Council pauses immediate adoption of lower 2025 inclusionary sales‑price ceilings; asks staff for targeted follow‑up

Longmont housing staff presented updated calculations for the inclusionary housing maximum sales prices for 2025 and sought council direction after developers, builders and Habitat for Humanity flagged potential harms if lower ceilings were implemented immediately.

Housing director Molly O’Donnell said updated inputs — notably higher homeowner‑insurance costs and interest‑rate effects — reduce buying power and therefore lower the calculated maximum sales prices, particularly at the 60% and 80% AMI levels. Staff said those changes reflect market conditions but also make it harder for market‑rate developers to produce for‑sale affordable units without subsidy.

Nut graf: After presentations and public comment from Habitat for Humanity, council decided to hold the 2024 sales‑price maximums for now and asked staff to update homeowners‑insurance and similar data annually (instead of every three years), to research programmatic options and to return with ordinance language and more analysis. Several councilors also requested additional study of raising the “capital‑A” affordable limit to 100% AMI to better align with other funding programs and Longmont’s housing needs assessment.

Council heard several program options: updating 3‑year data sources more frequently; allowing developers to lock the applicable sales‑price maximum at entitlement recording rather than certificate of occupancy; modifying middle‑tier incentives for attainable homes; raising the capital‑A threshold to 100% AMI; and exploring interest‑rate buy‑down calculations. Councilors expressed concern about complexity and transparency for interest‑rate buy‑down approaches and preferred options that improved certainty for developers.

Staff emphasized the program’s guiding principle: sales‑price maximums aim to protect buyers’ long‑term affordability and financial stability. Councilors and developers noted the problem is broader than the sales‑price formula — rising construction costs, insurance and lending conditions are constraining supply.

Ending: Council directed staff to (a) hold 2024 sales‑price maximums for 2025 while staff refines options; (b) update homeowners‑insurance and related data on an annual basis; and (c) return with code amendments and analysis of raising the capital‑A affordable threshold to 100% AMI and related fee‑waiver implications.