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Boulder leaders theorize coronavirus could influence trading extra building height for affordability

Work on new program underway, but market changes could render ineffective, Wallach worries

Fausto Ramos, with Sierra Rebar LLC, ties rebar before pouring concrete at a construction site for a housing development at the intersection of 30th and Pearl Streets on Wednesday, April 15, 2020, in Boulder. (Jeremy Papasso/Staff Photographer)
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Boulder City Council this week pondered whether an effort to create more consistency for developers seeking exemptions to build taller, denser or larger structures than normally allowed by zoning would be helpful to continue during the economic fallout from the coronavirus pandemic.

Started in 2018, the so-called community benefits program has been partially completed, with Council last year adopting requirements to provide the city more affordable housing than the standard in order to receive height modifications for buildings above 35 or 38 feet, which are the limits in most Boulder zoning districts. Industrial zones allow buildings up to 40 feet.

Now, city leaders are considering additions to the menu of eligible trade-offs, emphasizing the provision of below-market-rate commercial space as an option to receive a bonus above allowed building size. Whether the plan as envisioned should move forward, and if it will be helpful in the attempt to rebound from the financial crisis starting to settle in for many as government-ordered building closures and limits on gathering continue amid the viral outbreak of the COVID-19 illness, was top of mind for Councilman Mark Wallach.

“The issue is whether we ought to be engaging on this at the moment when we have no idea what the market for these kind of projects is going to look like in the post-COVID world. We don’t know what kind of financing is going to be available, we don’t know what kind of demand for the upscale housing that drives these projects is going to be in existence,” he said.

The municipal charter’s 55-foot height limit imposed in 1971 previously allowed developers to ask for modifications to more restrictive zoning regulations to allow buildings up to the citywide cap. In 2015, though, a temporary ban on considering exemptions to the zoning district rules went into place, prohibiting buildings from having fourth or fifth floors in most cases, except in a select few areas of the city where exceptions are still allowed to be requested and potentially granted through the city’s site review process, or when 40% or more of housing units in a project would be made affordable.

Those areas are University Hill, 29th Street Mall, Boulder Junction, Gunbarrel, a small block on north Broadway, a block west of Foothills Parkway just south of Baseline Road and an area on the north side of Arapahoe Avenue. Officials last year added the city-owned Alpine-Balsam former hospital site to the list where 55-foot buildings could be granted.

City staff is performing an analysis of each municipal zoning district to highlight the pros and cons of allowing building heights greater than 35 feet in areas outside those nine small areas of Boulder. The analysis aims to inform a future Council decision on whether to maintain restrictions on height exemptions to those areas, add more where they could be allowed or remove the restriction entirely and allow structures above zoning heights anywhere when adequate community benefit is provided by a project.

While leaving in place the mere handful of places where four- and five-story buildings could be erected, Council last year approved a process that would allow developers to make 36% of a residential project’s units above the height limit in a fourth or fifth story affordable dwellings to low and middle income households. That’s more than the normal 25% requirement for new buildings under the 35, 38, and 40-foot height limits, and for floor area beneath the limit in buildings that exceed the height limit.

For non-residential projects, developers are now subject to affordable housing linkage fees that are 43% more than standard rates for the square footage above zoning district height limits, in order to go higher than local codes normally allow. The standard fee for office space below height limits are currently $24.14 per square foot and will jump $30 in 2021; the fees vary by land use, with lower fees for retail, warehousing and light industrial spaces.

Replicating such a system for non-residential benefits is now the city’s next step for the project.

“For the next couple years, all commercial space may end up being affordable depending on the impact of this calamity,” Wallach said. “… Or possibly not. But I think we need to see and understand before we spend a lot of time on this particular project.”

Local architect Bryan Bowen, who is fresh off of serving a stint on the Boulder Planning Board development review body, continues to push the city to open up the community benefits program to allow affordable housing for extra height trade-offs across more of the city, rather than only in the limited handful of areas.

Since the new option went into effect in January, no applications making use of it have been sent to the city, officials said this week, and letting it apply to a wider range of Boulder could help attract some to allow Council to analyze its efficacy and inform decisions on its second, affordable commercial-space phase. How such spaces would be managed and overseen, including what would determine which outfits could use them, are of interest to Bowen.

“Even before COVID, I was very dubious about the whole affordable commercial thing. I’m definitely not convinced,” Bowen said. “Yes, it’s hard for nonprofits to find space, but the businesses that we’re losing are mostly not nonprofits. They’re mostly Juanita’s restaurant, or the tire place, the muffler guy, the picture frame shop. They’re businesses that you really couldn’t say, aside from their contribution to being a vibrant urban environment, that they’re really community causes.”

Whether providing spaces for arts uses should satisfy community benefit criteria to allow for extra building height was debated by officials, with Councilwoman Mirabai Nagle agreeing with Wallach that the city should focus on developing below-market rate housing and business space.

“After what we’re experiencing now with COVID, I would love to see us really strongly focus on affordable commercial space for small businesses. I have a feeling that we’re going to be missing many, many small businesses after this event, which is going to be heartbreaking because we’ve lost so many already,” Nagle said.

Mayor Pro Tem Bob Yates believes allowing affordable commercial space to be dedicated to arts, businesses or human service providers could all be achieved through the program that could let additional building height occur.

“I think that’s really one bundle,” Yates said.

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