This ballot issue proposes a $10M pilot program to help middle-income households afford to buy a home in the city. Program participants would have to come up with a down payment of at least 5%. The city’s program would provide a gap loan to reduce the ongoing monthly mortgage payments and to cover any down payment beyond the 5%.
The homeowner would be required to repay the gap loan with interest in one-lump sum payment within 10 years or when the home is sold, whichever comes first. A homeowner refinancing the mortgage at 10 years in order to pay the gap loan would be subject to existing refinancing rates.
The homes in this program would be deed-restricted to a 2% per annum increase in value, even if the real estate market is hotter than that, in order to keep the houses affordable for middle-income households. The deed restriction may be a disincentive for potential home buyers, but could also open up a big fight over who gets to buy the house when it goes “on the market” again later at less-than-market rates. Will a random lottery be held among all the qualifying interested buyers? Will buyers be scrutinized according to “good neighbor” criteria? Meanwhile, no help for the buyers is stipulated when housing values decrease. A homeowner could be left with an underwater mortgage.
The City of Boulder’s goal, adopted in 2008, of 450 permanently affordable middle-income housing units was considered inadequate by the Oct 2016 Middle Income Housing Strategy report which advocates building or preserving 3,500 middle-income homes by 2030. The city has deed-restricted about 110 units as permanently middle-income affordable out of over 46,000 housing units in the city. Currently, annexation is the city’s main path to create permanently affordable middle-income housing.
The permanently affordable middle-income housing program where middle income is defined as 80 to 120 percent of the area median income (AMI) or $80K to $150K, is different from the better known and relatively successful formerly 10%, now 15%, affordable-housing goal for low-to-moderate incomes.
The low-to-moderate-income portion of the city’s population has hovered around 46% for the last 30 years. Rentals and attached housing often appeal to students and individuals, but not to middle-income families who would prefer to own a single-family home in a more affordable city. The middle-income portion of the city’s population has decreased over the last 30 years from 43% to 37% with a corresponding increase in high-income residents.
Keep in mind that over half of Boulder’s residents rent. They disproportionately earn low, moderate and middle incomes. Also close to half of the employees in the city commute in to Boulder.
Boulder residents would see no increase in taxes, but because this ballot issue calls for a multi-year debt obligation, TABOR requires the city to get voter approval.
Recommendation: Yes/For
Boulder is not shy in its attempts at social engineering. The entire 2020 proposed city budget is over $400M and although the city’s water utilities and dedicated funds account for about 60% of that, $10M in debt is not a big risk for the city. The number of households that would be helped is dependent on how big each gap loan is but likely will not surpass 100 households for the first $10M. Because the city will recoup the loans with interest, the recouped money can be used again for future gap loans. Some action is necessary if we want to keep middle-income households in Boulder instead of in-commuting to Boulder.
The biggest concern with this pilot project is that if (or when) the economy deteriorates, the people we are trying to help could be overstretched. Many people in the 2008 housing crisis were persuaded to take out bigger loans than they could really afford. Let’s hope that Boulder continues its good track record of very few defaults when loaning to residents.
Housing has been a hot topic for years in Boulder. In addition to the city’s Housing Authority, in 2018 the city created a Housing Advisory Board. Some Boulder housing topics of the last decade or so include a head tax on employers for each in-commuter, cooperative housing, occupancy limits, height limits, inclusionary housing, Airbnbs, the lack of renter representation on council, the effect of open space on housing availability, regulating McMansions, BVSD possibly providing “company” housing to employees, and whether Boulder should stop wooing big businesses to the city.
Website for the Yes Side
No known website – Info on a supporters’ website appreciated.
Website for the No Side
No known website – Info on an opponents’ website appreciated.
Approved Ballot Language
City of Boulder Ballot Issue 2I
Imposition of a Middle-Income Housing Program
Shall City of Boulder debt be increased by an amount not to exceed $10,000,000, with a maximum repayment cost of not to exceed $15,000,000, without raising taxes, to provide for a housing assistance program that will include permanently affordable deed restrictions and make loans to middle-income households to purchase homes sold in Boulder, such debt to be sold at such time and in such manner and contain such terms, not inconsistent herewith, as the city council may determine and to pay all necessary or incidental costs related thereto by the issuance and payment of notes, bonds, lines of credit or other debt obligations as provided by the city charter, which obligations shall be payable from the general fund and any other legally available funds of the city, all without in any other way affecting the city's other taxes, revenues or expenditures under the constitution and laws of this state?
Yes/For _____
No/Against _____
See Ordinance No. 8344 to put issue 2I to the voters
https://www-static.bouldercolorado.gov/docs/Ordinance_No._8344_Middle_Income_Housing_Assistance_Program-1-201909051638.pdf?_ga=2.1462071.786627453.1570304463-1425851666.1551447775
See the 2017 Boulder Community Profile and the 2016 Middle Income Housing Strategy at https://bouldercolorado.gov/housing-boulder/housing-data-challenges
The homeowner would be required to repay the gap loan with interest in one-lump sum payment within 10 years or when the home is sold, whichever comes first. A homeowner refinancing the mortgage at 10 years in order to pay the gap loan would be subject to existing refinancing rates.
The homes in this program would be deed-restricted to a 2% per annum increase in value, even if the real estate market is hotter than that, in order to keep the houses affordable for middle-income households. The deed restriction may be a disincentive for potential home buyers, but could also open up a big fight over who gets to buy the house when it goes “on the market” again later at less-than-market rates. Will a random lottery be held among all the qualifying interested buyers? Will buyers be scrutinized according to “good neighbor” criteria? Meanwhile, no help for the buyers is stipulated when housing values decrease. A homeowner could be left with an underwater mortgage.
The City of Boulder’s goal, adopted in 2008, of 450 permanently affordable middle-income housing units was considered inadequate by the Oct 2016 Middle Income Housing Strategy report which advocates building or preserving 3,500 middle-income homes by 2030. The city has deed-restricted about 110 units as permanently middle-income affordable out of over 46,000 housing units in the city. Currently, annexation is the city’s main path to create permanently affordable middle-income housing.
The permanently affordable middle-income housing program where middle income is defined as 80 to 120 percent of the area median income (AMI) or $80K to $150K, is different from the better known and relatively successful formerly 10%, now 15%, affordable-housing goal for low-to-moderate incomes.
The low-to-moderate-income portion of the city’s population has hovered around 46% for the last 30 years. Rentals and attached housing often appeal to students and individuals, but not to middle-income families who would prefer to own a single-family home in a more affordable city. The middle-income portion of the city’s population has decreased over the last 30 years from 43% to 37% with a corresponding increase in high-income residents.
Keep in mind that over half of Boulder’s residents rent. They disproportionately earn low, moderate and middle incomes. Also close to half of the employees in the city commute in to Boulder.
Boulder residents would see no increase in taxes, but because this ballot issue calls for a multi-year debt obligation, TABOR requires the city to get voter approval.
Recommendation: Yes/For
Boulder is not shy in its attempts at social engineering. The entire 2020 proposed city budget is over $400M and although the city’s water utilities and dedicated funds account for about 60% of that, $10M in debt is not a big risk for the city. The number of households that would be helped is dependent on how big each gap loan is but likely will not surpass 100 households for the first $10M. Because the city will recoup the loans with interest, the recouped money can be used again for future gap loans. Some action is necessary if we want to keep middle-income households in Boulder instead of in-commuting to Boulder.
The biggest concern with this pilot project is that if (or when) the economy deteriorates, the people we are trying to help could be overstretched. Many people in the 2008 housing crisis were persuaded to take out bigger loans than they could really afford. Let’s hope that Boulder continues its good track record of very few defaults when loaning to residents.
Housing has been a hot topic for years in Boulder. In addition to the city’s Housing Authority, in 2018 the city created a Housing Advisory Board. Some Boulder housing topics of the last decade or so include a head tax on employers for each in-commuter, cooperative housing, occupancy limits, height limits, inclusionary housing, Airbnbs, the lack of renter representation on council, the effect of open space on housing availability, regulating McMansions, BVSD possibly providing “company” housing to employees, and whether Boulder should stop wooing big businesses to the city.
Website for the Yes Side
No known website – Info on a supporters’ website appreciated.
Website for the No Side
No known website – Info on an opponents’ website appreciated.
Approved Ballot Language
City of Boulder Ballot Issue 2I
Imposition of a Middle-Income Housing Program
Shall City of Boulder debt be increased by an amount not to exceed $10,000,000, with a maximum repayment cost of not to exceed $15,000,000, without raising taxes, to provide for a housing assistance program that will include permanently affordable deed restrictions and make loans to middle-income households to purchase homes sold in Boulder, such debt to be sold at such time and in such manner and contain such terms, not inconsistent herewith, as the city council may determine and to pay all necessary or incidental costs related thereto by the issuance and payment of notes, bonds, lines of credit or other debt obligations as provided by the city charter, which obligations shall be payable from the general fund and any other legally available funds of the city, all without in any other way affecting the city's other taxes, revenues or expenditures under the constitution and laws of this state?
Yes/For _____
No/Against _____
See Ordinance No. 8344 to put issue 2I to the voters
https://www-static.bouldercolorado.gov/docs/Ordinance_No._8344_Middle_Income_Housing_Assistance_Program-1-201909051638.pdf?_ga=2.1462071.786627453.1570304463-1425851666.1551447775
See the 2017 Boulder Community Profile and the 2016 Middle Income Housing Strategy at https://bouldercolorado.gov/housing-boulder/housing-data-challenges
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