Planning board approves $15 per sq. ft. affordable‑housing impact fee for large single‑home rebuilds and major additions

The Boulder Planning Board voted to recommend City Council adopt an affordable‑housing impact fee aimed at restoring contributions from single‑family replacement homes and major additions that are not otherwise covered by the city’s Inclusionary Housing program.

Jay Segnet of Housing and Human Services told the board the ordinance would apply a $15 per square foot impact fee to new above‑grade square footage created by demolitions followed by a new single‑family home and to substantial additions (an addition of 500 square feet or more). Segnet said accessory dwelling units (ADUs) and renovations that do not increase gross floor area would be exempt, and demolished square footage would receive a credit under the proposed approach.

The rationale: staff and a retained consultant (Gruen and Gruen) concluded that replacing smaller, older homes with much larger new houses increases local demand for services and housing and that large‑scale rebuilds are often priced for much higher income households. The fee is intended to mitigate those impacts by contributing to Boulder’s affordable‑housing fund.

Key technical points: the draft ordinance proposes a $15 per square‑foot charge on new square footage created by demolition and replacement or by large additions, with these relevant exemptions—new or replaced homes under 2,000 sq. ft. would be exempt; accessory dwelling units are exempt; the first 500 sq. ft. of any addition would not be charged. Segnet said projected annual revenue at the proposed rate would be about $1.2 million a year based on historical teardown/addition activity (an estimate derived from recent permit trends); funds would be restricted to affordable housing activities and can be leveraged with other public funds.

Board discussion and public comment: commissioners asked about the study methodology and whether the consultant’s analysis used local permit and sales data. Segnet said the analysis used local permit and sales data and the consultant’s standard economic methodology; staff noted one remaining technical clarification about whether below‑grade (basement) area should be included or whether the fee should apply only to above‑grade square footage. The staff‑recommended language leaves that point to a consultant clarification and a follow‑up technical memo before Council action.

Public comment included calls both for a larger fee and for the study to be revised. Robert Ross, a member of the public, said the consultant study was “the sole justification” for the fee and said he believed it had analytical problems; another commenter urged a larger fee. Planning Board members who supported the recommendation emphasized equity: if large new homes create greater demand and remove lower‑cost stock, those projects should help fund affordable housing.

Vote and next steps: Planning Board voted to recommend City Council adopt the ordinance (motion carried; vote recorded 5–0). Staff said Council is tentatively scheduled to hold hearings Oct. 9 and Oct. 23; staff proposed an effective date of Jan. 31, 2026 to permit administrative setup and public notice.

What’s next: staff will finalize the consultant clarification about below‑grade area and will provide final ordinance language and implementation procedures to Council for the scheduled hearings.