City Council passes Boulder co-op housing ordinance!
After a year of contentious debate and 4 public hearings, Boulder City Council formalized and voted on a co-op ordinance, 7-2.
The Boulder co-op housing ordinance allows for rental, non-profit and equity co-ops in Boulder and the city is prepared to issue such licenses within 6 months.
So what are we looking at here?
- Up to 10 new co-op licenses per year (with the exception possible for a few more)
- In low density areas, up to 12 people living together and in high density areas, up to 15 people living together
- Co-ops will be required to provide at least 200 square feet per resident
To me, it seemed to be a very polarizing issue. Those who fought hard to legalize their current way of life, on one side. Those fearful of a change in property values, neighborhood culture and becoming the neighbor beside the new co-op, on the other side. And I can see the points of both sides.
The Cons of the Boulder Co-op Housing Ordinance
Some neighbors might be wondering if the house they just paid $600,000+ for, to raise their kids on a street that was well populated with young families, have been dashed. What if the rental house next to you, at 2200 square feet, is becomes home to 11 adults, with the trash, number of vehicles and noise that even 11 well behaved people bring to a residence? Anyone else remember what it was like to live with a bunch of friends while in college? Yeah, of course the fear is real. It’s not that you think they are criminals or party-ers… it’s just that they know you are a BUNCH of people!
And what if you own the house beside the co-op and decided to sell? If you think that the co-op just increased your property value, you’d be mistaken. The truth is that there are probably more people who would avoid buying the house next to the co-op than there are people who would be attracted to the house for sale because it’s beside the co-op. Your buyer pool just went down and I’d guess your sale price did too. Essentially you are subsidizing the cheaper living costs of your co-op neighbors and it’s ok to feel less than positive about that.
The Pros of the Boulder Co-op Housing Ordinance
Oh my, where to start?!
If you are currently over-occupying a residence in Boulder and will qualify for a co-op license, it was your lucky day! And that of your landlords too. Thinking positively, this could be a good thing for your neighbors too. The city is going to be all over a co-op to be sure its not breaking rules and trying their best to protect neighbors from a detrimental change in their lifestyle. With any luck the co-op will be so grateful for this opportunity to prove themselves that they will go out of their way to be great neighbors. And getting neighborly help with manual chores should be easier with a bunch of people next door!
Co-op residents get the lifestyle that they were hoping to continue. That probably includes a sense of community and lower cost of living. However, if they think their rent will stay the same as a normal 2200 SF house and just be split 11 ways, they are CRAZY! Your landlord will put your rent up! Renting a house out in Boulder is rarely an act of charity. Its a business plan. Rent pays for the taxes, insurance, mortgage and maintenance and if there is some left over, it increases the market value of the property as well as lines the pocket of the landlord.
Here is how it could go:
Rent is now $6000/month instead of $3000. Landlord is using extra money to pay for all the extra maintenance and service calls that 11 people generate, versus 4 people. More toilets being stopped up, disposals not working etc. More water being used (at a higher price per gallon) and more trash and recycling bins needed. On move out, the Landlord will more often need to paint, change carpet, refinish floors or replace appliances.
The landlord who decides to sell while there is a co-op in place will appreciate a higher sales price than the same sized, similar condition house next door. Why? As an investment, this place is pretty great! The cap rate is better than a regular rental for sure. Of course, with increased value, comes increased taxes… comes increased rent!
Anyway, I just thought it would be fun to start the day with a little internal debate! Play Devils advocate to myself, if you will. I’m a home owner, landlord, property manager and Realtor. Trust me when I say I am positioned to see it from all angles… the good, the bad and everything in between. It was always going to be a healthy debate with righteous arguments from both sides. My belief is that where you fall on the spectrum of gratitude for the new ordinance, is highly dependent on your personal situation.
The only advice I offer is this: Be a good neighbor and you’ll probably get a good neighbor.