The Boulder City Council on April 10 directed city staff to continue drafting an ordinance that would impose a new fee on property owners who demolish homes and replace them with larger, more expensive ones.
The move follows a city-commissioned study that found these projects contribute to Boulder’s housing affordability crisis by reducing the supply of relatively attainable homes and increasing demand for subsidized affordable housing.
The study concluded that the city has a legal basis to impose an impact fee tied to the additional square footage of rebuilt homes. Consultants recommended a fee of $15 per square foot of added space, with certain exceptions. This would generate an estimated $1.2 million annually for the city’s Affordable Housing Fund.
The proposed fee would close a gap in Boulder’s inclusionary housing policy, which currently exempts most single-family home redevelopments from contributing to the fund — unlike most multi-unit projects.
Most councilmembers said they supported the fee, though several raised concerns about its potential impact on homeowners making modest additions to accommodate growing families. Some recommended applying the fee only to square footage beyond a 500-square-foot expansion and asked staff to engage with homeowners — particularly those with children — when drafting the ordinance.
City staff plan to bring a draft ordinance back to councilmembers by October.
Doesn’t a bigger home house more people, and be more energy efficient, and employ more construction workers, and pay more property tax?
It doesn’t mean any of those things…merely pushes the disingenuous illusion of wealth as a job creator, economy stimulator, and always promotes better “efficiency”. Because let’s be honest here: that construction isn’t done by locals nor substantially benefits anyone financially but the Developer, more people are not living in these giant mansions, and if a home is built 4x larger than the previous but only uses 2x as much energy…that’s not yielding any tangible saving or reduces usage whatsoever.
It is completely built by locals. The developer boogieman is a tired Boulder Boomer myth, and a huge reason we have expensive housing and construction costs.
Ohhh a meager “fee”….well that solves everything then, as modest homes continue to get bought, demolished, and replaced with towering luxury ones. Just like the previous fee (loophole) that allowed Developers to pay cash-in-lieu instead of meet affordable building requirements for all the luxury condos they’re built across town, so much of which still sit empty. Of course, they also don’t want to talk about that nor how real estate in this town continues to be used as a land bank to park monies like from the Florida State Pension Fund as a lucrative speculative investment. Nothing suspicious about that to our elected leaders at all, I guess, and a topic they try very hard to forget particularly when it comes to the other elephant in the room: unabated rising rents for people who can lest afford to buy into a market where “affordable homes” still run close to a million dollars.
It’s amazing how far the City Council will go to ignore on the larger issue, talking in circles to address a single one so as to virtue-signal they still care about “affordability”. What about a Vacancy Tax? This is a proven market mechanism to address how commercial real estate and housing are conspired to sits empty by greedy, colluding corporate interests so they can claim a tax write-off of lost revenue from the rents they keep artificially high. That’s how mountain towns as starting to grapple with the lack of housing for its residents that’s increasing under consolidated ownership, just like Boulder. But because our town has fully capitulated to their interests, instead we get their lobbied false solutions like commercial-to-residential conversion or erasing our airport …rather than putting a proven tax like this on the ballot to let voters decide.
So these tear-downs are just another in a long line of novel Developer scams to hollow out Boulder’s house stock, harking back to the rampant Pop ‘n Scrapes problem that went on for years in the 2000s that apparently nobody remembers and City Gov conveniently overlooked as they unravelled those legacy rules and growth/density regs these last few years to resurrect this problem with a vengence. Ohh but this meager fee, which will be but a small speedbump and do nothing to address this issue but take a little cream off the top for the City. Will people ever get tired of complacently watching the our local government dance around treating the symptoms of a disease instead of addresses its root cause, or does that require the kind of attention span and mental faculties this aging population is losing more of every day. As another yet consequence to rendering this town unaffordable to young people, is it excludes those whom might advocate or speak out in outrage as gentrification otherwise destroys its local, colorful character. Because if there’s one message that’s becoming abundantly clear these days; its rich people must have it all, and everyone else outta be grateful whatever crumbs are left.
A drop in the bucket for sure. I was interrupted for the rest of the council meeting right after the presentation, so only heard the very first part of council’s questions. I think it was Ryan who asked about the legality of trying to target wealthy property owners with a larger tax to encourage them to think again about buying and demolishing smaller homes to build mega mansions. Staff seemed to indicate that it was illegal to do so in an effort to change behavior! I was flabbergasted. How can that be true? Boulder established the blue line and open space requirements to protect Boulder from those same wealthy interests, and now we can’t even impose a fee that would discourage landowners from building those enormous homes that have a demonstrably negative impact on housing costs and environmental factors? How is this the case? And why was another long expensive study conducted just to move forward with this insignificant tax?
Yes exempt those with modest additions but first the tax needs to be much higher. $15/sf. when the costs to build is $1100/sf? Nope.
I think it’s more like half of $1100. For now.
Nope Roxanne. These high end constructions cost high end. And drive everything, including embedded land value up.
That’s incorrect, you can definitely build in Boulder for under $550/sf. Super high end builds of course exist but plenty of builders and developers are building for WAY less than $1100 in Boulder.
How about a carrot with that stick, fee to replace with single house ok, but easy pass permit to tear down my single family house and put up a nice 4-plex. One for me, three for thee! Just need to scrap the single family zoning.
Single family zoning is already scrapped, but you probably can’t put up a fourplex; but you can put up a duplex or triplex. But in Boulder, the economics are not there yet, far more money can be made on making a large home instead of a duplex or triplex. I don’t see anyone permitting to put up duplexes.
Who pays the new impact fee on redeveloping smaller homes?
The houses in Old North Boulder sell to developers willing to pay for the opportunity to tear down the original 1000 square foot homes and replace them with much bigger homes. The sales prices of the older homes reflect how much profit there is in remodeling them.
The city is preparing a new impact fee, which will be reflected in what these developers are willing to pay for the older homes. This transfer means that the new tax will be paid by small home seller, not the developers.
Boulder is getting out of control with their building restrictions. First, the new energy code where you need a massive (and expensive) solar system to meet HERS, then the newest “green energy” code that doesn’t allow any natural gas appliances (HVAC, fireplace, kitchen range etc etc) for a new build. Now an extra fee if you tear down your house and build your dream home, current taxes and permits fees are high enough.