Earlier this month the Boulder City Council voted to increase the affordable housing linkage fee for new developments. The linkage fee, which charges new commercial developments to offset their impact on the City’s housing market, was first implemented in 2011. The per square foot fee varies depending on the type of business.
Staff and consultants say office developments have the greatest impact on housing and should therefore have the highest fees. The current rate is $9.53 per square foot (SF) and after a long discussion, the Council agreed to raise the rate to $12 per SF but only after motions by Lisa Morzel ($30 per SF) and Mayor Pro Tem Mary Young ($35 per SF) failed. Staff had recommended a $15 per SF fee, but this faced opposition from the Boulder Chamber of Commerce and Boulder Housing Partners (BHP), who suggested the $12 rate.
This was a bizarre discussion. The Chamber and BHP argued the linkage fee is just one part of the strategy. Morzel and Young agreed but seemed to think it was ok to charge new businesses a fortune to build in Boulder even though they agreed development should not have to generate all the funds needed to address the City’s affordable housing issue. One can only suppose they subscribe to the “business owners are all rich” philosophy, meaning businesses can afford to pay exorbitant fees.
Note: Boulder is the only community in Northern Colorado that charges a linkage fee, which more than doubles the total amount of fees and taxes new commercial developers pay. Linkage fees in other cities across the country vary from $1.76 per SF in San Diego to $25 per SF in Mountain View, CA.