Boulder’s City Council on Thursday night unanimously approved an annexation of about 4.9 acres of land into the city for a new housing development planned for 28th Street and Jay Road.

The development is expected to have 40% of its units reserved as permanently affordable housing and the rest offered for sale at market rate. Permanently affordable homes are deed-restricted homes intended to be affordable to people making no more than 120% of the area median income, a figure that’s set annually by the U.S. Housing and Urban Development Department. For one person, the 2024 area median income in Boulder is $102,200, and 120 percent of the area median income is $122,650, according to a table on the Colorado Department of Local Affairs website.

Notably, the new annexation requires that 40% of the units on the property be affordable units (as set by the federal income guidelines) and does not allow the developer to pay a cash-in-lieu fee instead of providing the affordable units on-site. Boulder’s Inclusionary Housing policy requires developers to offer at least 25% of the housing units in any new development as permanently affordable housing or else pay cash into the city’s affordable housing fund.

Kurt Firnhaber, director of Boulder Housing and Human Services, told council members on Thursday night that annexations are “one of our best tools” for creating more affordable housing in the city.

“It’s very common for us to not allow cash-in-lieu within annexations, and the reason for that is that then it forces a particular outcome that we’re looking for,” he said.

The housing project has been in the works for nearly three years, and there was at least one previous attempt to build housing on the property. The property just east of the current city limits, currently has a church building and a parking lot, and it’s already connected to city water.

There are several residential neighborhoods in the surrounding area. The north and east borders of the property also touch the Area III Planning Reserve, which the city is studying for possible residential development in the future.

In January 2023, the City Council had a public hearing for a proposal to build 84 housing units at the site, which would yield 34 permanently affordable units. The proposal was to create a mix of townhouses, duplexes and triplexes on the property.

At the time, council members supported the project, in part because it would supply “missing middle” housing, which includes duplexes, triplexes and other housing types that can provide a greater variety of options and price points for homeowners.

However, nearby residents expressed some concerns about aspects of the project, including traffic impacts, the density of the housing, the affordability of the units and the prairie dogs that live on the site.

The final project might or might not yield 84 new homes. The developer for the project wanted to move forward with having the property annexed and setting the terms for that agreement before beginning site review for a specific design, according to a city memo.

The density of the development could also change slightly, depending on the final design. Currently, the maximum size for each market rate unit is 2,500 square feet. But if the project ends up having 78 or fewer units in total, the maximum size for market-rate units goes up to 3,000 square feet.

On Thursday night, the council still overwhelmingly supported the project and spoke positively about it.

“This project has a lot of promise. It’s been a long time coming, so thank you for sticking with it,” said Councilmember Matthew Benjamin on Thursday.

Added Councilmember Lauren Folkerts, “I think this is going to be a great addition. Previously, on (the) council, we have really struggled with how we bring forward middle-income housing. … I really appreciate the contribution that this will make to that program for our community.”