Introduction and Scope

The numbers tell the entire story for housing availability and affordability in Boulder. The median home sales price in Boulder increased to over $1 million in 2022 and has hovered above the $1 million mark ever since. The household income required to afford a $845,000 home is $189,000 with an average down payment of $169,000 and a monthly mortgage payment of $8,000. These numbers make homeownership unattainable for most middle-income earners and sets the stage for a community that steadily loses its middle-income households.

The outlook is not as dire if we examine only condo and townhome attached housing types. The median sale price for these units is currently at $525,000 (2024). This is encouraging data since it shows that there is significant opportunity in addressing middle-income housing challenges by increasing the availability of more diverse missing-middle housing types.

Figure 1 summarizes these trends [9].

Figure 1: Snapshot of Boulder’s Housing Sales vs. Area Median Income (AMI)

The rising cost of housing has made it increasingly difficult for middle-income households — teachers, nurses, first responders, and small business owners — to afford to live in the city. Better Boulder wants to change that and addresses the housing needs of middle-income households and potential solutions for the city in this paper. Our focus on smart growth, sustainable urban planning, and equitable housing policies can help expand the availability of middle-income housing and create a more inclusive and vibrant community. Through policy advocacy, data-driven decision-making, and community engagement, Better Boulder aims to support changes at the City, County, and State levels that will increase middle-income housing affordability and availability while maintaining Boulder’s character and sustainability goals.

In researching this paper, we looked at a broad spectrum of housing types and costs and decided to focus on recommendations for addressing middle-income home ownership. We offer some relevant perspectives on Boulder’s Inclusionary Housing Program (for those making up to 80% of AMI), which we have included in Attachment 1. We realize that an affordable and accessible rental market that protects the best interests of property owners and renters is critical for many middle-income earners, and we have included some thoughts on that subject in Attachment 2.

Better Boulder’s membership includes many individuals with experience in land use policy, housing development, and affordable housing. Even with this expertise, we realize that our ideas are insufficient to comprise a comprehensive solution to middle-income housing in our region. We offer these ideas to encourage Boulder to continue to be bold in trying new and innovative approaches for middle-income housing, and look forward to continual engagement with city staff, elected officials, and boards/commissions.

Middle-Income Home Ownership Challenges

In 2024, Better Boulder formed a subcommittee focused on zoning and housing issues. Members of the subcommittee who are experienced in collecting and evaluating data have assembled extensive background information (see references below) to get both a snapshot of Boulder’s current housing challenges and a history of how those challenges have been trending in recent years. These challenges are key considerations in evaluating approaches to address middle-income home ownership.

Current Housing Demand vs. Inventory

  • In recent years, we have seen data showing as many as 65,000 people commute into Boulder daily for work. There is much evidence that many of these in-commuters serve critical needs in our community (from our business workforce to police, fire/safety, and education personnel), and that people with modestly paying jobs are not finding it possible to live within Boulder’s city limits. While not all of these in-commuters want to live in Boulder, many do, and they are unable to find housing that meets their needs and price range. They end up living elsewhere, which drives up our collective carbon footprint.
  • Studies have indicated that Boulder needs approximately 10,700 new housing units by 2032 to stabilize prices and meet demand. Studies have also indicated the need for a greater variety of housing, in line with the BVCP commitment to “a diversity of housing types and price ranges.”
  • Home prices have remained around 10 times the median household income, making homeownership increasingly unattainable. It is a generally accepted concept that mortgageor rental costs should be no more than about one-third of monthly household income (“30% rule”).

Housing Supply Gaps by Income Level

  • Low-Income (0-80% AMI): There has been progress through inclusionary housing policies that have been actively pursued since 1991, with acceleration over the last decade. See Attachment 1 for Better Boulder’s perspective on continuing to prioritize the critical existing Inclusionary Housing program. Boulder’s progress is laudable, but much remains to be done as rents outpace the retail and service incomes of the workforce that keeps our economy ticking.
  • Middle-Income (80-120% AMI): While there are some concerns about rental affordability (Attachment 2), data shows that there is an accelerating gap in home-ownership affordability for families in the middle-income range. Figure 2 is a commonly used graphic from Daniel Parolek’s book, Missing Middle Housing [7], that shows the housing types in the middle. Boulder has extensive data showing that demand exceeds supply of these housing types. The city has seen limited success in addressing this disparity in recent years.
  • High-Income (120%+ AMI): Current zoning and land use policy in combination with high regulatory costs and city fees results in higher-end homes and higher-end apartments being the only product categories that make financial sense in the use of residential land in most of Boulder.. When market-rate development favors the higher end of the spectrum, affordability challenges are exacerbated, and the missing middle becomes infeasible.

Figure 2: Missing Middle Housing concept created by Daniel Parolek/Image ©Opticos Design, Inc./For more info visit www.missingmiddlehousing.com

The mismatch between income levels and available housing means that many middle-income earners who wish to own homes are forced to either live outside of Boulder and commute or pay an unsustainable portion of their income on housing.

Boulder’s Middle Income Housing Strategy

The city produced an important Middle Income Housing Strategy in 2016 [1] and has also kept the public informed of progress in housing affordability [2]. The stated goal is to have 3,500 middle-income affordable homes by 2030. We appreciate the city’s attention to this problem, but meaningful progress has been a challenge. We encourage our community to be bold in welcoming additional innovative approaches to making housing more available and affordable to the middle-income residents who are integral to our economic and community vitality.

Boulder’s Middle-Income Down Payment Assistance (MIDPA) Pilot Program implemented over the last two years was a well-intentioned advancement, but no community members have taken advantage of MIDPA even though up to $200,000 has been offered in mortgage assistance. A household earning the top end of the MIDPA eligibility range — about $124,000/year — typically qualifies for a mortgage of approximately $450,000 to $500,000. Yet Boulder’s median home price remains close to $1M. Even with the program’s maximum $200,000 in assistance, buyers could be left needing a mortgage of up to $900,000 — well beyond what most middle-income families can realistically qualify for [8]. This challenge, in combination with the resulting property being deed restricted, has made the program unattractive to home buyers.

Boulder’s House to House Ownership (H2O) Program has been much more successful. This program provides first-time homebuyers with a loan of up to $100,000 to enjoy all the benefits of investment in a market-rate home with no resale restrictions. Better Boulder encourages the City of Boulder to continue this program as yearly budgetary constraints allow.

Public Policy Solutions and Priorities

There are two general ways to help households afford a home that they otherwise couldn’t: bring the price down or provide a rent or purchase subsidy to increase buying power. This paper primarily addresses the former: how best to use policy tools to bring the price down, though we do offer some ideas for additional revenue generation to fund new and existing assistance programs.

Housing prices are impacted by regulatory barriers including:

  • Excessive permitting fees and delays that increase construction costs and discourage developers from adding housing
  • Zoning restrictions, including building heights, that limit multi-unit development.

The price of housing is also determined by two driving factors: market force, which has enormous impact, and Total Development Cost (TDC). Within TDC are three categories of expense:

  • Hard costs: labor, materials, infrastructure improvements
  • Soft costs: professional fees, permitting, financing, administration, builder’s insurance
  • Land costs: acquiring the real estate

These three categories can be a helpful framework for thinking about strategies for public intervention. Since these costs are passed on to homeowners and renters, it is always important to consider how public policy can have an impact. The city has limited impact on hard costs, and we encourage the city to continue to look for ways to streamline or reduce the soft costs involved in developing affordable residential properties. But clearly, the most significant component of TDC that can be targeted by public policy is dealing with the ever-increasing cost of land in our region.

Land Use and Zoning Issues

Historically, Boulder’s zoning policies have limited the potential for middle-income housing development by favoring single-family homes. This has contributed to the affordability crisis by restricting the types of housing that can be built.

Relaxing exclusionary land use and zoning remains the most straightforward and necessary approach to increasing housing availability. Colorado’s state legislature has been enacting laws that require communities like Boulder to make progress, and we are happy to see the city step up to the challenge.

The Boulder Valley Comprehensive Plan (BVCP) was last revised in 2015, and the city has been enacting ordinances within the constraints laid out in the land uses defined in this document. We are at a critical time frame in working on the 2025 BVCP major revision, and we strongly encourage an assertive approach to laying the groundwork for zoning for affordability.

Recent Zoning Changes

  • In recent years, Boulder has relaxed exclusive single-family zoning on larger lots in residential zones, allowing duplexes and triplexes.
  • ADUs (Accessory Dwelling Units) have been made easier to build.
  • Parking policies are being revised to consider the high cost of public space dedicated to cars, and parking minimums for new and existing development are expected to be removed from city code.
  • Occupancy limits have been revised to encourage more inclusive ways for people to share residential space.
  • Relaxed restrictions on cooperative housing have been in place for almost 10 years.
  • Use Tables have been updated to be more accommodating of mixed-uses in appropriate zones.
  • The city’s first Transit Oriented Development (TOD) zones were created with the East Boulder Subcommunity Plan.

Further Reforms Needed

  • Allow missing-middle housing by-right in more neighborhoods, with special attention to home-style condos or townhomes that have exterior entrances and small yards or fenced-in patios.
  • Allow groups of dwelling units to share utility connections, electrical meters, solar gardens, and other common elements to increase cost efficiency and sustainability.
  • Encourage more TOD near key bus routes and transit hubs.
  • Increase residential density and intensity, beyond expanding uses, in some zones. Specifically, the mixed business and residential zones (such as BC, BR) can provide a “string of pearls” of mixed-use transit hubs while accommodating more residential use.
  • Find ways to streamline and reduce permitting hurdles for projects that offer affordable homes.
  • Look for ways to accommodate innovative in-fill proposals such as pocket neighborhoods and multi-unit configurations on large lots.
  • Where appropriate, reduce minimum lot sizes in low-density zones to encourage subdivision into lots that accommodate smaller dwelling units.

Better Boulder members are sympathetic to the concerns that, in a city as attractive as Boulder, the critical component of land use and zoning is not the only tool required to achieve affordability goals. Supply side solutions are necessary but not sufficient to address the need for missing-middle housing and the needs of middle-income households. While we have noted the successes of the current Inclusionary Housing program, other approaches must be considered to address middle-income homeownership.

Regulatory and Policy Issues Beyond Zoning

Several interesting and innovative housing affordability approaches have been discussed over the years. We’ve attempted to put the following ideas in priority order.

Enhancements to traditional land-use and zoning approaches can be very powerful in providing the proper financial incentives for middle-income home development:

  • Allow height and density bonuses for developments that include middle-income units.
  • Consider middle-income housing types as a community benefit, and streamline permitting hurdles and costs for affordable and middle-income housing projects.
  • Prioritize middle-income housing with city-owned land and annexation opportunities. The future of the Area III Planning Reserve is in evaluation, and Boulder will have significant leverage with the outcomes. Special attention should be paid to what housing types may be in short supply in Boulder.
  • Identify areas where lower-cost modular housing can be created with Boulder’s modular housing facility.
  • Along with the zoning and land-use changes recommended above, expand policies that encourage co-housing, pocket neighborhoods, co-ops, and other small residential communities.
  • Advocate for good policies at the State level. Recent legislation, such as the single-exit stairway allowance for multi-family structures, can ease cost barriers. Boulder should continue to advocate for legislation, such as reforming condo defects regulations to reduce litigation risks.

Cultivate partnerships with other private and public interests:

  • Continue to work on regional approaches, especially with Boulder County, that address the City of Boulder’s needs. In 2023, the voters approved Issue 1B, Affordable Housing Sales and Use Tax Extension. These funds should be made available to the cities within Boulder County, based on need, in addition to funding county projects outside city limits.
  • Consider Land Trusts as an innovative way to create affordable resident-owned neighborhoods. Boulder should leverage the knowledge of partners like Thistle to see what opportunities exist in this space.
  • Work with existing property owners where mixed-use TOD opportunities may exist. The current project at 28th Street and Iris (Diagonal) is a good example of what can happen when property owners see opportunity in expanding neighborhood centers as more residential-focused:
    • Create 15-minute infill neighborhoods: Identify vacant or underused infill sites with potential for missing-middle housing types appropriate for middle-income households, including duplex, triplex, quad, multiplex, courtyard apartments, and small condo buildings.
    • Work with owners of underused shopping mall parking lots, for example, Basemar, Meadows, and the remainder of Diagonal Plaza that could be redeveloped with housing.
    • Redevelop dated strip malls on 28th, 30th, Arapahoe, Baseline, Broadway, and other commercial corridors to allow for second and third stories with housing.
    • Check potential for housing development at RTD sites. RTD is looking to sell Park-N-Ride sites adjacent to transit stations: check the potential for housing (denser apartment buildings, but also missing-middle housing types like townhomes, quads, and small condo buildings on edges next to single-family neighborhoods). Consider RTD sites at 27th and Broadway Park-N-Ride, Church of the Nazarene Park-N-Ride at 3100 Dartmouth for redevelopment with housing.
  • Co-develop land owned by faith-based communities. Some Boulder churches and other faith communities have large sites or downtown sites adjacent to transit and services (several already have been developed, such as Trinity Lutheran and Grace Commons; Christ of Science Church at 2243 13th St is on the market).
  • Co-develop land owned by BVSD and/or Boulder County. (North Broadway Complex at Iris is on market.)
  • Look for opportunities for Transferable Development Rights (TDR) to encourage development within city boundaries while protecting critical open space from suburban sprawl development.
  • Encourage employer-assisted housing partnerships. Boulder should address the jobs-housing imbalance, and work with employers to promote housing opportunities (assistance or production) that will attract their desired workforce without requiring long commutes.

Identify new sources of revenue that could be used for middle-income programs. Such funds could be used to expand Boulder’s down-payment assistance programs for middle-income homebuyers (H20, MIDPA) or subsidize covenant-protected permanently affordable units:

  • Consider new fee and taxation mechanisms that can increase revenue for affordable housing projects. Luxury home taxes, second home taxes, and home vacancy fees are mechanisms that seem to have broad public support. Since such policies are restricted by TABOR, it will be important to educate the public and assure success at the ballot box.
  • Pursue opportunities to make impact fees more progressive so that high-end luxury-home projects pay a larger share into Boulder’s affordable housing programs, and affordable projects pay less. It should be a goal to minimize the impact of inclusionary housing and impact fees on middle-income housing units.

Better Boulder recommends that the city consider including as many of these ideas as possible into the work-plan over the next several years.

Conclusion – a Vision for Boulder’s Future

In collaboration with the County and State, Boulder has long been a national leader in showing how to keep development within city boundaries to reduce sprawl. The beautiful open space in our region can inspire us to assure that having limited areas for development doesn’t prohibit us from being able to accommodate the housing needs of people who live, work, and recreate in our community.

To maintain Boulder’s identity as an inclusive and sustainable city, housing must be made available for a range of income levels. Our vision includes:

15-Minute Walkable Neighborhoods

  • Prioritizing mixed-use zoning to ensure that residents have access to jobs, groceries, schools, and parks within a 15-minute walk.
  • Encouraging the development of small-scale retail and services within residential areas.

Sustainable Growth and Smart Planning

  • Using city-owned land for middle-income housing.
  • Expanding transit connections between Boulder and neighboring communities.
  • Reducing urban sprawl by increasing density in key areas.

How Big Should Boulder Be?

  • Boulder can accommodate responsible growth without losing its character.
  • Expanding housing options within city limits reduces pressure on surrounding areas and prevents excessive commuting and sprawl.

Better Boulder recognizes the talent and energy the city’s boards and commissions bring to the table. The efforts of those serving on the Housing Advisory Board, Planning Board, Transportation Advisory Board, and Boulder Housing Authority, in collaboration with City Council and City Staff have a huge influence on affordability initiatives. It may be a good time to look at how to most efficiently draw from this pool of experts to coordinate approaches to housing affordability. Whether this is addressed through the existing groups or creating a new missing-middle task force, Better Boulder looks forward to engaging in this process going forward.

References

  1. City of Boulder. (2024). Housing Market Trends and Affordability Report.
  2. City of Boulder. (2016). Middle Income Housing Strategy.
  3. Boulder Reporting Lab. (2024, Sept 19). 10,700 new homes needed: Study highlights Boulder’s housing shortage.
  4. National Association of Realtors. (2023). Housing Affordability Index – Boulder, CO.
  5. Redfin. (2025). Boulder, CO Housing Market Trends (Jan 2025).
  6. San José Spotlight. (2020, Feb 6). San Jose looks at ways to increase housing for middle-income workers.
  7. Parolek, Daniel G. (2020). Missing Middle Housing – Thinking Big and Building Small to Respond to Today’s Housing Crisis.
  8. Information Real Estate Services (RES) courtesy of the Boulder Area Realtors Association (BARA)

Attachment 1 – Boulder’s Existing Inclusionary Housing Program

Boulder adopted the Inclusionary Housing (IH) ordinance in 1990. In 2019 the City of Boulder set a goal of reaching 15% of housing being permanently affordable by 2035. Boulder is currently at 8.7%. It has taken 35 years to reach this mid-point, which indicates that development of affordable housing through this program will need to continue at a substantially accelerated pace over the next 10 years. Better Boulder supports the progress of the affordable program toward its 2035 goal.

Boulder’s IH policy, which requires that 25% of new residential development be permanently affordable, has made a significant impact on low-income housing availability. However, it has done little to create homeownership opportunities for middle-income earners. It must be noted that any shift in priorities and resources toward impacting middle-income housing would have a consequence of reducing resources for the existing Inclusionary Housing Program. Better Boulder recommends that the Inclusionary Housing Program remain dedicated to adding housing for households with incomes up to 80% AMI and focus the middle-income housing discussion on land use and other local policy tools.

Progress Since the Early 2000s

Over 3,767 permanently affordable housing units have been created. Boulder’s Inclusionary Housing Program gives developers the option of providing (25%) on-site affordability on new housing or paying “Cash-In-Lieu” (CIL) to the city.

While there have been some instances where developers have chosen to meet these requirements on-site, many choose the CIL option to avoid the complexity of creating and managing affordable units. Better Boulder has seen that the public seems to favor on-site development without understanding the legal and procedural barriers involved in on-site units and without an appreciation for the tremendous leverage that CIL payments provide for the city’s inventory (experts have estimated that cash-in-lieu provides four to five times the leverage of developing on-site units).

Partnership with not-for-profit entities like Boulder Housing Partners has produced excellent outcomes in Boulder, and local housing experts have said that the creation of 100% affordable projects with public funding is more efficient and impactful. Examples of successful completed and in-progress projects: 30th and Pearl, Arapahoe East, and Canopy at Red Oak. The city’s website shows how these affordable neighborhoods have been seeded in all parts of Boulder and are well-integrated with their communities.

Attachment 2 – Some Observations on Rental Affordability

Median rent in Boulder is approximately $2,600/month, requiring an annual income of over $104,000 to be affordable under the 30% rule. This does make Boulder’s rental market expensive, but not completely out of reach to families near the AMI.

Rental units are a key component of the inclusionary housing program, and it is useful to break down the tools available to Boulder’s inclusionary housing program.

When Boulder adopted the Inclusionary Housing (IH) ordinance in 1990 it was seen as an innovator in affordable housing. There was only one other existing program at the time (Montgomery County, MD) and Boulder distinguished itself from Montgomery’s program by introducing the concept of permanent affordability. The wisdom of this decision has proven itself repeatedly. The following section invites us to consider whether there are other strategies for deed restriction that have not yet been considered.

When Can a Local Government Impose Rent Restrictions?

1. Public Subsidies or Financing

  • If a developer or owner receives public funds, such as:
    • Low-Income Housing Tax Credits (LIHTC)
    • Community Development Block Grants (CDBG)
    • HOME Investment Partnerships funds
    • Local affordable housing trust fund dollars
  • Why: Rent restrictions ensure public money is used to benefit income-qualified tenants.
  • How: A deed-restricted covenant sets rent limits and occupancy requirements.

2. Land Use Approvals or Zoning Incentives (Inclusionary Housing)

  • If a developer gets:
    • Density bonuses
    • Zoning variances or rezoning
    • Permit fast-tracking
  • Why: In exchange for these incentives, the developer agrees to cap rents on a percentage of units.
  • How: Rent restrictions are codified in a land use agreement or recorded covenant.

3. Disposition of Publicly Owned Land

  • If a city or county sells or leases land to a private party:
    • The deal may require the units remain affordable for a defined period (e.g., 30-99 years).
  • Why: To ensure the property continues to serve public housing needs.
  • How: Rent-restrictive covenants are part of the deed or lease terms.

4. Affordable Housing Overlay Zones or Local Ordinances

  • Some cities have zoning overlays or ordinances that:
    • Mandate rent restrictions in designated areas or for certain projects.
  • Why: To maintain long-term affordability and prevent displacement.
  • How: Enforced via covenant and monitored by a housing authority or similar agency.

5. Negotiated Agreements (e.g., Community Benefits Agreements)

  • Developers and local governments may enter into a voluntary agreement in response to community pressure or political negotiations.
  • Why: To gain approval for controversial projects, especially in gentrifying areas.
  • How: Terms are enforceable via covenant and development agreement.

Legal Considerations

  • Rent-restrictive covenants must:
    • Serve a valid public purpose
    • Be clear, enforceable, and recorded to run with the land
    • Typically last 15–99 years, depending on the program
  • They are often monitored by a housing authority or compliance agency to ensure enforcement.