Louisville could boost inclusionary housing requirement to 30% for certain developments

LOUISVILLE — With housing affordability a seemingly intractable issue across the Front Range, municipal leaders in Louisville are considering an aggressive new measure to increase the availability of housing that’s accessible to a wider swath of the income spectrum. 

An ordinance was introduced this week that would require at least 30% of units in certain types of developments be made permanently affordable for those who earn less than area median income, or AMI. 

Projects that fall under this new inclusionary housing requirement are those that are rezoned from a nonresidential commercial zone district to a residential zone district, approved for

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residential uses through a general development plan, or approved for residential uses through a special review use in a commercial zone district.

The ordinance would also require the units to be constructed on-site, with no alternative option,  such as the payment of fee-in-lieu. The requirement under current city code is for all properties to include at least 12% affordable housing, but there are other alternatives such as fees-in-lieu.

Louisville’s 30% inclusionary housing requirement would be one of the most ambitious in the region. Other Boulder County municipalities have requirements that range from about 10% to about 25%, planning documents show. 

“If a target is set too low, the city would not maximize the potential for additional affordable units in new development,” a city memo said. “If a target is set that the local market does not support, then the inclusionary program could unintentionally create a disincentive to the creation of new housing and exacerbate the lack of affordable housing in the community.”

Louisville’s Planning Commission voted unanimously to recommend approval of the ordinance, but suggested that staff “complete further analysis on the feasibility of the 30% requirement and look into adding additional incentives for developers.”

The Colorado Department of Local Affairs provided the city with a $60,000 grant last fall for the development of a housing study. That study was delayed in part by the Marshall Fire but is expected to start later this year and wrap up in 2023.

The Louisville City Council moved the new inclusionary housing requirements ordinance forward on first reading this week without any discussion. A public hearing for the measure will be held Sept. 9.