On January 3rd, Boulder City Council will be considering a new cooperative housing ordinance (RSVP on FB here!). It may be the last time substantial edits are made to the draft. The three biggest issues under consideration at this point seem to be occupancy caps, requiring a minimum square footage per person, and linking the occupancy cap to lot size.
We’re asking for:
- An occupancy cap of 12 in the low density zones, and 15 in the medium and high density zones.
- A minimum square footage of no more than 200sf/person in all zones.
- No lot size restrictions.
For co-ops to be functional and affordable, they need access to a significant portion of the overall housing market. In order to find a home that works for the co-op, in a location that works, with a willing landlord or seller, and not get gouged by said landlord or seller, you need to have options. Many combinations of the regulations being discussed would not provide those options.
The analysis of city and county property data below shows how several individual regulations that each might seem reasonable on their own can end up functionally outlawing the thing they regulate. This is what happened 20 years ago with the original co-op ordinance. It’s also why Boulder’s has so few accessory dwelling units (the curious/neurotic reader can find these glorious regulations in BRC 9-6-3(a) and (b)). More recently, Seattle has effectively regulated micro-housing out of existence with similar set of overlapping restrictions.
Maybe these unworkable regulations are just the result of an overabundance of caution, and a misunderstanding of the consequences of several rules working in tandem. Or maybe this is an insidious strategy allowing opponents stop something without having to openly oppose it. That might be especially useful when the thing you want to stop enjoys widespread public support, like affordable housing. There are plenty of examples of regulations that are simple and workable on purpose. See for example Portland’s Residential Infill Project, or this comparison of ADU regulations across Cascadia.
More directly related, Minneapolis recently passed a law legalizing intentional communities that is far, far simpler than the law we’re considering in Boulder. A few references:
- The Minneapolis ordinance as passed (mostly land use table changes…)
- City Staff presentation on the ordinance and intentional communities (PDF)
- A 2-page summary (PDF) of the ordinance from a public outreach event.
- Star Tribune coverage of its passage on Dec 9th.
- Full video of the final public hearing & discussion.
- A MinnPost story from this summer when the ordinance was getting started.
- A Star Tribune story about a community being forced to disband by the city in 2015.
Home Size & Rental Co-ops
The current proposal is that rental co-ops must occupy homes larger than 2000sf. There are about 4000 single family homes with rental licenses in Boulder, and about 1100 of them (~28%) are larger than 2000sf.
You can see in the distribution below that rental homes tend to be smaller than Boulder homes overall, and that only a small fraction (~20%) of all homes are available for rent.
Given that there’s going to be a maximum of 10 rental co-op licenses issued each year, it would take many decades before they occupied a significant fraction of these homes — even if everyone wanted to live in a co-op, and all of the lasted forever, neither of which is true.
Will the legalization of co-ops bring a bunch of larger houses into the rental market? Much thought we’d like to see that, we don’t think it’s likely. In order to prevent landlords from exploiting rental co-ops, the current draft ordinance gives the license to the co-op, not the property owner. That means the co-op can walk away if the rent gets too high, leaving the landlord with nothing of special value. In addition, there aren’t going to be many co-op licenses in circulation (no more than 10 per year). This limited and unstable market does not seem likely to induce much change in which properties are available for rent.
Adding in Lot Size
Landmarks Board member Deborah Yin has suggested that we might want to tie occupancy caps to lot size. Her (very low occupancy) proposal was modified by Mary Young in an email to the Council hotline, and several Council members seemed amenable to some version of it at the December 6th meeting. In combination with the other regulations being considered, lot size requirements can impose much stricter occupancy limits than the stated caps would indicate.
One proposal floated on Dec. 6th was that a co-op on a “standard” 7000sf lot be allowed to have a maximum of 8 members, with each additional member up to the hard cap requiring an additional 1000sf of lot area. Similarly, the allowed occupancy would be reduced by one member for each 1000sf less than the standard 7000sf lot. This would mean that a 12 person co-op would need an 11,000sf lot. Looking at the distribution of lot sizes below we can see that — especially for rental properties — those huge lots are very, very rare.
- Only 14% of all single family home properties have 11,000sf lots.
- Only about 300 rental homes have 11,000sf lots.
Now, it could be that large homes tend to be built on large lots. If that was the case, the lot size restriction might not exclude many additional properties, since we’re already requiring co-ops to live in large homes. However, it turns out that there’s only a very weak correlation (R-squared = 0.148) between home size and lot size in Boulder. This means that requiring lots to scale with the number of occupants acts as a nearly independent constraint on the number of properties that are available to co-ops.
Bringing all of the above together in two spectacular dimensions (Thanks to Matplotlib!):
Square footage per person
Some folks have been concerned at the thought of 12 people living in a 2000sf home. This is not about “overcrowding” from a health and safety point of view. The International Property Maintenance Code will still apply to co-ops, and imposes an occupancy limit that everyone in Boulder (including families) has to abide by allows substantially higher occupancy rates. It works out to a minimum of ~70sf per person for a 12 person household).
- With a requirement of 200sf/person, there are about 600 rental properties that could host 12 person co-ops.
- At 250sf/person, that number drops to about 200. This is without any kind of lot size limitations.
Bringing it all together
Above I’ve looked at each regulation in isolation, but what’s more important is how they interact? These next plots bring together all of the above restrictions in four different policy scenarios, for both rental and equity cooperatives:
- 200sf/person vs. 250sf/person
- No lot size restrictions vs. a base occupancy of 8 on a 7000sf lot, adjusted up or down by one person per 1000sf of lot.
- Additionally, rental cooperatives are assumed to have a minimum home size requirement of 2000sf.
- In the most liberal case above (200sf/person and no lot restrictions) about a third of all the single family homes in Boulder could potentially house a 12 person equity co-op. That’s meaningful market access.
- In the most restrictive case (250sf/person with lot limits), only about 6% of homes in Boulder could work for a 12 person equity co-op. That’s not meaningful market access.
- The co-op will still have to find a willing seller at a price they can afford.
- The house will still need to have lots of bedrooms.
- The house will need to be in a neighborhood where the co-op wants to live.
- The co-op will need to be at least 500′ from any existing co-op.
- The house will need to have parking that works for the community without more than 3 cars being stored on-street…
The lot & home size restrictions I’m exploring in this post aren’t the only ones we’re working with!
Because rental homes tend to be smaller, and because there are so many fewer of them, the universe of options for larger rental co-ops is extremely limited:
- In the most liberal case, only about 3% of homes in Boulder could house a 12 person rental co-op.
- If we require 250sf instead of 200sf per person, and that drops to about 1% of all homes.
- Add in the lot size requirements, and larger rental co-ops are essentially outlawed.
In the most conservative case, there were only 66 properties that met both the lot and house size requirements.
It’s also important to note that the market based affordability mechanism the ordinance creates for rental co-ops — an oligopsony of many potential landlords, but few potential co-op renters, giving pricing power to the co-ops — only works if co-ops are empowered to walk away from an abusive, price gouging landlord, and seek another home. If there are only a few dozen potential properties they could rent… that will not work.
Completely independent of impacts on the existing cooperatives, it’s clear that if we actually want to enable 10 or 12 person co-ops — if we want them to have meaningful options within the housing market as it actually exists — then we need to be pushing for the more liberal end of the policy spectrum as well: 200sf/person and no lot size restrictions.
High density living in high density zones!
I haven’t really talked about how things break down between the low, medium, and high density zones. Some folks have said that while they don’t object to people sharing a home, they think it should only happen in the higher density parts of town.
Big homes and big lots are rare in the medium and high density zones. Most of them were subdivided into smaller lots and/or dupelxes, triplexes, and fourplexes long ago. The remaining single family homes in higher density zones tend to be small homes on small lots, inappropriate for larger housing co-ops.
To illustrate, here’s a two-dimensional view of home and lot size, colored by zone:
So, while there might be a couple of special cases, suggesting that co-ops need to be in the medium and high density zones is a bit like suggesting co-ops need to be… on the moon. The kinds of houses we need are overwhelmingly located in the city’s RL zones.
Will investors rush out to build giant new rental co-op houses in the medium and high density zones? Again, because the licenses run with the co-op group, and not the property, and because there are going to be so few of them each year, that would an extremely risky investment.
Over the long run, for non-profit owned permanently affordable cooperatives, or very ambitious private equity cooperatives, we might be able to imagine doing some co-op specific new construction in the medium and high density zones, so if Council and the community are amenable to more liberal occupancy caps in those areas, great!
For the foreseeable future, if we have housing co-ops, they’re going to be where the big houses are, and that’s in the lower density parts of the city.
ENOUGH WITH THE DATA! LET’S DO THIS THING!
Join us January 3rd at City Council and tell them:
- NO NEW COMPLICATIONS.
- NO lot size limitations.
- 200sf per person.
- Occupancy caps of 12 in low density and 15 in medium and high density zones.