Updating Land Use Policies & Processes

Approving Density Bonuses

Overview and Description

Density bonuses can be useful zoning policy considerations that create more housing opportunities without increasing land use. Density bouses are special permissions or policies implemented by local officials to incentivize developers to increase the stock of housing while requiring additional affordable units be included within the development.

Opportunity and Examples from Colorado

The Town of Pagosa Springs adopted a density bonus in 2021 to incentivize affordable housing development. The policy allows density bonuses to be provided to developers when the Town Council deems fit.

Colorado Springs included density bonus opportunities within the form-based code for downtown that allows for greater density and height when the development plan includes “socially beneficial building elements.” Some of these elements include market rate housing units, affordable housing units, green building design, and historic preservation.

Denver’s Downtown Golden Triangle area recently received zoning changes that allow for greater height and density for building design. The City Council voted in favor of these changes to improve access to more housing units while reserving space for affordable units.

Developing Inclusionary Housing Ordinances

Overview and Description

Inclusionary Housing Ordinances (IHOs) are locally implemented zoning policies that mandate a certain number or percentage of affordable housing units to be added into new market-rate developments. Requirements can apply to both rental and for-sale development. Local elected officials can create IHOs alone of as part of broader land use updates.

Opportunity and Examples from Colorado

Denver: In 2022, Denver City Council passed an inclusionary housing requirement for all new residential development of 10 units or more. This law was a direct response to HB21-1117, a statewide law that clarifies the authority of local governments to implement inclusionary housing ordinances in their jurisdictions. The Denver policy provides different requirements for different market areas to avoid a blanket approach that would not benefit to all areas and neighborhoods. Because HB21-1117 requires local governments provide developers an alternative option to delivering affordable units, Denver’s law allows developers to pay a “fee in lieu” to the City’s affordable housing fund instead of implementing affordable units

Telluride has a Land Use Code that requires the development of affordable housing units with all new housing development in the area. This policy ensures sufficient development of affordable housing throughout the city that matches any new development.

Longmont implemented an inclusionary housing ordinance that mandates 12 percent of units within a new development must be affordable to households at 80 percent or below AMI.

Boulder’s inclusionary housing ordinance requires 25 percent of units in a new development be reserved for affordable housing. The city of Boulder goes further in these specifications to ensure that of the affordable units, 80 percent are for low-and moderate-income, and 20 percent are for middle-income households.

Implementing Linkage Fees

Overview and Description

Linkage (or impact) fees “link” new market-rate production to increasing affordability by assessing a set fee on new market-rate development that the local government will collect and then often invest in more affordable production or preservation, or homelessness services. Fees may vary by whether development is residential or commercial, use, project size, and market, among other considerations, and ideally strike a balance between driving meaningful investment into affordable homes and not disincentivizing development overall. Linkage fees can serve as a policy step toward or an alternative to inclusionary housing programs that mandate some percentage of affordable units be included in new market-rate production.

Opportunity and Examples from Colorado

Denver: In passing its inclusionary housing ordinance, Denver also revised and increased existing linkage fees to asses fees on all development (residential and commercial) that is not subject to the inclusionary housing requirements.

Boulder: The City implemented a commercial linkage fee, directing revenue to its affordable housing fund, and has more recently increased the fee every two years.

Permitting Accessory Dwelling Units

Overview and Description

Accessory Dwelling Units (ADUs) are smaller units attached to or located alongside larger units. ADUs include tiny homes, garage units, and basement units, among others. ADUs can increase the stock of affordable housing and benefit homeowners with additional income. Local elected officials who are updating land use policies can include permissive zoning for ADUs, provide permits, reduce restrictions of this type of housing, and commit public funds to support lower-income households in building ADUs and realizing their benefits.

Opportunity and Examples from Colorado

Summit County allows ADUs, with the requirement that ADUs are rented to members part of the County’s workforce. Building permits are provided by the Summit County Planning Department for ADU.

The City of Boulder is currently discussing an ordinance to remove restrictions on the number of ADUs permitted in an area. Removing this rule will create more opportunities for ADUs and provide more affordable housing options for Boulder residents.

The City of Durango has recently made changes to zoning laws and reduced ADU restrictions. Additionally, Durango has implemented a new program organized by the Community Development Department to incentivize and encourage greater development and use of ADUs in the City.

Streamlining and Fast-Tracking Processes

Overview and Description

Local elected officials can streamline and fast track the approval process for affordable housing development. While updating and creating land use policies that support affordable housing development within a community, identifying practices that further development in a timely manner can reduce regulatory barriers and the lengthy process of development. For instance, by-right development can facilitate the supply of affordable units by enabling development of certain types of housing (e.g. higher density, certain levels of affordability, accessory dwelling units) according to a standardized, consistent zoning code. Such streamlining of approvals for certain types of housing benefit both developers and communities who can more quickly realize the positive effects of increased affordable housing supply and options.

Opportunity and Examples from Colorado

Fort Collins: Affordable housing projects are eligible to receive an expedited development review and permitting process.

Denver: With City Council leadership, multiple neighborhoods across Denver can now develop accessory dwelling units without going through an approval process.