The Boulder City Council last week approved a new fee for property owners who tear down single-family homes and replace them with larger ones. The fee will take effect Jan. 31, 2026.
The measure is part of a broader effort to generate more funding for affordable housing and address a gap in Boulder’s inclusionary housing policy. Currently, property owners who build large detached single-unit homes are exempt from paying into the city’s Affordable Housing Fund, while developers of multifamily housing, sometimes occupied by lower-income residents, are required to contribute.
Under the new ordinance, the city will impose an $11-per-square-foot fee on replacement single-family homes for any area exceeding the square footage of the original home. The fee will also apply to additions larger than 500 square feet. The ordinance excludes accessory dwelling units (ADUs) from floor area calculations. City staff estimate the fee will raise about $1.2 million annually for affordable housing.
“Not only does making this change help bring more balance to our system, it also increases funding and provides more consistent, predictable funding,” Mayor Pro Tem Lauren Folkerts said during the Nov. 6 city council meeting. “It ensures that when we rebuild larger single-family homes, we’re not doing so at the expense of affordability and diversity that makes this community strong.”
The ordinance passed 7–2, with Councilmembers Mark Wallach and Tara Winer opposed. Mayor Aaron Brockett, Folkerts, and Councilmembers Taishya Adams, Matt Benjamin, Tina Marquis, Ryan Schuchard and Nicole Speer voted in favor.
Opponents said they worry the new fee could penalize families seeking to add space to their homes.
“I find it interesting that we are continually discussing the affordability of housing and we take step after step to make housing less affordable,” Wallach said.
Each year, dozens of modest homes in Boulder are purchased, demolished and replaced with larger houses, a pattern that removes relatively affordable homes from the market for first-time home buyers.
A study released earlier this year by the consulting firm Gruen Gruen + Associates found that new homes built through scrape-and-rebuild projects are often worth $3.5 million more than the smaller homes they replace. Buyers of these homes typically must earn hundreds of thousands of dollars more each year than the residents who lived there before.
The study concluded that tear-downs create new demand for affordable housing for workers. That finding provided the legal basis for the new fee.
The demo-rebuild fee is one of two major new charges embedded in the city manager’s 2026 budget, which the council approved in October. The other is a transportation maintenance fee, approved by a 6-3 vote, which will be calculated using a “person-trip generation” methodology and paid for by property owners.
The city expects to begin collecting the transportation fee in the second half of 2026, generating about $2.25 million that year and $6 million in 2027. Revenue will go toward repaving roads, fixing bridges and repairing sidewalks, according to city officials.
Why didn’t they do this four year ago? Did they need to wait until they were assured of reelection to make it a priority, finally? I hope city council is finally ready to focus on real issues that will tackle the underlying problems that have turned Boulder into little more than a power center for wealthy retirees, rich kids, and six figure tech gurus from across the country. What kind of a city do we actually want? The jargon rarely matches the actions on city council.
I favor this new fee but want to kindly ask that new retirees moving to Boulder not be denigrated. My husband and I are moving later this year from DC. We wanted to buy a condo but did not find a good option in our price range so we are renting. We plan to be active community members and support the community as volunteers. My partner is a physical therapist so will be providing health services in Boulder. I am retired. We hope Boulder will be welcoming!
“Bouler, 35 square miles surrounded by reaality.”
Huh. Purely on full tear-downs, or expansions? I’m good with that, but wonder if the ole “one wall standing” remodels which then somehow gets knocked down (the remaining wall) will be given a pass. Please, city council get a little more moxie.