Middle-class house ownership in Boulder

Housing built through the Boulder Affordable Housing Program (courtesy of City of Boulder)

Saturday, April 9, 2022

Boulder is working to create homeowning opportunities for the middle class. How should the city balance spending and priorities? what does it wrong? What is right?

Doug Hamilton: Think outside the box about affordable housing

Home ownership is probably unattainable for most middle-income people in Boulder who do not have considerable wealth. If it is the goal of our city we need new solutions to have an economically diverse middle-income housing population.

The city of Boulder defines middle income as the income of a person or family 80-150% of the middle income area (AMI). This means that a family of four can earn between $ 93,000 and $ 175,000 per year. Even this relatively high income (nationally) will not get you far in Boulder.

Imagine a family of four buying a house for an average housing price of $ 1.5 million. At the current interest rate about 5% and with a 20% down payment, this family would assume a monthly mortgage payment (excluding taxes and insurance) of $ 6,000. A family of four would need to earn about $ 240,000 a year to stay below the guideline 30% of the monthly income is to be spent on housing. With no advance of more than 20%, middle-income buyers were excluded from Boulder.

The rent is not much better, but it is still a bit affordable. The average apartment with an area of ​​800 square feet in Boulder is rented for about $ 2,263 per month with a year-on-year increase in rents of up to 15% in Colorado. A family of four would need to earn $ 90,500 to stay below the 30% rule – and to feel comfortable on an area of ​​800 square feet. Renting family houses is usually much more expensive.

Boulder has no programs to help middle-income tenants. For buyers, Boulder has H2O programwhich allows home buyers to get a down payment loan of $ 100,000. The program was not widely used: according to Eric Swanson, the city’s housing program manager, only 82 housing applicants have used it since 2000.

In 2019, voters approved a measure for a advance payment with middle income assistance program. The program, which is scheduled to be reworked and launched in January 2023, has not been implemented and appears unfeasible to buyers because the program requires them to make their homes permanently affordable, limiting the value they can borrow to repay the loan.

Spatial planning laws, demand, building regulations, green belts and height restrictions – many of which we like – have led to a situation where the “free” market has failed to provide affordable housing solutions.

What we need? We have to look at ourselves as a solution. We should burden ourselves by building and maintaining affordable housing. The city should lobby the state to raise taxes to pay for affordable housing and end the moratorium on communities undergoing rent stabilization. It is our right to have the tools to enable our communities to live in the middle class.

Doug Hamilton is a parent, lawyer, engineer and person who believes in free public spaces and a more participatory society. More about Doug.

Ted Rockwell: Use affordable housing to protect the open space

Focusing on open space as a top priority in this city is commendable and is a model for maintaining undisturbed ground for future generations. The unintended consequences of this preference have made our community inaccessible to low- and middle-income households (and indeed many higher-income households).

The lack of affordable housing is a complicated problem that currently occurs throughout the country. Instead of painting the edges of the problem, the city must prioritize housing on an equal footing with open space to ensure that the two priorities complement each other.

The city of Boulder is considering a program that would subsidize housing loans for middle-income people. These city-backed housing loans would use metrics linked to average house prices and average wages.

The problem with this approach is that house prices far outweigh middle-class wage growth. In 2018, the median price of a family home in Boulder was about $ 920,000. In April 2021, the average price $ 1,557,500. During the same period, wages in Boulder recorded only modest gains, in the range of 7-9%.

How can Boulder subsidize middle-income homeowners when apartment prices have risen 55% in just two years and wages have not kept pace? It is unrealistic to think that a city can afford to bear the difference between what the average worker earns, with running-away real estate values.

I will not pretend that there is a simple or clever answer to this complex problem, but I think we should approach it with at least as much thought as we have devoted to protecting and preserving our beloved open space.

Protecting the crown jewel of Boulder, its open space, is a critical factor that prevents our community from addressing the issue of housing and ultimately prevents us from being a truly sustainable place to live. Protecting and maintaining open space is very important and environmentally intelligent, but without the ability to easily build new housing, our middle-class workforce has had to relocate to remote areas, most of them commuting to the city by car every day. This is not the right strategy for a sustainable community – whether environmentally or otherwise.

Our community’s experience in educating the public about the benefits of open space could also be used for affordable housing. We must realize that the problems of the lack of affordable housing and the protection of open space are interlinked. We need to bring in the intelligence and wisdom we have used to protect our wild landscape to help create the sustainable community we strive to be. Affordable middle-class housing deserves to be treated as a top priority in our community, on the same level as open space, and the biggest minds of our community should work together to find these solutions.

In the 1970s and 1980s, there was a massive campaign to educate people about the importance of open space, which led to the establishment of our Open Space and Mountain Parks department. I would argue that something similar must be done in the case of flats today.

“Protect our open space” was a cry at the end of the 20th century in Boulder. “Affordable open-air housing” must be our cry at the beginning of the 21st century.

Ted Rockwell is a senior communications and marketing specialist specializing in public post-secondary, online and continuing education. More about Ted.

Boulder Beat Opinion Panel members write on their own. Their views do not necessarily reflect the views of Boulder Beat.

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