Qualifying Strategies
This project is funded in part by funding from the Colorado Department of Local Affairs HB21-1271 Innovative Housing Strategies Planning Grant Program.
The Planning Grant Program provides grants to local governments (municipalities, counties, city/counties) to help them better understand their housing needs and adopt policy and regulatory strategies in order to promote the development of affordable housing and qualify for the Incentives Grant Program. As a part of this project, the consultant team will refine the strategy list below through ongoing input from the community, additional stakeholders, and the Board of Trustees. The team will identify the most appropriate strategies to move forward with for implementation consideration.
The list provided below is not exhaustive. This project may identify additional strategies for consideration. As more information is developed for this aspect of the overall project, updates regarding the direction of strategy development will be provided below.
Description: Local jurisdictions can identify vacant publicly-owned property located within their municipality to direct the development of affordable housing development. This process acts as a subsidy and effectively creates a public private partnership where the municipality can work together with an affordable housing developer to support an increase in affordable units within the community.
Description: As appropriate, local jurisdictions may identify zoning districts or lot sizes within which to allow for small square footage residential unit sizes. This strategy would likely support homes that fit in the micro- or tiny-homes. These homes typically have a size range between 150 – 800 square feet.
Description: Most jurisdictions require a minimum number of off-street parking spaces for new residential development. The minimum number of required spaces is usually determined by the number of bedrooms or per unit. Parking requirements are in place to ensure residents have dedicated spaces to park their vehicles, as well as to ensure that neighborhoods don’t become adversely affected by increased demand for public parking. However, in some cases, parking requirements can result in an oversupply of parking provided and ineffective use of land, which accentuates the expensive cost of parking, typically costing between $5,000 (surface) to $40,000 (underground garage) per space.
Additional information available here.
From DOLA’s Innovative Affordable Housing Development Incentives Grant Program Guidelines list of qualifying strategies:
- The creation of a program to subsidize or otherwise reduce local development review or fees, including but not limited to building permit fees, planning waivers, and water and sewer tap fees, for affordable housing development.
- The creation of an expedited development review process for affordable housing aimed at households the annual income of which is at or below one hundred twenty percent of the area median income of households of that size in the county in which the housing is located.
- The creation of an expedited development review process for acquiring or repurposing underutilized commercial property that can be rezoned to include affordable housing units, including the preservation of existing affordable housing units.
Description: Local jurisdictions can charge developers a range of fees to offset the cost of development review and approval and help pay for expanding infrastructure and other public services related to the new development. Development review and permitting processes are in place to ensure compliance with local land use and zoning laws, building codes, and public health and safety standards. Reducing or waiving development fees and impact fees, as well as expediting the permitting and approval processes, can help incentivize the development of affordable housing or other high-priority community projects.
Additional information available here.
Description: Density bonuses allow for more housing units to be built on a specific site than would otherwise be allowed under standard zoning district regulations in exchange for the inclusion of income restricted units or other agreed-upon public goals. The bonus can take the form of an increase in floor area ratio (FAR), greater building height/additional stories, smaller unit sizes, different unit types (e.g., fourplexes on single family detached lots), or flexible setback requirements. In essence, for every affordable unit a developer includes, they are able to add a specified amount of market-rate units. The amount of density bonus offered varies by program, market, and unit location—for example, larger bonuses are typically allowed along transportation corridors, particularly transit-accessible routes.
Additional information available here.
Description: Paying for infrastructure to support housing growth is a large barrier to affordable housing in many Colorado communities. Establishing a dedicated source of revenue for infrastructure to support affordable housing development not only incentivizes such development but can also help jurisdictions adequately monitor and maintain publicly owned water, sanitary sewer, storm sewers and roadway systems to support housing growth. Infrastructure can be funded through a variety of mechanisms, depending on the type of revenue collection allowed and political feasibility.
Colorado communities that have dedicated funding sources for affordable housing development and related costs such as infrastructure typically draw on:
- Commercial and residential development linkage fees
- Optional fees-in-lieu from inclusionary housing programs
- Excise taxes on luxury homes
- Vacation home/short term rental fees
- Taxes on marijuana and similar goods (“sin” taxes)
- Real estate transfer tax (in communities in which they have been grandfathered)
- Dedicated mill levies in property taxes
- Document recording fee
- Demolition taxes (where teardowns are common)
- State and federal sources (e.g., Community Development Block Grant).
Additional information available here.
Description: Allowing duplexes, triplexes, or other appropriate multi-family options as a use by right would help diversify the housing options available to homeowners and renters, as well as provide more naturally affordable housing options.
Additional information available here.
Description: Accessory dwelling units (ADUs) are smaller, secondary dwelling units that are independent from the primary home but located on the same lot. ADUs can be detached, attached, or internal to the primary dwelling. For renters, ADUs often represent lower-cost options in neighborhoods that might otherwise be unaffordable. For owners of the primary unit, ADUs can help supplement income and service mortgage debt. For jurisdictions, ADUs represent a low-cost way to produce units, increase the diversity of housing in the community, and increase density without needing to expand infrastructure systems (e.g., water, sewer, sidewalks).
Additional information available here.
Description: Charges to connect utilities and ongoing costs of providing utilities can be costly to residential developers, especially in communities where water is limited. Strategies to reduce the cost of utilities connections and servicing can facilitate creation of and reduce the operating costs of affordable housing.
Communities may waive or reduce tap fees for affordable units. Sub-metering enables utility companies to charge customers based solely on water consumption of their particular unit through “smart” meters. These smart meters, which can report data daily or even hourly, can also help identify leaks. While there are upfront costs to developers for installing sub-meters in their developments, the literature suggests that the investment will pay for itself in the long term.
Additional information available here.
Description: PUD ordinances allow developers to bypass existing zoning requirements in exchange for satisfying negotiated development criteria. Benefits of PUDs can include more holistic development; greater diversity of mixed-use buildings and housing types; lower infrastructure costs; planned open space and community facilities; streetscape improvements; and other community enhancements. Jurisdictions can require that PUDs include affordable housing or incentivize inclusion through density bonuses, fee waivers, and infrastructure support.
Additional information available here.
Description: Inclusionary zoning (IZ) policies provide for the development of dedicated affordable housing units for low- and moderate-income households in market rate housing. IZ programs generally stipulate that developers must either rent or sell a certain proportion of the units to households at specified AMIs. Some IZ programs help offset the cost of supplying affordable units by providing incentives (i.e., density bonuses, fee waivers, reduced parking requirements). The effectiveness of inclusionary housing policies depends on development volume, housing market conditions, and key aspects of program design.
Additional information available here.
