Inclusionary Housing Off-site Requirements and Timelines

Depending on the details of the development that generated the affordable housing requirement, off-site affordable units may be provided as for-sale or rental housing. These variations may have implications for the process and requirements of IH. If the off-site development is not subject to Site Review or Form Based Code Review, an Affordable Housing Design Review is required.

The table below includes the steps to provide newly constructed affordable units off-site. The development generating the IH requirement is referred to as the Sending Site and the location where the off-site units will be provided is referred to as the Receiving Site.

The process outlined in this webpage is based on the Sending Site being ahead of the Receiving Site in the development process. If the Receiving Site review process is ahead of the Sending Site, Receiving Site approvals may be held up pending Sending Site approvals and execution of required documents. The table below indicates the sequence of steps needed to satisfy IH with off-site affordable units.

For questions about this process please contact a housing planner at: inclusionaryhousing@bouldercolorado.gov.

Process and Timeline for Constructing Affordable Units Off-site:

1. SENDING SITE – Subject to Planning Land Use Review

Applicants with residential developments subject to Site Review, Use Review, Form Based Code Review, or other planning land use approval process start the review process with the Planning Division (“planning”).

2. SENDING SITE – Inclusionary Housing Discussions

Applicants in a planning land use review process will receive preliminary comments concerning the IH requirement through that process. Applicants proposing a by-right residential development not subject to a land use process should contact a housing planner as soon as possible prior to building permit submittal. In either case, the applicant and a housing planner should discuss the options available to satisfy the IH requirement.

Once the Applicant determines to provide the affordable units off-site several meetings with staff will be arranged to ensure clear understanding of the requirements and timelines.

3. SENDING SITE – Inclusionary Housing Requirement

Based on the data provided in the “Unit Data Spreadsheet” that is required as part of the review submittal and the site and floor plans the housing planner will determine the inclusionary requirement.

The IH requirement is based on a proportional determination of unit type, number of bedrooms and unit size to what is provided in the market rate units on the sending site. For example, a sending site with half single-family homes and half stacked flats will be required to provide half of the affordable units as single family or townhomes and half as stacked flats. Similarly, if the sending site units are half one bedroom and half two bedroom the affordable units should reflect that mix. The number of required bathrooms is based on the number of bedrooms per the following:

• 0 bedroom - equivalent number of baths in the sending units up to 1
• 1 bedroom – equivalent number of baths in the sending units up to 1.5
• 2 bedroom - equivalent number of baths in the sending units up to 2
• 3 bedroom - equivalent number of baths in the sending units up to 2.5
• 4 bedroom - equivalent number of baths in the sending units up to 2.5

The sizes of the affordable units are based on the table on the following page, which can be found in the IH Administrative Regulations:

Note that the receiving site has an IH requirement and those affordable unit sizes should be equal to the sizes of the off-site affordable units.

For-sale developments must provide for-sale affordable units with the following prices: The initial sales price for single family homes and townhomes will be affordable to a household earning 120% AMI. The initial sales price for all other types of housing will be affordable to a household earning100% AMI.

Rental developments may provide either for-sale or rental affordable units. 80% of the rents will be affordable to a household earning no more than sixty percent (60%). Twenty percent of the rents will be affordable to a household earning no more than fifty percent (50%) of the area median income. Rents are adjusted annually. Details about managing affordable rental units may be found in the Rental Compliance Manual.

Often a receiving site can produce more units than required. If additional affordable units are provided, city financial assistance may be requested.

Affordable prices are adjusted quarterly; rents are set annually. Initial prices and rents are established by the city at the time of issuance for the first residential permit.

4. RECEIVING SITE – Off-site Location Approval

Off-site proposals for newly-construction affordable units must first have the proposed off-site location approved by submitting a pre-application request for information. Approval of a potential receiving site location is the first step towards approval of a proposed off-site development; however, it does not ensure the off-site development will be approved. The off-site location request will be reviewed to determine the degree to which it meets the following criteria:

• Consistent with Boulder Valley Comprehensive Plan policies for affordable housing, including 7.13 (Integration of Permanently Affordable Housing) to disperse and integrate affordable housing throughout the community;
• Annexed and zoned for residential use;
• Consistent with the land use map and the service area map;
• Consistent with any applicable adopted area plans;
• Able to support multi-modal mobility (walking, biking, and other alternatives to the single-occupant vehicle); and
• Compatible with adjacent uses.

Applicant submits a Pre-Application Review form to the Planning Division, which includes a letter detailing specifically how the proposed location (the Receiving Site) will meet the above criteria. In addition, the Pre-Application process may also be used to request verification of the maximum residential unit density and to answer other questions the applicant may have about the proposed site. Additional details about the off-site location approval process may be found in the “Off-site Location Review Process” document on the city web site.

5. SENDING SITE – Land Use Review Approval

Once the Sending Site receives a land use approval, the IH requirement is finalized and may be used to develop the Receiving Site proposal.

It is assumed that the Sending Site will get approvals and start development before the Receiving Site. If the Receiving Site process gets ahead of the Sending Site, Receiving Site approvals may be held up pending Sending Site approvals and execution of required documents.

Sending Site developments subject to technical document review should start that process with the Planning Division. Steps 6-9 below may be completed concurrent to the technical review process.

6. RECEIVING SITE – Land Use Review Approval

Receiving Site developments are subject to review as follows:

• Site Review – Any affordable housing project subject to site review, use review, or other land use review must complete that process.
• Off-site Affordable Housing Design Review – Off-site developments in excess of five units providing affordable units and not subject to site, use or other land use review shall be subject to an Affordable Housing Design Review.

7. RECEIVING SITE – Inclusionary Housing Requirements

The Receiving Site will be assessed an IH requirement in the same manner as the Sending Site (see #3 above). The total number of market and affordable units on both the sending and receiving sites are combined to determine the total IH requirement. For example, if the sending site has 100 units, and the receiving site has 100 units, then IH requirement is 25% of the two sites combined: 100 +100 = 200 total units = 50 affordable units.

The receiving site proposal should meet both the sending and receiving site IH requirements. Minor variations to the proportional unit mix may be considered but must be deemed by the city to provide equivalent community benefit to the proportional mix.

Livability Standards

All affordable units must meet the city Livability Standards for Affordable Units. Livability Standards ensure that the substantial and long-term public investment in affordable housing in the community be livable, of good quality and design and meet health and safety standards. The Livability Standards for Permanently Affordable Housing may be found on the Inclusionary Housing webpage.

Housing Inspections

The city will require a Housing Inspector for the receiving site to ensure quality construction, materials and installations and compliance with all affordable housing requirements, covenants, and agreements. The owner is responsible for the cost of the inspector which will be detailed in an off-site agreement and must be provided to the city prior to residential building permit issuance. A final report from the Housing Inspector is due prior to issuance of any certificate of occupancy (CO). This requirement will be documented in an on or off-site agreement.

Concurrency and Timing

All Receiving Site affordable units must receive, at a minimum, a temporary certificate of occupancy (TCO) within one year of the issuance of any temporary or final certificate of occupancy on the Sending Site.

8. SENDING SITE – Requirements Prior to Building Permit

The following are required prior to building permit submittal for the Sending Site:

• Land Use Review approval
• Inclusionary Housing Agreement for Newly Constructed Off-site Affordable Units (the “Off-site Agreement”) – This Agreement documents the requirements and responsibilities of the Sending Site developer and what must be provided when on the Receiving Site
• Determination of Inclusionary Housing Compliance - Documents the IH requirement for the Sending Site
• Receiving Site Location Approval

The following are required prior to building permit issuance for the Sending Site:

• Financial Guarantee - security to ensure the affordable units are completed. For details concerning the financial guarantee please see the full policy available on the Inclusionary Housing webpage.

9. RECEIVING SITE – Requirements Prior to Building Permit

All documents for the Sending Site per #8 above must be completed and accepted by the city. The following are required prior to building permit submittal for the Receiving Site:

• Land Use Review or Affordable Housing Design Review approval
• Inclusionary Determination of Inclusionary Housing Compliance - Documents the IH requirement for the Receiving Site
• Review and city approval of site and floor plans that meet the Livability Standards for Permanently Affordable Housing
• A Permanently Affordable Housing Covenant, Promissory Note and Deed of Trust; and any other required documentation. The Covenant deed restricts the units as affordable in perpetuity. Prior to signing the Affordable Housing Covenant applicant will need to provide a number of documents to the city including an “Authority to Sign” for any ownership organization, and a title good to within 30 days.

Remittance sufficient to cover the estimated cost of housing inspections is required prior to building permit issuance.

10. SENDING SITE – Certificate of Occupancy

The Sending Site may receive a certificate of occupancy. However, the IH obligation will not be satisfied until the affordable units on the Receiving Site also have a certificate of occupancy.

11. RECEIVING SITE – Housing Inspector

The city will utilize a housing inspector at the owner’s cost to ensure quality construction and compliance with all affordable housing requirements and agreements. The housing inspector will submit periodic reports of compliance to the city. Any incidents of non-compliance must be addressed in a timely manner during construction.

12. RECEIVING SITE – Final Certificates of Occupancy

Once the Receiving Site affordable units are completed, the following items will be addressed:

• Housing inspection costs - An estimate of the housing inspection costs are paid to the city up front and reconciled when the affordable units receive a certificate of occupancy. If the costs exceeded the estimate the developer will receive an invoice that must be remitted to the city, if the costs were lower than the estimate the city will remit the difference to the developer. Details are documented in the On-site Agreement.
• Financial Guarantee – the financial guarantee or any remaining balance will be released and/or any adjustments owed by the Developer will be collected when the affordable units have been accepted by the city and the Receiving Site has been issued a CO. Please see the financial guarantee policy for additional details.

The following process applies when deed restricting units at another location than the site that incurred the inclusionary requirement (off-site) or in an existing building within the site where new construction in a separate building is proposed.

Depending on the details of the development that generated the affordable housing requirement, off-site affordable units may be provided as for-sale or rental. These variations may have implications for the process and requirements of IH.

The table below includes the steps to propose deed restricting existing units off-site. The development generating the IH requirement is referred to as the Sending Site and the location where the off-site units will be provided is referred to as the Receiving Site.

The process outlined in this webpage is based on the Sending Site being a few months ahead of the Receiving Site in the development process. If the Receiving Site review process is ahead of the Sending Site, Receiving Site approvals may be held up pending Sending Site approvals and execution of required documents. The table below indicates the sequence of steps needed to satisfy IH with off-site by deed restricting existing units as permanently affordable.

For questions about this process please contact a housing planner at: inclusionaryhousing@bouldercolorado.gov.

Process and Timeline for Deed Restricting Existing Units Off-site:

1. SENDING SITE – Subject to Planning Land Use Review

Applicants with residential developments subject to Site Review, Use Review or other planning land use approval process start that process with the Planning Division (“planning”).

2. SENDING SITE – Initial Inclusionary Housing Discussion

Applicants in a planning land use review process will receive preliminary comments concerning the IH requirement through that process. Applicants proposing a by-right residential development not subject to a land use process should contact a housing planner as soon as possible prior to building permit submittal. In either case, the applicant and a housing planner should discuss the options available to meet the IH requirement. Once the Applicant determines to provide the affordable units off-site several meetings with staff will be arranged to ensure clear understanding of the requirements and timelines.

3. SENDING SITE – Preliminary IH Requirement

Based on the data provided in the site and floor plans and the Unit Data Spreadsheet, which is required as part of the review submittal, the housing planner will determine the IH requirement.

The IH requirement is based on a proportional determination of unit type, number of bedrooms and unit size to what is provided in the market rate units on the Sending Site. For example, a Sending Site with half single-family homes and half stacked flats will be required to provide half of the affordable units as single family or townhomes and half as stacked flats. Similarly, if the Sending Site units are half one bedroom and half two bedroom the affordable units will reflect that mix. The number of required bathrooms is based on the number of bedrooms per the following:

• 1 bedroom – equivalent number of baths in the Sending units up to 1.5
• 2 bedroom - equivalent number of baths in the Sending units up to 2
• 3 bedroom - equivalent number of baths in the Sending units up to 2.5
• 4 bedroom - equivalent number of baths in the Sending units up to 3

The size of the affordable units is determined based on the following table, which can be found in the IH Administrative Regulations.

Affordable Unit Size Requirements:

For-sale developments must provide for-sale affordable units with the following affordable prices: The initial sales price for single family homes and townhomes will be affordable to a household earning 120% AMI. The initial sales price for all other types of housing will be affordable to a household earning100% AMI.

Rental developments may provide either for-sale or rental affordable units. 80% of the rents will be affordable to a household earning no more than sixty percent (60%). Twenty percent of the rents will be affordable to a household earning no more than fifty percent (50%) of the area median income. Rents are adjusted annually. Details about managing affordable rental units may be found in the Rental Compliance Manual.

Affordable prices are adjusted quarterly; rents are set annually. Prices and rents are established by the city based on the IH ordinance when the deed restricting covenant is executed.

Once the IH requirement for the Sending Site is determined, a proposal for the Receiving Site may be determined.

4. RECEIVING SITE – Off-site Location Approval & Preliminary Approval

Proposals for deed-restricting existing units to meet IH requirement off-site must first have the proposed location and preliminary proposal approved. These approvals are the first step towards approval of a proposal to deed restrict existing units. However, these approvals do not ensure the proposal will be approved.

1. The off-site location request will be reviewed to determine the degree to which it meets the following criteria:
   1. Consistent with Boulder Valley Comprehensive Plan policies for affordable housing, including 7.13 (Integration of Permanently Affordable Housing) to disperse and integrate affordable housing throughout the community;
   2. Annexed and zoned for residential use;
   3. Consistent with the land use map and the service area map;
   4. Consistent with any applicable adopted area plans;
   5. Able to support multi-modal mobility (walking, biking, and other alternatives to the single-occupant vehicle); and
   6. Compatible with adjacent uses.
2. The preliminary proposal will be reviewed to determine the degree to which it meets the following initial criteria:
   1. Determination that the property is habitable and in good condition and can be successfully rehabilitated to meet the final requirements as an affordable home.
   2. Not located in a majority student neighborhood preferred.
   3. Not located on a block with a high percentage of pre-existing affordable housing units preferred.
   4. No portion of the property in the 100-year flood plain or the high hazard or conveyance zones.
   5. Building must have been constructed within the last ten years from the date of the proposal.

Applicant submits a Pre-Application Review form to the Planning Division which includes a letter detailing specifically how the proposed location and preliminary proposal will meet the above criteria. In addition, the Pre-Application process may also be used to answer other questions the applicant may have about deed restricting existing units. Additional details about the off-site location approval process may be found in the “Off-site Location Review Process” document on the city web site.

Preliminary Proposal

Once a preliminary estimate of the IH requirement for the Sending Site is determined and the off-site location and preliminary proposal is approved, existing units may be proposed to meet the IH requirement. The existing unit mix should substantially reflect the Sending Site requirement. However, minor variations due to existing unit constraints may be considered.

After a walk-through of the proposed affordable unit(s), the city will issue a Preliminary Proposal Determination letter indicating the proposed units(s) do or do not meet the additional preliminary criteria below, pending acceptable rehabilitation.

Additional Preliminary Criteria:

• Units meet the size, bedroom & bath proportional requirements.
• Determination that the property is habitable and in good condition and can be successfully rehabilitated to meet the final requirements as an affordable home.
• Not located in a majority student neighborhood preferred.
• Not located on a block with a high percentage of pre-existing affordable housing units preferred.
• No portion of the building located in the 100-year flood plain or the high hazard or conveyance zones.
• Detached homes or townhomes, the home must have been constructed after 1980.
• Attached homes, the home must have been constructed within ten years from the date of the proposal.
• Attached homes, not located in a building or development with greater than twenty-five percent (25%) pre-existing affordable housing units is preferred.
• Units with existing affordability requirements do not qualify.

5. SENDING SITE – Land Use Approval

Once the Sending Site land use approval is finalized, the IH requirement for the Sending Site can be finalized and used to finalize the Receiving Site proposal.

It is assumed that the Sending Site will get approvals and start development before the Receiving Site. If the Receiving Site process gets ahead of the Sending Site, Receiving Site approvals may be held up pending Sending Site approvals and execution of required documents.

Sending Site developments subject to technical document review should start that process with the Planning Division. Steps 6-9 below may be completed concurrent to the technical review process.

6. SENDING SITE – IH Program Finalized

If there are any changes to the Sending Site from the time the preliminary IH requirement was done, the requirement may need to be adjusted. The final requirement will include the type and number of units, size, number of bedrooms and baths and levels of affordability.

7. EXISTING UNITS – Final IH & Rehabilitation Proposal

Once a final IH requirement for the Sending Site is determined and the preliminary proposal and location review are approved, the off-site proposal may be finalized.

Sending Site IH Requirement

The proposal should substantially reflect the Sending Site requirement. However, minor variations due to existing constraints may be considered. In some cases, the IH requirement for the Sending Site and proposed program will not match exactly. In this case the Sending Site applicant and housing planner will agree upon equivalencies to the IH requirement.

Home Inspection Report

The Owner will hire, at the Owner’s expense, an ASHI-certified home inspector (or other nationally recognized home inspection program) to complete a comprehensive inspection. A critical needs assessment may be provided in place of the home inspection if approved by the City Manager. In addition, city housing staff will inspect the home.

Final Proposal

The applicant provides the housing planner with a final proposal that includes the following (each item is described below):

• Summary of the Sending Site IH requirement and details on how the proposal meets the Sending Site IH requirement.
• Proposed existing building and date and case number of the location approval (see number 4 above) that will be deed restricted.
• Rehabilitation proposal that includes both a home inspection report and the city staff inspection report and detailed information on how each item will be addressed.
• Specific details on how the proposal will meet the final criteria.

Rehabilitation Program

Acceptance of any existing off-site building, site, or unit shall be based on individual property characteristics. The city manager shall determine the requirements, process, and criteria for acceptance of an existing dwelling unit as permanently affordable which may include but is not limited to date of construction, location, initial and rehabilitated condition of the unit.

City approval will be based on the proposal addressing all items identified in the home and staff inspections, meeting the criteria listed below and the completed units be comparable to what would have been provided in a newly constructed unit on the Sending Site. Finishes do not have to be exactly the same as the Sending Site market finishes but should be functionally equivalent. For example, counter tops in the market units may be granite, the affordable unit counters may be laminate. The proposal will be reviewed by the city staff who may request changes prior to approval. Once a final proposal is approved by the city an interim covenant securing the affordability of the units will be executed. This covenant will be replaced with final covenants once the rehabilitation is completed and the city accepts the units into the affordable housing program.

Final Criteria

The following requirements and standards must be met for the property to be deemed acceptable as a permanently affordable unit. Exceptions may be considered by the city on an individual unit basis. Replacement does not apply to items maintained by the HOA:

• Meets Livability Standards; staff may grant exceptions on a case-by-case basis based on existing constraints.
• If applicable, HOA dues for single family homes must be below $50/month, and multi-family homes below $250/month.
• If applicable, the HOA must have adequate capital reserves for major capital expenditures anticipated in the subsequent 10-year period.
• Kitchen and baths have finishes and fixtures similar to new products or replaced.
• Muted, neutral paint, trim, tile, and cabinet colors in excellent condition or replaced.
• Appliances that are in excellent condition, under warranty or replaced.
• Carpet in excellent condition or replaced; wood floors in good condition or refinished.
• Windows in good condition sealed and refinished or repainted or replaced.
• If applicable, homes eligible for FHA financing with a clean and insured title.

Single, duplex, four-plex buildings or any building where greater than 30% of the units are proposed as affordable:

• Attractive, thriving, complete landscaping or replacement.
• Systems, heating, plumbing, electrical, roof, foundation, structure, driveway in average or above average condition with no additional work anticipated in the next five years or replaced.

Agreements and Housing Inspection

These and additional details of the proposal as agreed upon by both the city and applicant will be included in a Deed Restricting Existing Unit Agreement (the “Agreement”). The city will utilize a housing inspector at the owner’s cost to ensure quality rehabilitation and compliance with all affordable housing requirements and agreements. Details concerning the goal, scope and cost of the inspector will be included in the Agreement. The Receiving Site may not receive a letter of completion and the units will not be accepted to satisfy the inclusionary requirement until the housing inspector issues a final report indicating all quality standards and contractual requirements have been met.

8. SENDING SITE – Requirements for a Building Permit

The following are required prior to building permit submittal for the Sending Site:

1. Location Approval letter
2. Preliminary Proposal Determination letter from city indicating the proposed units(s) meet the preliminary criteria pending acceptable rehabilitation
3. Final Proposal approved by the city
4. Interim Covenant and all supporting documentation executed for the existing units
5. The Agreement documents city acceptance of the final proposal including all requirements and responsibilities
6. Determination of Inclusionary Housing Compliance form - Documents the basic agreement for the Sending Site IH requirement and how it will be met
7. Housing Inspections – fees sufficient to meet the estimated cost of inspections
8. Financial Guarantee for off-site existing units that will not receive a CO before the market units - security to ensure the affordable units are completed. For details concerning the financial guarantee please see the full policy on the Inclusionary Housing webpage.

9. EXISTING UNITS – Housing Inspector

The city may utilize a housing inspector housing Inspector during the rehabilitation to ensure quality construction, materials and installations and compliance with all affordable housing requirements, covenants, and agreements. The owner is responsible for the cost of the inspector which must be provided to the city prior to residential building permit submittal for the sending site. A final report from the Housing Inspector is due prior to issuance of any certificate of occupancy (CO) or letter of completion.

10. EXISTING UNITS – Final Inspections, Covenants

Once the Applicant completes the rehabilitation, passes any applicable building inspections, and the housing inspector verifies all contractual obligations and livability and other standards as identified in the approved final proposal have been met the following items will be finalized:

1. Letter of completion from the city – may be issued
2. Covenant – Execute an interim covenant on the underlying parcel and a final deed restricting covenant for each condominimized affordable unit or on the underlying land for rental units not condominimized.
3. Housing inspection costs - reconciled
4. Financial Guarantee - The financial guarantee released

All Receiving Site affordable units must achieve a city issued Letter of Completion following final inspections within one year of the issuance of any temporary or final certificate of occupancy on the Sending Site.