Boulder proposes $15 per square foot fee for residential construction impact

The Boulder City Council held a study session on April 10, 2025, focusing on proposed impact fees for residential construction projects. The discussion centered on quantifying maximum fees that could be justified for various scenarios, including smaller lot teardowns and larger home additions.

According to the analysis presented, the maximum fee for a smaller lot teardown is estimated at approximately $25,000, translating to $15 per square foot of additional living area. For larger lot teardowns, the fee could rise to about $44,000, or $18 per square foot. Smaller home additions not involving teardowns could incur fees around $14,000, equating to over $20 per added square foot. The variability in fees is attributed to different assumptions regarding home sale prices and buyer income relationships, rather than the size of the projects themselves.

The council was informed that these fee estimates are specific to Boulder and not derived from other communities. However, comparisons were made with other cities, such as Evanston, Illinois, and Denver, which have their own fee structures for similar projects. For instance, Denver's fees range from $5 to $8 per square foot for new developments, while Aspen's fees can reach as high as $45 per square foot.

The recommendation from the analysis suggests that if Boulder implements a fee, it should be a uniform rate of $15 per square foot for all projects that increase home size by at least 500 square feet. This would exempt smaller additions and major remodels that do not expand the home's footprint. The projected revenue from this fee structure could generate around $1.2 million annually for affordable housing initiatives, primarily from replacement and teardown projects.

The council members engaged in a dialogue about the implications of these fees, considering their potential to raise revenue without deterring development. The session concluded with a commitment to further explore the recommendations and their impact on the community.