A proposed development would create 101 housing units on a block near Spruce and Folsom. Credit: John Herrick

One year ago, a developer pitched a plan to the Boulder City Council to build 63 housing units on a commercial block near Folsom and Spruce. Councilmembers said in order to approve the plan, they wanted more housing —  ideally homes ordinary Boulderites could afford to buy. 

Now, the developer, Pace Development LLC, has come up with the revised plan. It shared it with the seven-member Boulder Planning Board on Tuesday, Nov. 1, 2022, in an effort to get feedback before applying for any city permits. 

Instead of the 63 new units, the new plan calls for 101 housing units to be built in a four-story condominium. All would be for-sale, market-rate homes — except for 13 deed-restricted affordable units. The original plan included eight affordable units. 

For housing advocates, the latest concept plan is, overall, an improvement over the earlier proposal. But that it has taken a year — and that most of the units are not below market rate — highlights some of the challenges developers face when seeking to build relatively affordable housing in Boulder. 

“We’re at the mercy of a lot of things that are out of our control,” Ali Gidfar of Pace Development LLC said

To build the condos, the developer wants to tear down several buildings — including those occupied by Sportique Scooters Boulder, Boulder Furniture Arts and Mecha, a fitness studio inside an old tire shop. The project’s contemporary design includes interior courtyards and roof decks, with retail space on the first floor. The basement would hold 160 parking spaces. 

In total, it includes 88 market-rate and 13 affordable for-sale condominiums of varying size. Earlier proposals included just 16 for-sale townhomes and 47 apartments. The developer has not released an estimated cost for each unit. Similarly sized units at the Peloton West are selling around $600,000 to $900,000.

Boulder housing advocates have long targeted the near-to-downtown location as prime for additional housing density and transit-oriented development. The location is sandwiched between two-story residential housing to the north and businesses, including Mike’s Camera, to the south. 

Planning board members were generally supportive of the changes. But they raised concerns. 

Board member ml Robles, an architect specializing in accessory dwelling units, or ADUs, asked how much the housing units would cost. 

“People are excited about this project and they want to support it. And it’s because they think they are going to be able to live here,” Robles said. “Is that a myth?” 

Gidfar said the homes are being built at “market rate” — meaning, without subsidies and priced based on demand. He mentioned several challenges in Boulder that make it more expensive to build and therefore more costly to buy. 

For one, the Boulder City Council wanted him to build for-sale units rather than apartments. Gidfar said building homes to sell rather than rent means they have to be built to a higher construction standard — such as using steel-reinforced concrete framing rather than wood — in order to avoid potential “construction defect” litigation. 

“If we are going to do a for-sale project, we have to have a much better built building,” he said, “to be able to buy expensive insurance to put off the crazy lawyers who will come after us for every little defect that happens. So we’re all in a bind here.” 

The other major issue to building at a lower price point, he said, is the height limit in the city’s charter. 

Given the proposed zoning for the project, Boulder Municipal Code limits the building’s height to 38 feet, about three stories tall. Gidfar, however, is planning to seek permission to build four stories tall, up to about 55 feet — though he would prefer even taller. In exchange for going above the allowable height, the city is requesting that he build more affordable housing. Such requests are common in order to “provide additional benefits to the community,” according to city code

With few exceptions, 55 feet is a non-negotiable cap enshrined in the city’s charter. 

“If I could have a fifth floor, I could do a lot more. Can you give me a fifth floor? I would love that. Then we can make all this work,” he said. “It becomes a lot more efficient when you build more square footage. The land cost is the land cost. I can’t change that.” 

But whether the developer can even build up to four stories is yet to be decided. Several board members raised concerns about potential impacts on the viewshed and how it might cast a long shadow over the sidewalk on the northside. Many of the homes north of Spruce Street are just two stories tall. 

A rendering of the development from the corner of Spruce and Folsom. Source: Boulder Planning Board concept review

‘Unfortunately, we’re stuck’ 

The city typically requires housing developers to build projects with at least 25% affordable housing. Most of the time, developers pay “cash-in-lieu,” which allows them to pay the city cash rather than build affordable housing units on site. The city then takes that money to rehabilitate affordable housing units or buy market-rate homes and convert them to deed-restricted affordable homes. By 2035, the city’s goal is to have 15% of its housing stock permanently affordable. (It is currently at about 8%.) Cash in lieu brought $63.5 million to the city between 2013 and Oct. 5, 2022, according to city officials. 

“That’s where you’re going to get the most bang for your buck and that, unfortunately, is the reality,” Gidfar told Planning Board members in reference to cash-in-lieu. “I started this project with the idea of wanting to have a really mixed-income group of people living together. Everything that I’m doing is working against me. And I can’t control that. I can’t make rich people come and give me money to make this thing happen.” 

Gidfar said if he can’t get the affordable units built onsite, he would pay $7.5 million for cash-in-lieu. 

But, Robles argued, the problem with cash-in-lieu is that it has not created more for-sale affordable housing at a diverse price point. According to city data, most of the city’s subsidies go toward rentals for people earning up to 60% the area median income, not home ownership. 

Gidfar agreed. And, again, he mentioned the challenges caused by the city’s height limits. 

“Look at Vienna,” Gidfar said. “They have these tall towers — not four stories, taller so you can make it work — and they have a mixed group of people who live together with the most expensive units on top that help to pay for a lot of the units underneath. But unfortunately, we’re stuck.” 

Another challenge for the project is the Mecha building, which is eligible to be landmarked and therefore protected from demolition. It was built in the 1970s with a modern “Googie” aesthetic to resemble futuristic architecture and drive-through car culture. 

In an effort to increase the number of homes on the site, the proposed development would tear it down and use its glulam beams — which are wood-laminated beams becoming more popular in Scandinavian architecture — as part of the lobby to the condominium. 

The city’s Landmarks Board would likely decide whether to allow the building to be demolished or relocated. 

A proposed development would build 101 housing units on a block new Spruce and Folsom. It includes demolishing the Mecha building. Credit: John Herrick

The parking dilemma 

The project also includes 160 parking spaces in the basement of the condominium, so roughly one and a half spots per unit (though some parking is for proposed retail, including a cafe, on the first floor). 

According to Gidfar, the parking is needed to help sell the housing units. 

“If I want to sell a penthouse unit to a wealthy person, they are not going to want to buy it if they only have one parking spot,” Gidfar said. “It’s in my interest to have as many parking spaces as I can get.” 

Some members of the Planning Board pushed back. 

“We’re all trying to figure out ways to make this a more future-oriented development that de-emphasizes cars,” Board member Mark McIntyre, a cycling advocate and former member of the Transportation Advisory Board, said. 

He suggested that the parking be “unbundled” from the housing units. This would require people to pay for a parking space, effectively rewarding people for not owning a car. He suggested building more bike parking, too. 

Board member Jorge Boone said he, too, would like to see fewer car parking spaces. 

“I realized it may also have the effect of reducing the price that the developer gets for some of these units,” Boone said. But, he added, “from the city’s goals standpoint, is not necessarily a bad thing, especially if the project still pencils out.” 

The developer is yet to finalize a site plan for the project. If and when that happens, the Boulder City Council and the city’s Planning Board will vote whether to approve it. It could be years away. 

The project has already been in the works for 21 months, Gidfar said.

John Herrick is senior reporter for Boulder Reporting Lab, covering housing, transportation, policing and local government. He previously covered the state Capitol for The Colorado Independent and environmental policy for VTDigger.org. He is interested in stories about people, power and fairness. Email: john@boulderreportinglab.org.

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  1. John,

    Do you know what is the current size of the of cash in lieu account is in Boulder and a history of where theses funds have been directed towards since the program has been implemented?

    Jim Murphy

  2. Progressive YIMBY Planning Board is getting their hat handed to them with this project. Market-rate housing in Boulder will never result in affordable housing in Boulder because the market here is inelastic. If you want affordable housing, you have to build affordable housing. Thirteen affordable housing units, don’t make me laugh! Zero impact on traffic, and affordability, and will lower the quality of life in Boulder. Not to mention this isn’t going to get built anytime soon.

  3. This is my first time here, and I want to say “Bravo” to the reporting! What a difference from the you-know-who. Keep up the good work!

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