Zoning for the Middle 

Trying to fill the middle-income gap in Boulder’s housing crisis

Text and photos by Matt Maenpaa

There’s a certain nostalgia for times when a one-income family could afford a nice house without breaking six figures. Rising costs, inflation and a period of economic uncertainty make it a challenge for everyone, particularly in a city like Boulder. Restricted by its footprint and boxed in by neighbors on all sides, the city has struggled with growth for years. 

Luxury properties abound, and a focus on affordable housing has the top and bottom covered, but it’s almost impossible to find attainable housing for the middle class within city limits. Most new properties are built with rental in mind or have costs that make them only reach the upper class. A 2024 study estimated a shortage of more than 10,000 homes in Boulder, which, when combined with affordability issues, sends people to surrounding areas when looking for a place to live. 

The problem hasn’t gone unnoticed, though, and tackling the gap in middle-income housing has been a priority of Boulder’s City Council for its two-year agenda. What those solutions actually look like is complicated and uncertain, however, as the city council, developers and other stakeholders examine costs, resource availability and long-term impact.

Boulder’s middle-income assistance program, introduced a few years ago, helps provide a zero-interest second mortgage for individuals and families with incomes between $122,640 and $231,360 a year. The state has also introduced a middle-income tax credit. It has expanded some affordable housing funding to include individuals and families making up to $170,000 a year, with mandates for deed-restricted affordability, much like those in the lower-income strata.

“The conditions are improving to a point where cities like Boulder can leverage local money as a force multiplier in creating desperately needed middle-income housing and that missing middle,” says Boulder city council member Matt Benjamin.

Subsidies can help affordability, but further struggles come into view when looking at both existing inventory and increasing supply. The city has been making zoning changes that will hopefully ameliorate some issues, like February’s Family-Friendly Vibrant Neighborhoods ordinance that allows for added density in some areas within Boulder. 

The new zoning allows for the creation of duplexes or quadplexes converted out of existing properties, a particular benefit to houses already built with multi-level floor plans, Benjamin says. To combat the frequency with which existing housing inventory is torn down and rebuilt as a luxury home—often affordable but needing restoration, the city council is also looking at a fee of $15 per square foot of added space. 

The teardown fees would contribute directly to the city’s Affordable Housing Fund, but unless some exceptions are made, it could negatively impact the proposed duplex inventory. An impact study suggests the fee could generate an additional $1.2 million in funding, a drop in the bucket when houses cost more than a half million to build. Additionally, the same fees could increase the cost of converting a property into a duplex or quadplex, discouraging the property owners from making the change. The city council is aware of the conflicts, Benjamin says, and wants to find an optimal solution before they make any decisions.

Another option, similar to actions taken by Boulder County and the neighboring L-Towns, is for Boulder to purchase existing units and convert them to deed-restricted, middle-income housing. The inventory for that is limited, though, and the prospect has been met with apprehension by other council members, like Mark Wallach.

Wallach was one of three Boulder council members to oppose the February zoning changes, expressing concerns that the changes won’t be cost-effective in the current climate. As an ex-developer, Wallach sees the issue as one of affordability on the development side. With costs for materials, labor and fees, a new duplex unit could cost nearly $1 million, and a rebuilt property would end up near the same price. With few ways to subsidize the costs, the challenges grow, and Wallach feels that adding density isn’t necessarily a precursor to growth.

Another option the city council has considered is a vacancy tax, imposing hefty fees on property owners who don’t live in the homes year-round. Wallach sees these as ineffectual and too easy to cheat while remaining difficult to enforce with existing resources, expressing concern that long-term applications haven’t been considered. “I get the instinct, you want to fix the problem,” Wallach says. “That’s a good thing, but how’s it going to work?”

Neighboring cities with more room to grow, like Longmont, are capitalizing on it with expansions to both rental and for-sale properties targeting the middle-income gap. The Ascent at Hover Crossing is a partnership between the Longmont Housing Authority and Pennrose, a development company. The 75-unit community in northern Longmont is geared toward families at or below the area median income and would include an on-site childcare center.

Longmont recently broke ground on True North, a sustainable real estate development with that middle gap in mind. The project targets affordability for people with incomes at or below 120 percent of the area median income. It includes education services and financial counseling for applicants so they can successfully build equity as homeowners.

“We know that this middle tier (of housing) is crucial for us right now and for the whole state and county,” says Longmont city council member Shiquita Yarbrough. “Can we do more? Absolutely. But we’re constantly looking for ways to increase workforce housing and, in general, be more affordable, and I’m proud of the city of Longmont.”

At the county level, options are limited unless the county government collaborates directly with local municipalities. Regarding land use especially, Boulder County only has jurisdiction in unincorporated areas. Effective January 17, 2025, the county issued an initial 6-month moratorium on residential building while it reassessed land use codes with an eye towards sustainability, affordability and size of the development. Supporting this is a voter-approved tax collected by the county, with an estimated $9.7 million aimed at affordable housing and another $5 million for housing support services.

“We know this isn’t enough money to solve the housing crisis, but we’re committed to working with partners in Boulder County to make sure this voter-approved money has the biggest impact,” says county commissioner Marta Loachamin. “This is only one piece of a really complicated issue in housing for the entire county.”

At an April town hall in Lafayette, county commissioners Claire Levy and Ashley Stolzmann fielded questions about lower and middle-income housing, highlighting more struggles with affordability in development. In response to a question from a Louisville resident, Stolzmann highlighted the cost disparities that come with affordable housing: single-unit costs greater than $500,000 to build, and rent has to be subsidized well below market, making it difficult to recoup expenses and build new projects.

Complicating things further, Stolzmann says, is the uncertainty in the bond market and decisions at the federal level. Changes in interest rates, inflation and a fluctuating bond market result in thousands of units that may never be built, she explains. Additional proposed taxes on municipal bonds will further harm infrastructure projects across the country, something beyond the control of local governance.

Though there seem to be no immediate solutions to this long-running problem of the middle gap, local officials throughout Boulder and the surrounding environs keep looking for creative and innovative solutions. Concerned residents are encouraged to attend council meetings and town halls and contact state representatives, both to make their voices heard and to keep elected
officials accountable.