Boulder passes fee on commercial projects to fund affordable housing program

BOULDER — The Boulder City Council Tuesday night approved a fee on commercial development that will be used to help fund the city’s affordable housing program.

The council voted 5-1 in favor of the housing-linkage fee to capitalize on Boulder’s building boom and have developers whose projects create new jobs help offset the cost of providing affordable housing for those employees, often low- and middle-income wage earners.

The city wants at least 10 percent of its housing stock to be affordable, housing that does not cost more than 30 percent of a person or family’s monthly income.

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Mayor Matt Appelbaum, and councilmen Sam Weaver and Andrew Shoemaker were absent, but they had voted in favor of the fee at a previous council meeting. Councilman George Karakehian cast a dissenting vote.

No developers spoke at the meeting, but several had expressed concern over the fees at previous meetings.

The rates are based on a 2009 study conducted by consulting firm TischlerBise and adjusted for cost increases. Rates will be determined by the use of the commercial building, and some fees will be based on square footage and others will be based on number of rooms, beds or students.

Fees based on square footage are retail/restaurant, $6.96 per square foot;  business park, $7.70, office, $9.53, hospital, $8.23; school, $2.24; mini-warehouse, 9 cents; warehouse, $3.11; light industrial, $5.62. Nursing homes will be charged $877.64 per bed; day care, $389.60 per student; and lodging, $1,072.44 per room.

The council considers this to be an interim ordinance that could be revised after a new study is conducted in the future.

The fees become effective Sept. 7, three months later than previously suggested, allowing projects already in the planning pipeline to acquire building permits at the previous rates avoiding paying the linkage fee, and giving developers of future projects time to plan for the added cost.

Developers of commercial projects in Boulder already pay several impact fees that go toward transportation, police, fire and municipal facilities. The development excise fee earmarked for transportation is $2.48 per square foot, and fees for police, fire and city buildings range from 2 cents to $1.04 per square foot. Developers also pay a housing excise tax of 51 cents per square foot, which will be credited toward the new affordable-housing fee.

At the outset, developers will be required to pay 25 percent of the fee in four quarterly installments spreading out payment over a year.