As Boulder looks to loosen ADU rules, conversation hinges on affordability

If you go

What: Public hearing on ADU regulation changes

When: Meeting starts 6 p.m. Tuesday. Sign-ups to speak at public hearing begins at 5 p.m. Comment is expected to last three hours and follow a 45-minute public hearing on another matter

Where: 1777 Broadway

By the numbers: Boulder‘s ADUs

$1,350 median monthly rent

711-738 square feet, on average

85 percent include utilities in rent

75 percent of tenants earn below $80,000 per year

As Boulder City Council looks to adopt rules to ease the regulatory burden on accessory dwelling units, the conversation has become centered around one thing: affordability.

Some council members and opponents of more lax rules say any changes should be tied to permanent affordability. But proponents of dwellings say doing so has never worked, and will effectively kill expansion of so-called granny flats in the city.

“To date there haven‘t been any successful examples of affordable restriction” on ADUs, said Kol Peterson, a national advocate for the structures. When affordability is mandated, “people do not build ADUs.

“They‘re developed by amateur homeowners, so the last thing they want is more bureaucracy when they‘re already entering most complicated project of their life.”

Staff research found that was in the case in Santa Cruz, Calif., which established a fee waiver program for homeowners who renters to tenants earning 50 percent area median income or lower. It resulted in few additional ADUs.

By their nature, ADUs are more affordable, said Jay Sugnet, senior planner. Research demonstrates that 58 percent nationwide are cheaper than comparable, market-rate apartments; Peterson said that 17 to 20 percent are rented for “far less” than market rate, and 8 percent for free, typically to family members.

An accessory dwelling unit, attached to Kathleen McCormick‘s home on the 5000 block of 11th street, is pictured in Boulder on Friday. ()

In Boulder, the median ADU costs $1,350 a month, which — depending on what market rate data you look at — is either vastly cheaper or slightly more pricey than similar apartments.

Chris Salviati, a housing economist for Apartment List, said median rent in the city of Boulder is $1,142 for a one-bedroom. Sugnet initially used Zillow data in his comparison, which shows one-bedrooms renting for $1,600 per month, though council requested additional sources.

Sugnet said Zillow‘s methodology makes it a better source than others; Boulder Housing Partner Executive Director Jeremy Durham agreed, saying Zillow‘s numbers are more reflective of conditions on the ground.

Because ADUs fall between one- and two-bedrooms, size-wise — the average Boulder ADU is 711 to 738 square feet — comparisons to one-bedroom rates along are not that helpful. Apartment List puts Boulder‘s average at $1.99 per square foot; Zillow places it at $2.12.

ADUs here, according to city data, are leased for a median of $1.82 per square foot, and the vast majority include utilities. Looking across the range of available data, Sugnet said, ADUs are more affordable when their rents are dictated by the market.

“A core value of the (city‘s housing plan) is a diversity of types and prices,” he said. “We can‘t rely on deed restriction to accomplish that alone. We do need to rely on the market, and this is a great opportunity.”

Councilman Sam Weaver, who first suggested that any regulatory relief be tied to mandated affordability, disagrees that ADUs are doing enough on that front.

“Fifty-eight percent of units are market-rate or below. That means 42 percent are not,” he said. “I‘m not a supply-sider. I‘m not sure adding more necessarily gets your more affordability.”

Councilwoman Mary Young appears supportive of price restrictions as well. In an email to council and staff, she cited Boulder‘s middle-income housing strategy, approved in 2016, which mentions this issue specifically.

“Amend some or all requirements in the ADU ordinance to allow more ADUs … within the city,” it reads. “Ensure that the ordinance results in deed-restricted units.”

Peterson believes Boulder‘s strict regulation of ADUs has prevented their proliferation, exacerbating the city‘s housing crunch. Linking affordability to leniency will only continue that trend.

“It‘s a novel approach,” he said. “But if history is any indication, I don‘t think it will work.”

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