greater variety of housing through zoning offers a path towards the development of “missing middle” housing that is more attainable to  middle income residents on the private market and creates more opportunities for new units to participate in one of the following city programs: down payment assistance, or the purchase of market-rate homes and buying down the affordability for middle income.
Next steps for achieving middle income housing goals, on the HHS work plan for later this year, include establishing the voter approved down payment assistance program for middle income households.  This is another tool on the horizon.

5. How is anything that we are doing in the EBSP likely to drop the price of new housing to $500-700 per square foot, a level at which middle-income families at least have a possibility of participating?
Subcommunity plans are high level plans that help translate the aspirations of the Comprehensive Plan to a more localized level. It is unrealistic to expect a subcommunity plan to solve all the city’s housing challenges. Specifically, the price of housing is market based. Anything beyond market value for homes will be the subject of regulatory or financial participation by the city.

6. And what in the Plan will cause private developers to forego potential profits by pricing their product below what the market will support, merely to create middle-income housing?
The plan recommends the expansion of the Community Benefit program to create incentives for future developers to provide low, moderate and middle income units.
Here is the reference from the draft plan:

Program H9. Expand the Community Benefit Program.   Develop a menu of incentives to encourage private developers in East Boulder to provide affordable low- and moderate-income housing and market rate middle-income housing options as part of new residential and mixed-use projects. The program could serve as a pilot for housing redevelopment in other transitioning areas of the city. Developers may negotiate a package of incentives with the city to allow the city, future residents and the existing community mutual benefits.

  1.  P&DS works with HHS to develop a suite of options
  2.  Community engagement process to weigh options and understand what existing and potential residents are comfortable/not comfortable with
  3.   P&DS and HHS collaborate on a recommendation to the Housing Advisory Board, Planning Board and City Council


References: COB: HHS; P+DS; 2 BVCP Policy 2.16 Mixed Use & Higher Density Development; BVCP Policy 7.01 Local Solutions to Affordable Housing; BVCP Policy 5.02 Regional Job Center.
P. 53 EBSP Draft

7. The question simply boils down to this: if the market has been incapable of providing middle-income housing during the past 6 years, on what theory do we believe that the market will now do so?
There is no expectation that the market would produce middle income priced housing in Boulder in the immediate future. This is why the plan offers regulatory (zoning) and programmatic (community benefit and incentives) recommendations to produce this format (missing middle) and price (middle income) housing.


Thank you

Kathleen

Kathleen King  AICP, PLA
City Principal Planner

[City of Boulder Planning+Sustainability]
kingk at bouldercolorado.gov<mailto:kingk at bouldercolorado.gov>
Department of Planning
1739 Broadway | PO Box 791 | Boulder, CO 80306
Bouldercolorado.gov<https://www.bouldercolorado.gov/>





From: Wallach, Mark <wallachm at bouldercolorado.gov>
Sent: Monday, April 18, 2022 1:11 PM
To: HOTLINE <HOTLINE at bouldercolorado.gov>
Subject: [BoulderCouncilHotline] East Boulder Subcommunity Plan


The staff memo summarizing the results of our conversation on the East Boulder Subcommunity Plan is, by and large, quite helpful in framing the issues and strategies contemplated for development of that area. However, one issue that remains quite unclear to me is with respect to the creation of middle-income housing. The second bullet point in the memo states that the plan “provides for significantly more housing opportunities that implement the BVCP goal of providing a diversity of housing types.”

While we all acknowledge that under the plan more housing will be created, the specific question that I raised in my prior Hotline – and which has not been answered – is how this will get us to middle-income housing. It is not the quantity of housing that will provide middle-income housing, but the price. Neither the diversity of housing types nor the use of the form-based code will guaranty middle-income housing, unless that category is defined to include studio apartments and small one-bedroom apartments. To the extent that Boulder needs apartments for families with children (including first responders, teachers, City employees, etc.), those small units are likely to be inappropriate for middle-income renters/purchasers.

At our meeting I also did not receive an answer to a question I posed in my previous Hotline post, and to which I would appreciate a response: Our 2016 Middle Income Housing Strategy contemplated that we would create 3,500 middle-income units (1,000 deed restricted) by 2030, and that 60% of all new homes would be targeted to serve middle-income households. We are 40% through that 15 -year period. How many have actually been created? What percentage of new homes have been targeted to serve middle-income households? And if the answer is as low as I think it is, how will simply providing more opportunities for the development of housing, even through the use of form-based code, lead to the desired result?

New for-sale, multi-unit construction in Boulder (primarily townhouses) now routinely sells for $1,000/square foot, with construction costs (not including the cost of land and what are traditionally viewed as “soft” costs) at or above $350/per square foot. How is anything that we are doing in the EBSP likely to drop the price of new housing to $500-700 per square foot, a level at which middle-income families at least have a possibility of participating? And what in the Plan will cause private developers to forego potential profits by pricing their product below what the market will support, merely to create middle-income housing? The question simply boils down to this: if the market has been incapable of providing middle-income housing during the past 6 years, on what theory do we believe that the market will now do so? This is an important issue, and magical thinking will not get us to the desired result.

The Plan really does not address this issue, and I again request some clarification as to how we get to middle-income housing through the EBSP. The policies of the BVCP and this document appear to be aspirational without a clear road map of how we get from here to there, and that is an issue that should  be remedied.

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