Boulder study links home expansions to rising affordable housing needs

Boulder City Council's recent study session on April 10, 2025, spotlighted a significant nexus study that links home expansions to the growing need for affordable housing in the city. The analysis, presented by consultant Andy Ratchford, revealed that while home expansions increase property values, they also create a demand for affordable housing due to the influx of higher-income households.

Ratchford's findings indicated that Boulder experiences about 23 home replacements and 35 additions annually, with potential revenue from impact fees estimated at $1.2 million each year. The study focused on the economic chain reaction triggered by these expansions, which leads to increased job creation and, consequently, a heightened demand for affordable housing.

The analysis identified two key linkages: a demand nexus, where higher-income households stimulate local job growth, and a supply nexus, which was found to be less direct. Ratchford explained that while home expansions often remove lower-priced homes from the market, they do not necessarily equate to a loss of affordable housing for low and moderate-income families.

The study outlined three scenarios of home expansions, showing that new or expanded homes could increase in value by $875,000 to $3.5 million. This escalation in property value correlates with a need for affordable housing units, estimated at 0.15 to 0.45 units per project. The analysis also highlighted a significant financial gap, estimating that it would require about $220,000 in subsidies per affordable unit to bridge the difference between market rates and what is affordable for households earning 80% of the area median income.

As Boulder continues to grapple with housing affordability, the council plans to engage with various stakeholders, including the development community and the public, to inform policy changes. The next steps involve further analysis and potential code changes anticipated in the fall, aiming to address the pressing need for affordable housing in the face of ongoing development.