Cooperative Housing Ordinance: What You Need to Know
On Feb. 16, 2017, the City of Boulder's cooperative housing ordinance (Ordinance No. 8119 ) took effect.
What is a Cooperative House?
Residents of a cooperative house have a high degree of social cohesion and teamwork. The residents typically govern through consensus and share responsibilities and resources. New members are typically selected by the community's existing membership, rather than by real estate agents, property managers or non-resident landowners.
The ordinance identifies three cooperative types:
- Not-for-Profit Permanently Affordable Cooperative - A rental cooperative owned by a 501(c)(3) corporation with a housing focus. All rents must be affordable to households earning 60 percent of the Area Median Income.
Permanent Affordability (Cooperative Housing) means rents will be restricted to 60 percent of the area median income. Unless otherwise required, such as if affordable housing funds are awarded, household income will not be verified or documented. Rents on individual bedrooms will be determined based on the “0 bedroom equal or greater than 475 sq. ft.” rent category of the city of Boulder rent table. If households with more than one person, such as a parent-child household or a couple household, rent one room, monthly rent for that household would be based on the number of rooms rented (i.e., one bedroom) not the number of individuals in the households. If a household rents more than one room, monthly rent cannot exceed 60 percent of the area median income for 0-bedroom units for each room that household rents.
- Private Equity Cooperative - A cooperative in which two-thirds of the owners are residents and two-thirds of the residents are owners.
- Rental Cooperative - A cooperative in which more than one-third of the residents are renters.
How to Apply
Prospective applicants can download the applications online from the Applications and Forms Database or by obtaining a hard copy at 1739 Broadway on the third floor. Please search or ask for the "Administrative Review Application Form" and Cooperative Housing Units attachment document. The city is now issuing licenses and will continue until the maximum number of licenses have been issued for the calendar year.
Working with an Expert Cooperative Housing Organization (ECHO)
As a part of the application process, cooperative houses wishing to obtain a license will have to work with an ECHO. An ECHO is an organization recognized by the city as having experience and expertise in the formation, operation and organization of cooperative housing units. The role of these organizations will be to train, verify legitimacy and provide recommendations to city staff regarding prospective housing cooperatives that have applied for a license from the city. Applicants for a cooperative housing license are required to seek training and certification by an ECHO. An applicant shall submit evidence of such training and certification as part of an application for a cooperative housing license.
To find an ECHO or apply to be an ECHO visit this webpage.
Timeline of Public Consultation on Co-op Housing Ordinance
- Jan. 26, 2016 – City Council held a study session to discuss cooperative housing.
- April 21, 2016 – Planning Board held a public hearing and discussion.
- May 17, 2016 – City Council held a public hearing on first reading.
- June 21, 2016 – City Council held a continued first reading.
- Oct. 4, 2016 – City Council held a public hearing on second reading.
- Oct. 11, 2016 – City Council discussed the proposed ordinance at a continued second reading.
- Nov. 17, 2016 – Staff posted the proposed ordinance on the council hotline.
- Nov. 30, 2016 – Staff conducted a meeting to answer community concerns.
- Dec. 6, 2016 – City Council considered proposed changes to the ordinance.
- Dec. 12, 2016 – Staff posted a revised version of the proposed ordinance as well as a summary of changes and five potential amendments responding to council direction.
- Dec. 13, 2016 – City Council voted to have an additional public hearing on third reading.
- Jan. 3, 2017 – City Council held a third public hearing. Council amended and passed Ordinance 8119 on third reading.
Cooperative Housing FAQ
The ordinance imposes a limit of 12 residents in low density residential districts and 15 in all other districts. In addition, a cooperative must provide 200 square feet of living space per person, in all districts, which is the minimum required by the International Building Code. There is a provision that would allow for a higher occupancy limit in any permanently affordable cooperative, if recommended by the Planning Board after a public hearing. Finally, the ordinance requires that each applicant submit a plan showing sufficient legal sleeping areas for the number of proposed residents.
Not-for-Profit Permanently Affordable Cooperatives and Rental Cooperatives will require both a cooperative license and a rental license. Private Equity Cooperatives will only require a cooperative license, unless the cooperative has renters, which will require a rental license. For a Rental Cooperative, the cooperative organization will hold the cooperative license and the landlord will hold the rental license. For Not-for-Profit Permanently Affordable Cooperatives and Private Equity Cooperatives that have renters, the cooperative organization will hold both licenses.
Generally, the city will issue ten licenses per year. However, if there are fewer than two licenses in any of the three cooperative categories, up to two additional licenses may be issued in each of those categories for a potential total maximum of fourteen licenses issued each year.
Licenses will be renewed every four years, but a licensee will have to be re-certified and have a life/safety inspection every two years.
Cooperatives must be at least 500 feet from another cooperative as measured from the respective property lines.
Rental cooperatives cannot be located in a dwelling unit with less than 2,000 square feet of habitable space. The dwelling unit cannot have been modified within the last five years to reach 2,000 square feet.
A cooperative can be located in any zone district except agricultural, industrial or public.
Only people with an owning interest in a prospective cooperative may apply for a license, and no person under 21 years of age can own an interest.
Only a legitimate cooperative can be licensed. An outside organization will provide the prospective cooperative members with certification and training. The outside organization’s certification will be a recommendation to the City Manager who will make the final decision to authorize the cooperative. The criteria, which can be supplemented through City Manager rule, are in Section 10-11-14.
All cooperatives must submit a plan to limit on street parking to no more than three cars. Cooperatives in Neighborhood EcoPass districts are required to include in the plan that every resident who is licensed to drive will also have an EcoPass. Cooperatives in Neighborhood Permit Parking Zones are limited to three residential permits and six two-week guest permits.
There are no grandfathering provisions for existing illegal cooperatives. However, cooperatives in existence on Dec. 6, 2016 will be permitted to apply for a cooperative license while still occupying the same home. However, the existing cooperative must still be one of the first ten applications. All other applicants will need to be licensed before occupancy.
All cooperatives that include rentals will be required to comply with the rental licensing code. This will subject the cooperatives to the SmartRegs requirements as well as the requirements of the International Property Maintenance Code.
There are several enforcement provisions in the ordinance. First, the City Manager has the option of denying a license if the cooperative is determined to be illegitimate. The City Manager may also decide not to renew a license or issue a limited-term license on renewal if the cooperative fails to pass inspection or certification. Cooperatives must maintain compatibility with the neighborhood. A cooperative can be deemed incompatible if the City Manager receives multiple complaints relating to parking, noise, trash or weeds. The City Manager also has the authority to order a property vacated if the cooperative is in violation of any provision of the new chapter or of the property maintenance code. Finally, the City Manager has authority to issue notices of violations resulting in administrative penalties. The penalty schedule is $150 for the first violation, $300 for the second and $1,000 for the third. Finally, the City Manager has authority to revoke a cooperative license.
Private Equity and Not-for-Profit Permanently Affordable cooperatives are afforded a limited property right. If after licensing, the city changes land use regulations in a way that would ordinarily bring these types of cooperatives out of compliance, the affected cooperatives may continue as nonconforming uses under the conditions to which other non-conforming uses are subject. Rental cooperatives do not have this protection. This does not affect the City Manager’s ability to impose sanctions for violations, including revocation or orders to vacate.
The ordinance creates a cooperative licensing fee of $645. This fee represents $105 for basic cooperative housing licensing review and four hours of additional review time at $135 per hour. The review fee would pay the cost of reviewing the certification, the parking plan and other elements of the application that involve more than verifying life/safety components. An additional $105 rental housing licensing fee and $50 SmartRegs service fees will be charged for those cooperatives that are subject to the requirement.