Lessons from Boulder

If the Chapel Hill-Carrboro Chamber of Commerce aimed to scare travelers on its 2016 Nancy OatesInter-City Visit into thinking that height restrictions and no-build buffers would make real estate prices skyrocket, someone forgot to clue in the Boulder speakers.

The chamber organized a trip for about 80 of us from Orange County – elected officials, business owners, developers and UNC brass – to spend a few days in the university town of Boulder to gather ideas that might translate well to Chapel Hill. The Greater Boulder area has a population of about 100,000, about 30,000 of them students at the University of Colorado – Boulder, which is nearly a mile from downtown.

Boulderites fiercely protect their views of the foothills of the Rockies, capping building height at 55 feet. (Some structures are grandfathered in, and the university is exempt though tries to be a good neighbor.) During the 1950s, a period of strong growth, town leaders set “the Blue Line” a little ways up the mountain. Similar to our Rural Buffer, no water and sewer lines can cross the line, which severely limits development. Boulder began buying up acreage along the Blue Line and today owns 45,000 acres of permanently conserved land.

Before we went on the trip, I heard fear-mongers blame development restrictions for Boulder’s notoriously high real estate costs – the median price for a single-family house is $863,000 – and intimated that Chapel Hill was on the same path. But once we heard the presentations from various city, university and business leaders, a different picture emerged.

Real estate prices are subject not only to supply and demand but to how much people will pay. In 1997, Bank of America billionaire C.D. Spangler offered the Dellingers a million dollars for the old Presbyterian manse on East Franklin in Chapel Hill. For the next year, sellers listed their homes on East Franklin for $1 million-plus before realizing that no more billionaires were interested in living on Franklin Street, and prices dropped by more than half.

Boulder is rife with venture capitalists and other ultra-wealthy individuals drawn to the town for reasons other than proximity to their job. If you’ve got $100 million in your checking account, paying $863,000 for a house doesn’t seem out of line.

Of all the people I spoke with involved in real estate, development or planning, not one believed that building a large supply of high-rent apartments would lower rents elsewhere in town. It would merely raise the floor of rents everywhere.

On the trip we learned that Boulder’s elected officials take affordable housing seriously. The town’s Inclusionary Zoning Ordinance calls for 20% of a development to be permanently affordable to those at the 60% AMI level. (Boulder’s AMI is about $94,000, due to all those high-paying tech jobs.) Boulder has a culture of risk-taking, and its city council has no problem turning down a developer who doesn’t want to adhere to town standards.

On the commercial side, when businesses outgrow their space, they move toward Denver but still stay in the region. Or they are sold, and the seller invests the proceeds in starting a new business. Either way, the money stays in the local or regional economy.

My takeaways? Supply-and-demand theory is out; town council backbone is in.
— Nancy Oates

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  1. Plurimus

     /  October 3, 2016

    Nancy, did you learn anything about Boulders commercial development mix and policies that might differ from Chapel Hills?

    How are incubators and startups handled with the university?

    I noticed that Travis Crayton went along on the junket. Given his statements in the past, did he takeaway the same message on supply and demand?

  2. Del Snow

     /  October 3, 2016

    The fear mongering is alive and well. I would love to see a column expressing your point of view as a balanced and fair counterpoint to Mark Zimmerman’s 10/2 column in the CH News http://www.newsobserver.com/news/local/community/chapel-hill-news/chn-opinion/article104978321.html

    Mark seems to want to increase housing, not only in the voo-doo belief that it will bring prices down, but for housing the high end employees of the high end businesses that we are not attracting. And, once we build all those high end apartment complexes, where will the employers be able to locate?

    Instead of looking at the Town area by area, we should have followed through on the “grand vision” for a comprehensive CH plan promised by 2020. We never completed the focus area studies, we never looked at the cumulative impact of all of them together as originalty planned.

  3. Mark Zimmerman, in his regular screed, apparently believes Boulder, just like Chapel Hill, needs a strong dose of Reagan-era trickle-down economics to fix its housing woes and that Boulder’s consistent planning policies are a real mistake.

    Contrary to everything they’ve said and done, he also claims Pam Hemminger, Nancy Oates and Jess Anderson are anti-growth.

    Presumably Zimmerman, whom as a Caswell county registered Republican can’t vote these “evil-doers” out, is calling on Chapel Hill voters to rise up and reverse ’15: “first we must overcome anti-growth opposition which threatens that path with its electoral victories last year”


  4. Nancy – I agree- this column belongs in the local papers.


  5. Let’s hear what the Boulderites themselves have to say about their situation:

    “More than fifty years ago Boulder set out to become a compact and, most important, a finite community, one that rejected the bigger-is-always-better model. This idea was opposed at the beginning, and has been opposed ever after by those who profit from growth, but also by people who feel that a community must grow to remain vibrant. That view holds that a town is either growing or it is decaying—a community and an economy cannot thrive without growth. Among the arguments against controlling growth is that limiting growth in an attractive place like Boulder will inevitably result in a wealthy enclave. If not rectified, the jobs/pop imbalance in Boulder will lead to that outcome, which will discourage other communities from trying to control growth. Much of the value of Boulder’s leadership in community planning will be lost or discounted. Lost as well will be the vitality of our community.”


  6. Terri

     /  October 3, 2016

    Has anything of consequence ever come out of one of these trips? I’m all for learning from others but it seems to me the towns that are usually visited are chosen because they fit a certain image other than just college town. If high end housing is the problem that resulted from Boulders planning decisions, what was there to learn from them? And why don’t other towns ever want to visit Chapel Hill?

  7. Terri, good question.

    Here’s what you had to say about the resource investment 10 years ago:

    It’s interesting to look at attendance by elected official and staff within each of the local governments:

    Chapel Hill: 5 staff members; 4 elected officials
    Carrboro: 2 staff members; 4 elected (sort of) officials
    Orange Co: 3 staff members, 2 elected officials
    Hillsborough: 0 staff, 2 elected officials

    Chapel Hill seems to be taking the trip the most seriously, sending their public works and planning dept directors, 2 members of their transportation planning dept, and their town manager. Carrboro and Orange Co are sending their economic development directors and managers. Half of Chapel Hill’s Town Council is going and just over half of Carrboro’s BOA (if this list is correct).


  8. Terri

     /  October 4, 2016

    Will, this time I’m asking about the return on the investment. the only change I can think of is a big one and it’s the street workers for the homeless. Any others?

  9. Nancy

     /  October 4, 2016

    Plurimus, I didn’t talk with Travis Crayton. I spent my time talking with people not from Chapel Hill. I’m sure he’ll write a column about his takeaways. Boulder has industry and high-tech, independent of startups from the university.

    Will, you’re working with the town on outcomes of some recent residential projects. Do you have racial information on the residents? Mark Zimmerman touched on this in his article. Are we building apartments that only attract wealthy white tenants? The lack of diversity in downtown Boulder was striking.

    Terri, I think what came out of this trip was that we could see firsthand that housing prices aren’t simply a matter of supply-and-demand, that the presence of so many ultra-wealthy individuals factors in, that we have to pay attention to whether we are making room only for upper-middle-class white tenants, and that to make room for people with the normal jobs that keep the town functioning takes a conscious effort and means sometimes saying no to applicants who propose projects that don’t fit with the town’s vision. I would not have understood that had I stayed home.

    David, thank you for finding that link. I was confused by Mark’s column, because when the electorate in Boulder did a clean sweep, they elected a well-known environmentalist as mayor. Seems to argue against his point.

  10. Scott Radway

     /  October 4, 2016

    Nancy, I think it is important to add for the discussion of affordable housing similarities and differences that Boulder has an aggressive housing implementation organization that buys land and develops it with the affordable housing – sometimes with a mix of housing providers including market rate housing. They also land bank when acquisition of key properties is beneficial. Most importantly is that we heard that for new rental and ownership housing, 95% or so of those projects provide a payment it lieu to fund their share of new affordable housing. They also use the project approval process much like we do with rezoning for projects that propose rental housing [regardless of market target] in that they leverage the approval to get the payment in lieu, because like us the have state level restrictions on price control [rent control] in rental housing.

  11. Plurimus

     /  October 4, 2016

    Nancy, that’s too bad. I think this is part of the problem. There are too many disparate and conflicting takeaways and spins for the general population to gain any value. Perhaps a meeting with all participants to discuss *before* people start publishing takeaways?

    The reason I say this is that it seems fashionable these days for people to draw a conclusion that matches a political preconception then reason their support for it.

    The echo chambers are well insulated despite the common complaint that people are not listening.

  12. The local Boulder newspaper ran a six-part series that explores the local political context within which the growth-related ballot measures were defeated last fall and what that defeat might portend for Boulder’s future.


  13. Scott Radway

     /  October 4, 2016

    David, thank you for the link to Ben Hardings pre referendum article about future direction for Boulder. It is thoughtful and seemingly discusses issues with little or no bias. Like Chapel Hill, Boulder has someplace between 95-100% of its existing municipal land developed. Generally that means the only way change will occur is redevelopment of land at higher intensity or redevelopment for public/semi-public uses for lower intensity uses, often urban parks and open spaces. In Boulder, their ability to annex new land and negotiate for better housing options provides a tool we no longer have. I think it is worth reading Ben Hardings comments in the article after the section David provided. It tackles the jobs or housing issue squarely and provides a conclusion that more housing in Boulder and less employment is a reasonable way to approach redevelopment and balance between jobs and housing. In quotes is this part of his article: “I suggest that we re-focus our primary community-shaping efforts, and money, from Open Space, which has been very successful in creating a compact community, to an Urban Space program that would implement some of May’s ideas but would also put resources to a long-term program of converting commercially-zoned land (and even existing commercial developments) to multi-family housing. This will lead to a higher build-out population for Boulder, but in my view that will be well worth the value of recovering a vibrant community. While we are at it, we would have the perfect opportunity to build “15-minute” neighborhoods that will have many benefits. Given the self-interest of current home owners (I am one) and that of the real estate, retail and publishing sectors, I can’t be too optimistic that Boulder will find a way to fix this. Maybe in 50 years Pearl will be as notorious as Rodeo Drive, and Boulder will have Maserati and Ferrari dealerships (“It’s the lifestyle”). If this future concerns you, if you have a shred of optimism, and if you want to at least try to move Boulder in the right direction, cast your votes to discourage development of new jobs and to encourage development of new housing.”

  14. Terri, I went to the Friends of Downtown meeting where several participants weighed in on their Boulder experience.

    The Chamber affiliated folks, predictably, had a particular narrative which avoided I believe a very key lesson: Boulder capped building heights – and thus absolute density – to 55′ and is still booming. In other words, this strong land-use policy, along with a slew of others, hasn’t done what the Carolina Chamber claims will happen here – affect economic opportunity.

    While it was mentioned that there’s 100K people/100K jobs, 60% of those jobs are filled by commuters. David has a link above to an article which says Boulder is on-track to have a “job density ratio” of 3 jobs per person – well higher than other West coast cities.

    A few other notable items that came out but haven’t been reported on:
    – affordable housing is mainly located on the periphery OR in undesirable locations (Fred Black said the noise from the train was so loud the hotel they stayed at – which was adjacent to affordable housing – provided ear plugs).
    – legalizing marijuana caused a land-rush on old warehouses targeted for redevelopment. Indoor grow farms now compete with tech startups for space.
    – Boulder is investing in transit for commuters as a cheaper option than building affordable

    Terri, I monitored the ICV2016 trip as best as I could as it unrolled and checked out items of interest as they arose. There is plenty of material documenting Boulder’s failures and success, history and future plans. If the trip was just about learning then there was no reason to send a zillion people.

    But, as I’ve mentioned before, that isn’t the Chamber’s primary mission.

  15. Nancy, I’m still working on some basic demographics for the bigger luxury condo projects.

    I’ve got enough information to tease out approximate numbers of owner-occupied units and to get basic info on each of the owners. I believe the Council might be surprised how many out-of-town owners benefited from the tremendous community bestowed largesse on 140West or any of the other partially taxpayer subsidized developments.

    For a deeper dive I’ve suggested the Town use a combination of commercially available marketing data – which is scarily thorough and pretty cheap – and surveys. Commercial data can reveal # of occupants, ages, gender, income, race and a slew of other datapoints.

    Beyond getting a sense of whom these units serve, it would be nice to see how rapidly the switch hands. If you recall, the promise of 140W and Greenbridge was a stable, longterm 24/7 population Downtown.

  16. Deborah Fulghieri

     /  October 8, 2016

    What are Boulder’s property taxes like? Do they have separate rates for residential, multi-family, and commercial properties, as in some states? Are property values reassessed regularly? Or are they frozen for the duration of ownership, as in California?

  17. Nancy

     /  October 8, 2016

    From what I can tell, Boulder County residential property tax rates are reasonable — 9.3% at present but that is on the assessed value times the assessment rate, which is 7.96%. So a $350K house would be multiplied times .0796 = $27,860, which is then multiplied by .093 = $2,591. More than half of that tax goes to schools. Property is re-assessed every other year. It doesn’t appear that the city has any special impact fees. Commercial and industrial property is valued at 29% of market value, and the tax is on that value. It appears to be the same rate as residential.

  18. Plurimus

     /  October 8, 2016

    Of course Boulder has a new and growing tax revenue base:

    Boulder spends about 55% of its budget on schools; or about 328M http://www.bouldercounty.org/doc/government/2016budgetbrief.pdf

    BUT…… Boulder Valley School District student enrollment is growing by about 5 percent over the last five years and they support some 60 facilities. Boulder county is closer in size and growth to Wake than Orange county.