July 23, 2019 Re:
Downpayment Assistance Program
Mayor Jones and Members of Boulder City Council: As the Boulder City Council evaluates a potential middle-income downpayment assistance program, the Boulder Chamber wants to be clear that we strongly support the City of Boulder’s efforts to increase our community’s middle-income housing inventory. In the face of rising housing costs, Boulder’s middle-income inventory has declined significantly in the past decade. Further, housing costs have increased faster than incomes are rising, which puts additional pressures on middle-income community members who are interested in buying a home. The proposed middle-income downpayment assistance program could provide access to homes in our community for many who do important work, from teachers and firefighters to retail store managers and nurses. In this way, we’re helping to maintain an economically diverse community. Our current housing prices force more people to live farther away and incommute because they simply cannot afford to live in Boulder. As you further develop the middle-income downpayment assistance program, we offer the following points for consideration: 1) Be cognizant of how deed restricting market rate homes may apply unintended pressures to the remainder of Boulder’s housing market. We appreciate the interest in retaining the inventory for middle-income-qualified buyers. Deed restrictions add additional pressures to the already limited middle-income housing inventory, taking out inventory from the conventional market. Please consider if this element of the program is necessary, especially for smaller sized housing that is already relatively affordable. 2) Allow for the middle-income home buyers to accrue equity that allows them to graduate to the next level of homeownership and remain in the community. The majority of Americans earn wealth through their home’s appreciation. Too severely limiting the ability to realize market gains on this investment also limits their ability to graduate beyond deed-restricted housing as their family grows and their financial situation advances. 3) Middle-income inventory has already declined significantly due to statewide construction-defect laws. The risk of construction-defect litigation at the state level has severely decreased the inventory for attached housing. While condominiums and townhomes were historically 25% of the new construction inventory, it was reduced to 3% after the passage of the construction defects laws. We must provide further legal relief from construction-defects litigation in order to accelerate the construction of attached housing. Thank you for these considerations as you assess this important opportunity to address the housing needs of our middle-income community members. Sincerely,
John L. Tayer President and CEO