LONGMONT >> Finding a way to provide more housing options for the “missing middle” would be a gift that developers, lenders and elected officials in the Boulder Valley would love to find under their Christmas trees. But for those who gathered Tuesday, June 24, at Fox Hill Club for BizWest’s Boulder Valley Middle-Income Housing Summit, unwrapping that present means rooting through what one called the “Christmas tree ornaments of all obstacles on builders that cost them money and time.”

Still, some solid ideas emerged from the event’s roundtable discussions, including some wishes that have become common rallying points: more-effective legislation to cut through the maze of litigation about construction defects, more-flexible use of metropolitan taxing districts, and simplifying municipal codes to make them more site-specific.

“How can we increase ownership opportunities,” one asked. “When apartments are being built, how can we incentivize converting them into condos to increase the lower-income housing stock?”

Another suggested streamlining the planning process: “Maybe the city only gets two reviews. Maybe the planning staff has two shots at this; after that we’re done.”

Besides focusing on large developments with units numbering in the hundreds, Steve Lane, principal architect at Bas1s Architecture + Design, suggested encouraging “small-scale infill projects of two, five, 10 or 20 units” as “an opportunity for someone who has owned a piece of property to maybe do one project for eight units and make some money and be done.”

For such a small project, Lane suggested, “you shouldn’t have to go through the same vetting process that a 300-unit project goes through. Maybe there’s less construction improvements that are allocated to your project because it’s at that scale.”

After Longmont City Council member Diane Crist noted that “too many regulations are added on without anything being taken away,” another attendee suggested that increases in development fees shouldn’t be more than increases in the Consumer Price Index.

One idea heard in the room that would be sure to lead to some forceful public debate was to “regain use-by-right permitting” by eliminating the right for the public to comment on individual projects at planning commission and city council meetings.

“It would be better to promote public comment during the comprehensive-plan process,” he said, “more open conversation earlier in the process.”

Another notion that could spark some heated response from the public was elimination of requirements for fire-suppressing sprinkler systems in some developments, rules that a participant claimed increase the cost of a project by $6 to $7 per square foot.

Erie mayor Andrew Moore asked, “How do you innovate if the code is so tight that you can only draw by numbers?

“You’ve got to be creative and innovative, and somehow those elected officials that have some say in this need to understand that and do what we need to do to make it more flexible,” Moore said.

One idea Moore advanced was imposing a sales tax dedicated to affordable housing that would provide monetary assistance to lower-income people seeking a place to live that is tied to area median income.

“If you live in Erie and work in Erie, and your AMI is below a certain level,” Moore said, “can we give you a stipend that then allows you to do what you want? Maybe they say ‘I want to rent,’ or ‘Nope, I want to buy.’ This could give the individual more skin in the game.”

The ideas that emerged from the roundtable discussions will be used this fall to launch more targeted conversations at BizWest’s Boulder Valley Real Estate Conference, to be held Nov. 20 at the Limelight Hotel in Boulder.

Those solutions are needed, said former state Rep. Jonathan Singer, founder of Comity Solutions LLC and senior director of policy programs at the Boulder Chamber, who pointed out that a survey conducted by the chamber revealed that middle-income housing is a top-tier priority.

“The price of a three-bedroom home in the city of Boulder is just over $1 million right now,” Singer said. “That downpayment costs more than some homes in other parts of the country.”

He said he has heard some elected officials say that “if you can’t afford to live here, you shouldn’t live here,” but Singer added that “that’s not the community that I think any of us want to have, for so many reasons, but we need to be aware that those sentiments are in existence by people in the public realm.”

Singer credited state legislation that installs a fast-track system to deal with litigation over construction defects as “the crack in the door people have been looking for,” as well as a voter-passed initiative in Boulder County that gives us “a dedicated source of affordable-housing dollars that’s going to yield $20 million a year. Now it’s our job as a community to be good stewards of those dollars.”

Part of the answer is correcting mistakes of the past and not repeating them, Singer said.

“Part of the missing middle is the fact that communities of color were redlined in the past,” he said. “It is our job not to feel guilty about that but to recognize it and make up for those mistakes of the past and level the playing field for everyone. There have been systemic obstacles to getting bank loans and to living in these communities that had nothing to do with someone’s ability to have good credit.”

Singer said the availability of affordable and attainable housing “does increase gross domestic product” because it leads to better health outcomes.

“When people are getting sicker because they can’t afford a stable place to live, or they are moving around a lot,” he said, “it’s essentially costing us all.”

He also noted that the availability of water will be crucial to how much development can occur. “The new growth limit is water,” he said, “and if we aren’t thinking about water conservation and what that means, that’s going to be the new limiting factor.”

Singer hailed the focus of state leaders as well as municipal officials along the Front Range in promoting transit-oriented communities.

“Our workforce doesn’t just deserve an affordable place to live, but they need to get to work,” he said. “The more we can create those transit-oriented corridors and create affordable density around them, the better. So how do we start planning for them now?”

Aaron Spear, market president for Bank of Colorado, echoed Singer’s call for more density as a key tool in serving the middle-income population.

“Our communities want walkable neighborhoods; 15-minute walkable neighborhoods are an extremely attractive thing that I think we should all want to see,” Spear said. “But I think the market needs to deliver that, not the planning board, not the city council and not the staff they’re taking direction from. I think that the walkability of a community is going to start with the people, the residents that are going to be in that physical space. If you’re going to maximize the ability to get the people housed in that space, you need to build more units.”

The political will to achieve some of those goals is there, noted Shannon Cox Baker, regional vice president for the Mountain Division of Pennrose Real Estate, a national affordable-housing development company based in Philadelphia but with local offices around the country.

“We have more funding than we’ve ever had before, and a lot more general public support for the need for housing in our communities,” she said, citing voter-passed Proposition 123 as an example.

Passed by Colorado voters in 2022, Prop 123 aims to increase the availability of affordable housing by dedicating a portion of state income tax revenue to an affordable housing fund. This fund is split between the Colorado Department of Local Affairs and the Office of Economic Development and International Trade. The funds are used for programs including land banking, equity investment and concessionary debt, as well as supporting local governments in their efforts to increase affordable-housing options.

“This is transformative money,” Baker said. “And yet these deals are still really hard to do.”

Longmont city manager Harold Dominguez, who also is serving as that city’s interim housing director, has seen some of that transformative money when the city council designated $1 million a year out of Longmont’s general fund for affordable housing and another $1 million for attainable housing. But he also faced a “fundamental headwind that was limiting what we could do,” he said, “in that Longmont’s code is really suburban-based. The code itself almost starts taking you down a road where it makes it very difficult to build that homeownership opportunity in a community if your standards are designed for larger lots, larger homes, larger setbacks and those types of issues.”

Kurt Firnhaber, director of housing and human services for the city of Boulder, agreed that “it takes real money to create affordable housing. There’s a lot of resources for low-income tax credits and feeding that lower-income rental market, but the resources for middle-income ownership are much harder to come by. Without local funding and local support, you can’t make any of these projects pencil.”

Since setting goals in 2015, his agency has been able to create only 45 middle-income deed-restricted units, Firnhaber said. “They’re the toughest type of housing to develop.”

Still, there are ways to get it done, said developer Mike Cooper, director of entitlements for Louisville-based Boulder Creek Neighborhoods.

He pointed to Peacock Place, a “micro-neighborhood” of 15 homes including six deed-restricted affordable units being built on about 5.5 acres at 5691 South Boulder Road. That project took some creativity, he said, because the owners of the property, the Kent family, are developing the project along with Boulder Creek Neighborhoods but wanted to stay on the property.

“He’s keeping half of it to rebuild his house,” Cooper said.

Peacock Place is being built with “no public subsidies,” he said. “It’s a little bit tight financially to make it work, but we’re confident. We’re bringing the subsidies from our profit.

“In the city of Boulder, we can make that work,” Cooper said. “Market-rate housing can provide the subsidy for the affordable homes, but in the other municipalities, there’s no way we’re doing 40% affordable without a public subsidy.”

Not that he didn’t get some help from the city of Boulder after annexation, he said.

“Rarely is there a project that we’re not getting some level of variances from the city and cooperation on their codes,” Cooper said. “To just go straight zoning is nearly impossible. We’re always looking for cooperation: ‘Let’s get creative on the code,’ or different things to make it work.”

What doesn’t get as much attention, said Marc Painter, partner at law firm Holland & Hart LLP, are what he called the unseen issues.

“There’s not that much visibility, when you’re going through the planning process for a project, into what really makes a project tick and what makes it really hard to pencil out,” he said. “We’ve all had this experience that we are going up with a project and there’s this sense that developers have this huge margin and this bottomless pit of dollars to solve a lot of problems. These problems then become things they have to pay for.

“If they only knew what the lenders are telling us behind the scenes about what we have to do, or if they only knew about what the regulatory parameters are that we have to deal with from the federal government on affordable housing, we could probably all be much more collaborative.”

Not quite as unseen, Spear said, is the “inflation in construction costs that is preventing us from being able to affordably build attainable housing. This is a conversation about tariffs. We are taxing the very thing that we want to see. We are not taxing the things that we don’t. If we are going to meet the needs of the market, we need to make the market able to accomplish the things we need.”

Spear took the conversation back to those Christmas-tree ornaments.

“There have been so many things needed from these developers to accomplish the goals of our community,” he said. “Bikes are an important thing. We want to reduce our greenhouse-gas emissions. Bikes help do that. But if you have to take back square footage to accommodate two bikes per unit, you’ve got to think about what that means to the pro forma.”

Baker agreed. “Sometimes the money is going to projects that have other elements that might be a bit of a distraction from what we envision our primary goal to be,” she said, “which is to build housing.”

One of the roundtable participants summed up the general mood:

“Let’s look at that Christmas tree and see what we can Grinch the crap out of.”

This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2025 BizWest Media LLC.