Planning board reviews nexus study recommending $15-per-square-foot fee for demolitions and large additions

The City of Boulder Planning Board on March 4 reviewed a technical nexus study that examines whether demolitions of smaller houses and replacement with larger homes — and significant additions to existing single‑family homes — create a measurable need for additional affordable housing and therefore justify an impact fee.

The study, prepared for the city by Gruen & Gruen Associates and summarized to the board by consultant Andy (Andrew) Ratchford, concluded there is a defensible “demand nexus” between expanded single‑family housing and increased need for workforce housing. Ratchford said the consultant’s analysis supports a per‑square‑foot fee and recommended the city set a fee no higher than $15 per square foot of added living area.

The study traces the proposed link in three steps: newer, larger homes sell for substantially higher prices and are more likely to be occupied by higher‑income households; higher household spending generates additional local jobs; and those jobs, in turn, increase demand for affordable and workforce housing. Ratchford summarized the approach and findings, saying the three prototypical project scenarios in the study produced estimates ranging from about 0.14 to 0.47 units of affordable housing needed per project, and that converting that need into the capital subsidy required to build or preserve affordable units yields a recommended fee in the roughly $15–$20 per square foot range. “We’re recommending the fee shouldn’t be more than $15 a square foot of added living space,” Ratchford said.

Why the study matters

City staff and the consultant said the study is intended to close gaps in the city’s current affordable‑housing tools. Boulder’s inclusionary housing (IH) requirements already require 25% of new housing to be permanently affordable, with options for on‑site units, off‑site units, donated land or cash‑in‑lieu. But the IH regulations include a waiver: if an existing unit is removed and replaced within three years, the replacement is often exempt from IH obligations. Staff said that waiver has led to a situation in which many newly built single‑family homes are not subject to IH contributions; those developers often pay no…