Impact of Boulder's New Co-Op Law

by Osman Parvez
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At 1am this morning, a bleary-eyed Boulder City Council approved the new co-operative housing ordinance by a vote of 7-2.  It was one of the most contentious real estate related issues to face Boulder in recent years, probably the most since Compatible Development was passed nearly 8 years ago.  


Boulder needs more housing supply. The way forward is to selectively allow for higher density while maintaining the character of our existing neighborhoods and quality of life.  No easy trick. 

The new measure contains a litany of rules to establish a co-op, as well as some new fees (of course).  It will have interesting impacts, some unintentional. Let's take a look. 

Summary of the New Co-op Ordinance:
who gets top bunk?

  • 12 residents max in low-density districts, 15 in other districts.
  • At least 250 SQFT/person required in low-density districts. 200 SQFT/person in others.
  • No lot size requirement.
  • SQFT exemption for permanently affordable coops possible on the basis of Planning Board recommendation.
  • 3 types of co-ops allowed: Not-for-profit permanent affordable, private equity, and rental.
  • Maximum of 10 licenses issued per year but expandable to 14 under certain conditions.
  • 4 year license renewal cycle, 2 year licensee recertification and inspection cycle.
  • Must be at least 500 feet apart at the property line.
  • No co-ops will be allowed in dwellings with less than 2000 SQFT of habitable space (intended to limit multi-family properties becoming co-operatives, unintended effects below).
  • Max 3 on street cars allowed.
  • Smart Regs and rental licenses still apply.
  • The city manager can arbitrarily deny licenses if a cooperative is "not legitimate" or multiple complaints are received about parking, weeds, or trash.   
  • Coop license fee: $645 (oy!)

Impact of New Co-Op Ordinance: 

  • With at most 14 new licenses per year, the impact on market rent will be virtually nil. Very little new housing supply will be created.  Have no fear, Boulder will remain #1 in bathroom to resident ratio.    
  • Boulderites who have chosen to live a low impact, minimal, more sustainable way of life by living together now have a legitimate option. 
  • Some neighbors will be unhappy about the new cooperative next door. Most will welcome their neighbors. 
  • Licensed coops will be under incredible scrutiny. 
  • Most long standing over occupied properties will likely remain unlicensed because the burden to establish and maintain a legal coop will be deemed too high against the low risk of getting caught. Flying under the radar will remain more popular.
  • Private equity co-ops will be the least utilized form of ownership as making the deal work between multiple owners can be complicated. Landlord owned rental co-ops will likely be the first created, followed by non-profit coops created by established agency players.
  • The 2000 SQFT of habitable space rule will limit coops to neighborhoods with larger houses. Martin Acres and Baseline, where the small ranch style homes dominate, will see few if any co-ops. Other neighborhoods will see more. 
  • Habitable cannot be newly created, so this ordinance will not spur any additional construction, although owners contemplating expansion now have yet another reason to do so as new square footage is seasoned. 
  • Demand will rise for 2000 SQFT+  delapidated Boulder houses with multiple bedrooms, legal or otherwise.       
Conclusion: The limited license approach is a smart way to test-drive the ordinance and manage the way to higher density. City Council will repeal if it's a failure.  
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