Boulder: The Price of Development

On June 14 the City Council held another study session on development-related impact fees and excise taxes. Based on staff and consultant memos and feedback from Council, one can comfortably predict that the fees will rise, especially those related to affordable housing. For example, the current affordable housing linkage fee charged for non-residential office development is currently $9.53 a square foot. The staff is recommending the fee be increased to $33 if the City wants to meet its 2025 goal of securing ten percent of all residences as permanently affordable.

Why would a business choose to build in Boulder? Boulder’s impact fees and sales and use tax rates are already higher than those of other Northern Colorado cities. To build a three-story office building in Boulder, a developer pays $1.2 million in development fees alone; Longmont charges $722,192, $465,730 and Fort Collins $512,133. Staff apparently is unconcerned about Boulder’s ability to compete for new business. If Council passes the recommendation when it considers the issue again in July, it will be interesting to see if the private sector is willing to pay the price to build in Boulder.

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