Boulder: City Expands Use of Linkage Fee

In 2010 City voters denied a ballot question asking for approval to increase the affordable housing excise tax. The excise tax is $.51 per square foot of space (PSF) of nonresidential and .23 PSF for residential projects.

Residential and nonresidential developments are also charged impact fees, For example, the developer of an office park pays a total of $.97 PSF for municipal facilities, police and fire impact fees.

Now the Council is pursuing an additional fee on commercial developments to help fund affordable housing. A housing linkage fee is another per square foot payment charged “on new non-residential uses to mitigate impacts on the demand for affordable housing created by those uses.” The proposed rates vary from $2.24 for a new school to $9.53 for an office. In a Daily Camera article, Andy Bush of Morgan Creek Ventures was quoted as saying the proposal “would add $1 million to the cost” of his development at the Steel Yards site in Boulder Junction that consists of two, four-story commercial buildings.

The linkage fee is anticipated to be in place for an interim period until a new comprehensive housing linkage fee study is completed later this year. The Council will hold a public hearing on the ordinance next week.

Note: The housing linkage fee is not subject to voter approval unlike the excise tax that was voted down in 2010. NAR land use consultants Robinson & Cole say that there are several incentive concept that would achieve the same results: 1) incentive zoning that allows developers who want to exceed max FAR or get density bonuses to provide housing in exchange for these incentives; 2) special assessment districts that cover all or most of the businesses and spread the cost burden to all benefited businesses instead of imposing them on specific developments. Robinson and Cole say, “the goal of linkage programs is to provide housing in the lower price ranges. This is done by either reducing the value of developable land or by increasing the prices of “other” housing.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: