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 September 1, 1999

AFFORDABLE HOUSING: INCLUSIONARY ZONING PROPOSAL

Objectives:

* To get at least 20 percent of all new units as permanently affordable.

* To express a preference for providing the permanently affordable units on site.

* To have permanently affordable units that provide a range of rents or prices.

* To ensure that these units are a reasonable size relative to the market-rate units in a given project.

* To provide some choices for developers to provide the permanently affordable units.

* To be easier to understand and administer than the current Residential Growth Management System (RGMS).

Inclusionary Requirement

Twenty percent of the total number of residential units and at least 20 percent of the attached, non-affordable residential square footage, and at least 12 percent of the detached, non-affordable residential square footage. A clause allows for negotiation of smaller-sized units.

Inclusionary zoning would apply to all new developments with residential units, with the exceptions below.

Transition Rules

* Projects that, under the current RGMS, are considered “pipeline” projects have until the end of 2001 to be completed. Any units remaining to be built after 2001 would be subject to the inclusionary requirement.

* Projects that have an executed agreement for city housing subsidy funds may develop according to their current plan; provide 30 percent permanently affordable housing and no restricted-unit housing; or return the funding and develop according to the proposed inclusionary requirement.

* Projects with approved reservation agreements have until Dec. 31, 2001 to obtain building permits for those units.

Options for Constructing Units

Three basic options for fulfilling the inclusionary requirement would be available: Make a cash-in-lieu contribution; dedicate land; or dedicate an existing unit to be permanently affordable. If the 20 percent calculation results in a fraction, the developer can round up to a whole unit or pay a pro-rated cash-in-lieu amount.

Of any remaining whole number of units, at least 50 percent of the required permanently affordable, for-sale units must be provided on site. If this 50 percent calculation results in a fraction, then that fraction shall be rounded up to a whole unit to be provided on site. Rental units may be provided on- or off-site. A clause allows staff to negotiate for more than 50 percent off-site, for-sale units if additional affordable housing benefits are provided or if zoning, environmental or legal restrictions make it impossible to provide the units on-site.

* Cash-in-Lieu: $55 times 20 percent of the total, non-affordable detached square footage; $50 times 20 percent of the total, non-affordable attached square footage.

* Land Option: Land to be donated or dedicated must be zoned to allow for the same number of units for which the land is to be substituted, be of a comparable, appraised value to that of the new development. City to maintain a list of acceptable appraisers, or be of a value that is equivalent to 150 percent of the cash-in-lieu option in order to cover administrative, transaction or improvement costs.

* Existing Unit: Developer may deed-restrict an existing unit to be permanently affordable. Rental units may only be substituted for rental units; for-sale units only substituted for for-sale units. Must be equivalent units based upon appraised value and subject to inspection and acceptance by the city.

Source: City of Boulder

Objectives:

* To get at least 20 percent of all new units as permanently affordable.

* To express a preference for providing the permanently affordable units on site.

* To have permanently affordable units that provide a range of rents or prices.

* To ensure that these units are a reasonable size relative to the market-rate units in a given project.

* To provide some choices for developers to provide the permanently affordable units.

* To be easier to understand and administer than the current Residential Growth Management System (RGMS).

Inclusionary Requirement

Twenty percent of the total number of residential units and at…

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