Friday, August 22, 2014

How Tight Can You Squeeze? [Development]

by Osman Parvez

Earlier this week, Boulder City Council enacted a moratorium on building permits for multi-family housing on University Hill.  Did you catch it?    The (cough) emergency moratorium runs through March 18, 2015. 

Sound familiar?  

Long term blog readers may recall this was the very same tactic Council used in their opening salvo against view blocking large houses in Newlands.  It eventually led to the Compatible Development Ordinance - rules limiting house sizes and certain architectural design elements such as so called "looming walls."   

In economic circles, this is called squeezing the balloon.   CU plans to expand enrollment in coming years but not to build much new student housing.   Meanwhile, demand to live in Boulder from non-students has also never been higher driving housing availability to new record lows.  Investors have responded by building (Landmark Lofts, The Lux, Violet Crossing, The Residences on 29th Street, and Solana for example).   When council shuts down new development, it further restricts supply which will drive prices even higher.    Good news for landlords, bad news for anybody who pays rent in Boulder. 

Here's an excerpt from the City's FAQ

Why did the City Council take this action?
The market for student housing is strong. It’s very profitable for developers to create new student housing, and applications continue to be submitted. But the University Hill business district is an “activity center” in  the Boulder Valley Comprehensive Plan (BVCP) that is planned to have a mix of uses including business,  retail, and non-student residential. The moratorium allows time for the city to take a comprehensive look at its revitalization strategy to determine the appropriate mix of uses, the appropriate corridors for new development, and the impacts of converting existing structures into new student-oriented residential units. A moratorium provides the breathing room for an assessment and to come back to council with a more comprehensive revitalization approach.

Was this targeted towards one redevelopment project? 

No, it was in response to a current trend. It was important to enact the moratorium now to ensure the city can assess long-term revitalization and stability in the University Hill business district rather than approve projects that may have short-term financial gains at the expense of the long-term community development goals.

My read between the lines:    Planners were worried that the ramshackle old CU bookstore was going to turn into yet more high end student housing, so they shut it down before anything further got permitted.   Expect new rules before the moratorium expires in the Spring.   Landlords, enjoy the higher rent.   Sorry CU bookstore investors and developers, you're screwed you've been Boulderized. 

Additional Reading

The City's FAQ and Doublespeak  

DC: Concerned About Too Much Student Housing...

DC:  No Residential Building on the Hill

DC:  Putting Development on Pause


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