Inclusionary Housing Program Changes

Planning Board & Housing Advisory Board (HAB) to consider changes to affordable housing at their meetings September 26 and 27, 2023.

Photo courtesy Boulder Housing Partners

In 2022, City Council asked staff to review Boulder’s Inclusionary Housing (IH) program to increase funding and improve outcomes for middle-income housing. No longer a model for local affordable housing programs, Boulder’s IH program is showing its age. IH has become limited in its capacity to address the size and scope of Boulder’s housing needs.

Two important reforms of the IG program are on track for review by Planning Board and HAB next week. Council action is scheduled for November 2—the last meeting of the current Council term. 

First, cash-in-lieu (CIL) payments into the city’s affordable housing fund will be assessed based on square footage rather than the number of units in new developments. This will remove the incentive for developers to produce fewer, larger homes in order to reduce their affordable housing obligations. In addition, cash-in-lieu will be assessed at a uniform rate regardless of unit size. Previously, they were assessed for only the first 1200 square feet of a new unit.

A second proposal will lay the groundwork for a cash-in-lieu contribution when existing single-family homes are demolished and rebuilt, or substantially increased in size. Until now, Boulder’s inclusionary housing rules have applied only to new residential development, despite the ongoing ‘upgrading’ of existing middle-income homes. A NEXUS study will be required to document the link between reconstruction and the city’s affordable housing needs.

Council passed on a proposal to relax requirements for affordable housing when provided in the form of on-site for-sale units. A consultant study on the topic confirmed what local experts have suspected for some time – that it’s easier for developers to contribute cash-in-lieu to Boulder’s affordable housing fund than it is to develop these rare and sought-after units.

In the end, a majority of Council opted to keep most money flowing into the cash-in-lieu program, and the affordable rental homes it generally produces. Affordable housing developers such as Boulder Housing Partners can leverage these funds to develop two or three times as many affordable units as would be produced by developers onsite, which underpins much recent progress towards Boulder’s affordable housing goals.

But in a city where middle-income housing needs are also acute, it’s important to note that the cash-in-lieu program serves an increasingly narrow income band. If the current approaches to producing affordable housing cannot address the range of documented needs, the next Council will need to find other ways to tackle the disappearing middle.

[Editors’ note: In an October issue, we’ll share City Council and Mayoral candidates’ responses to questions about Boulder’s housing challenges.]

The changes moving forward will be discussed at Planning Board Tuesday, September 26, 2023 at 6:00 PM, and Housing Advisory Board (HAB) Wednesday, September 27, 2023 at 6:00 PM. Now is the time to send your comments..

Get Involved: How to reach Planning Board and Housing Advisory Board

E-mail Planning Board to express your views. Any correspondence you wish the Board to review should be received via email on Monday, September 25—at least 24 hours prior to the beginning of the meeting.

Email Housing Advisory Board to express your views. Any correspondence you wish the Board to review should be received via email on Tuesday, September 26—at least 24 hours prior to the beginning of the meeting.

What we’re reading:

By the numbers: What’s getting built in Boulder (From Shay Castle in the Boulder Beat, 9/15/23). Housing debates can run hot on emotion and anecdote, but good data can help us make better decisions. In this article, Shay Castle digests the last decade of rental housing construction in Boulder, including unit types and affordability.

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