Appraising Permanently Affordable Homes

 

Are you a single unit or lender appraiser?

For single unit appraisals for mortgage financing, please see the last paragraph in the Mortgage Policies.

  

Are You a Development Appraiser?

What you need to know:

All annexed parcels with residential unit development potential, regardless of size, are subject to the requirements of inclusionary zoning.  Generally speaking, Inclusionary Zoning requires that 20% of the total number of units be permanently affordable to low income households.

There are a variety of ways to meet the inclusionary requirement, including dedicating units on-site, dedicating existing units off-site, land donation and making cash-in-lieu contribution to the City's Affordable Housing Fund or any combination thereof.

What does "permanently affordable" mean?

Permanently affordable means a given unit has an ongoing resale restriction that is designed to keep the unit affordable, in perpetuity, to low income households.  The exact terms of the resale restriction are contained in the covenant which is recorded against each property.  Permanently affordable units must also be owner-occupied by income eligible households. 

Allowable sale prices for permanently affordable units.

Maximum allowable sale prices for permanently affordable units are set each quarter by the city.  Current prices may be found under the "Are you a Developer/Inclusionary Zoning" section of this website.

Cash-in-lieu amounts.

Developers have the option of paying a cash amount in-lieu of building or acquiring the required permanently affordable units.  The cash-in-lieu amounts for 2007 are as follows:

• For each required permanently affordable detached unit = $120,719.39
• For each required permanently affordable attached unit = $ 103,157.89

These amounts apply to projects with four or less total units and to projects which meet at least half of the inclusionary zoning requirement with on-site permanently affordable units. 

If a developer elects to meet more than half of the entire inclusionary zoning requirement with the cash-in-lieu option, and the total number of units in the project is five or greater, then the above amounts are increased by 25%.

Cash-in-lieu amounts are adjusted annually, based upon the percent change in the previous year's median sale prices for detached and attached housing.

Annexations are Different!

Proposed annexations with additional development potential need to demonstrate community benefit consistent with Boulder Valley Comprehensive Plan (BVCP) policies in order to offset the negative impacts of additional development in the Boulder Valley.  For proposed residential development, emphasis is given to the provision of permanently affordable housing.  The BVCP lists the following additional benefits that may be considered as part of an annexation request:  Receiving sites for transferable development rights; Reduction of future employment projections; Land or facilities for public purposes over and above that required by the land use regulations; Environmental preservation; or other amenities determined by the city to be a special opportunity or benefit.  Annexation requests that do not result in additional density are not expected to provide the same level of community benefit required of vacant, developable parcels.

Typically, for small, very low density residential development, the permanently affordable housing community benefit has been provided in the form of a cash-in-lieu contribution equal to twice the applicable inclusionary zoning amount for each newly constructed unit.  Absent other community benefits consistent with BVCP policies, this amount is not negotiable.  However, the community benefit policy will not apply if the property is annexed with an initial zoning of RE and no additional development potential is created.

The policy and practice for the past several years has been that 60% of the new development on low, medium or high density parcels be permanently affordable to low and middle income households, usually split evenly between the two income groups.  As little as 40% of the new development could be provided as permanently affordable to low and middle income households if other important community benefits are provided in the proposed development.

 

 

Last Updated on Thursday, 08 January 2009 04:54