The Boulder City Council is weighing an impact fee to certain housing projects.

Either teardowns of older homes and replacement constructions of larger ones, or significant additions to existing homes, could be subject to the hypothetical fee, which was discussed at the council’s Thursday virtual meeting.

Someone who builds a house on a vacant property is required to pay toward Boulder’s affordable housing fund. The projects that the housing nexus study looked at are not. The nexus study defines significant additions as an above-grade project that adds more than 500 square feet to a home and a recorded construction cost of more than $250,000.

For the purpose of the study, Gruen Gruen and Associates looked at an impact fee around $15 per square foot. Sixty-nine permits that were either vacant lot developments, demolitions and replacements or significant additions were issued in 2024. Only the vacant lot developments were subject to Inclusionary Housing.

The study estimates that a $15 fee would rake in an annual $1.2 million to the affordable housing fund.“We’re not trying to encourage a certain type of behavior,” Sloane Walbert, a housing planner with the city, told the council.

“That is really tied to the legality of an impact fee … To avoid a takings clause, you have to show that direct linkage between what you’re asking from a developer and the actual impact on affordable housing … The intent can’t be to encourage a certain type of behavior.”

Gruen Gruen and Associates conducted the study and was paid $55,000 for 22 weeks of work from Oct. 1, 2024, to June 30, 2025, according to a city spokesperson.

Councilmembers were open to a progressive fee based on the size of the projects. Mayor Pro Tem Lauren Folkerts and councilmember Taishya Adams indicated that they’d like to excuse accessory dwelling units from the fee.

The idea of another fee added to the construction process frustrates some, though.

Brady Burke, managing director of Burke Builders, told the Daily Camera that Boulder is bleak for speculative development, which would be impacted by these fees.

“The current building environment has seen many challenges, including expensive land costs, increasing inventory of new homes, and skyrocketing construction and debt costs,” Burke wrote in an email to the Camera. “These boundaries have been present for quite some time and have significantly limited speculative buildings compared to other municipalities.”

Burke and Mark Young, who is with 334 Arapahoe LLC, both said that more fees will put a tighter hold on the process.

“We have many projects currently on hold due to cost constraints, and this will further exacerbate our problem,” Burke wrote.

Mark McIntyre, chair of city of Boulder Planning Board, wrote a letter to the council asking for more complexity to the issue. He led off letter the stressing that he was writing on behalf of himself, not the board.

In terms of expansions, he urged the council to adopt a fee that progresses as the square footage of a project increases. That’s a policy that other councilmembers indicated they’d support.

He also recommended that the first 500 square feet be exempted from any fees as to not discourage modest improvements to homes.

The process is still in its initial engagement phase. Proposed policy alternatives and analysis will be shared with the Housing Advisory Board and Affordable Housing Technical Review Group in the coming months — slated for June and July, per the nexus study. By late summer and fall, the code development process will begin.