The Boulder Planning Board voted unanimously on Sept. 2 to recommend the proposed Affordable Housing Impact Fee, which would impose a fee on property owners who demolish homes and replace them with larger ones, for adoption by city council. The Housing Advisory Board also voted to recommend the ordinance on Aug. 27.
City council votes are scheduled for Oct. 9 and Oct. 23. If approved, the ordinance would take effect Jan. 31, 2026.
A study commissioned by the city, published earlier this year, revealed that smaller, relatively affordable homes are often replaced with multimillion-dollar redevelopments worth up to $3.5 million more than the originals. These projects drive up demand for attainable housing, and the influx of higher-income residents increases demand for local goods and services, which in turn requires more subsidized housing. Under the current law, most property owners for single-family teardown-and-rebuild projects have their contributions to the city’s affordable housing program waived, despite the impact tied to their redevelopments. The fee is meant to close this loophole.
Two types of residential development would be subject: replacement homes and substantial additions. The fee would be $15 per new square foot. Replacement homes would receive credit for the demolished area, while home additions will have a one-time exemption of 500 square feet. There are also exemptions for projects involving homes under 2,000 square feet and ADUs. Renovations that do not increase the size of the home would not be impacted. The fee would be expected to generate $1.2 million annually.
Planning Board members generally supported the ordinance. They said it would have limited impact on low- and middle-income families and advance efforts to address housing affordability in Boulder.
Unlike water and sewage impact fees, which cap charges at homes of 3,700 square feet, the Affordable Housing Impact Fee would not have a maximum. This is because larger homes are seen as directly increasing the need for additional affordable housing, Senior Housing Manager Jay Sugnet told the Planning Board. All impact fees will be updated every year as part of the budgeting process.
City staff are still working to clarify how basement square footage will be included in the ordinance.