On September 27, 2023, the Planning Commission discussed several suggestions for code amendments meant to incentivize affordable and alternative housing developments. The suggestions, or strategies, were a result of the Housing Needs Assessment, led by the Town of Nederland and third-party consulting firm Bohannan Huston Inc. (BHI).

On August 30, 2023, Commissioners reviewed the results of the assessment and a subcommittee was formed to narrow the original seven strategies down to four and from those four strategies devise code changes.

Mayor Pro Tem and Board of Trustees (BOT) liaison to the Planning Commission Tom Mahowald and Vice Chair Jim Reis volunteered for the subcommittee that would work alongside Town staff and BHI. The subcommittee is expected to finish the proposed code changes and associated draft language in time for the BOT to vote in November, in order for the code changes to be implemented by January 1, 2024.

The four strategies include allowing small square footage residential units and smaller square footage lot sizes, developing flexibility in land occupancy requirements, increasing Town support and clarifying procedures for the development of affordable and diverse housing options, and identifying opportunities to expedite the development review process for affordable housing development.

From those four strategies the subcommittee decided on the following four potential code changes:

First, allowing for the development of accessory dwelling units (ADUs) before the primary structure is constructed. If this were to be permitted, developers would be allowed to live in the ADU, which, in certain scenarios, would provide them financial security during construction.

The subcommittee also suggested that, if the property in question is large enough, more than one ADU can be constructed on that property.

The second proposed code change would be to institute an administrative variance for up to a 15% deviation for all yard and bulk requirements, except for height. An administrative variance would remove the variance process with the Board of Zoning Adjustment (BZA) that is currently necessary for development concerns on non-conforming lots.

The agenda information memorandum (AIM) developed by Town staff detailing these code changes described the BZA variance process as “arduous.”

Third, developing a new residential-use specific Use Group Table that lists all the alternative housing types and in what zones they would be allowed either use-by-right or special review use (SRU). Alternative housing was specified as duplex, triplex, fourplex, courtyard apartment, townhouse, small housing unit, micro housing unit, tiny housing unit, and live/work housing unit. NMC currently lists, under Residential Use, only multi-family units of up to four units and over are allowed.

The last proposed code change was to allow for up to a 50% yard and bulk variance for deed-restricted affordable housing. Town staff recommended drafting code language to specify that a developer of a deed-restricted affordable housing unit can seek up to a 50% variation after discussing the yard and bulk variations specifics with the Town’s Community Planner.

Town staff noted in the AIM that, rather than provide a use table showing the 50% variance, they want developers to apply for the minimum relief possible as opposed to automatically defaulting to the full 50% variance.

Nederland’s Community Planner Britt DeMinck intended to lead the Planning Commission through each of the recommended code changes in order to receive their feedback to present to the BOT when the matter comes to their agenda for discussion.

Commissioner Michael Dye felt that the subcommittee should avoid using the word “affordable,” as he believed it did not apply to the type of market rate housing that the Town and BHI are focusing on for future development.

BHI Senior Planner Derrick Webb was present on September 27 and explained how the focus from the Housing Needs Assessment has been on increasing Nederland’s housing stock, which Webb expects should lower rental costs. This intention comes as Webb’s answer to why the subcommittee’s suggestion is to create housing for 100% area median income (AMI) earners whose average income is $100,400 for a two-person household.

Mahowald stated that he was not comfortable with a lot of the proposed code changes, and wanted to instead focus on another of the Town’s housing initiatives: Proposition 123, which the BOT committed to during their meeting on September 5.

Proposition 123 is the program that controls the State Affordable Housing Fund and provides municipalities with access to funding for affordable housing projects. The Town committed to a baseline goal of creating seven affordable housing units by November, 2026, though a definition for “affordable housing unit” was not provided.

Along with this committed goal, the Town is also committed to completing the prerequisites for the Housing Planning Program Grant in order to be eligible for the Housing Development Incentive Grant Program, which would also provide Nederland with access to funding for affordable housing projects.

These prerequisites include the completion of the Housing Needs Assessment and to make significant changes to zoning code in regards to promoting affordable and/or alternative housing. The Town has until January, 2024, to complete these prerequisites.

Commissioner Roger Cornell noted that each of the four proposed code changes could be its own separate discussion and action item, and expressed frustration with the timeline imposed upon the Commission.

“The idea to take this housing study and to put this demand on the Town, the community, and the individual residents and to try and say there’s a deadline and at the next month’s meeting we need to make a motion to approve, I for one feel that’s appalling and I totally disagree with the process,” Cornell said.

“When we’ve done STRs and ADUs it’s taken hours and hours of discussions and reporting,” Cornell continued. “I realize what we’re trying to do and certainly understand the issues of trying to get workforce housing – we’re all feeling that crunch – but the timeline here I find very untenable.”

DeMinck responded in defense of the provided timeline, reiterating how the Housing Needs Assessment was approved and in effect before the start of 2023.

“Last meeting we brought these strategies to your attention and it felt like it was slightly pushed off to the side, that there were more important topics,” DeMinck said. “We’re pushing other subjects that we find to be such an emergency, but housing is a big opportunity. It is a short timeline but this has been going on for this entire year.”

“Some of these are very drastic to see but some of these are very simple changes,” DeMinck remarked, in reference to the code changes, before listing how she and Town staff had been committed to community engagement regarding this topic.

The Planning Commission, after discussing each of the four possible code changes, came to an agreement on just two of them: allowing for the development of ADUs before the primary structure is constructed, and giving Town staff the power to institute an administrative variance for up to a 15% deviation for all yard and bulk requirements.

Commissioners suggested to Town staff to remove from the draft code changes the requirement that the ADU must be occupied by the owner of the primary residence being constructed. As for the administration variance, it was specified that the variance process will be based on set criteria and standards of the BZA, and that the BZA would act as the enforcing agency if the variance application is found to be too controversial for Town staff.

The discussion of developing a new Use Group Table that lists all the alternative housing types was too vast for one meeting and the Planning Commission deferred the matter to the BOT when the proposed code changes come to their agenda.

The discussion concerning the proposal to allow for up to a 50% yard and bulk variance for deed-restricted affordable housing came to an impasse as Commissioners could not agree on defining “affordable housing development” as only requiring 10% of the development’s units to be truly affordable, as dictated by the state.

Commissioners generally felt that developers only needing to require 10% true affordability was too low of an ask considering the developer can receive up to a 50% variance. Raising the requirement on developers to 30% was suggested, and the Planning Commission also discussed the possibility of decreasing the income suggestion for housing from 100% AMI to 80%.

Webb warned that constructing housing for 80% AMI earners is not practical for developers due to the cost and demand of materials.

“Given all the lumber that’s being diverted down to the Front Range right now, and the workers and everything else, we can say something but if it can’t be done then we’re shouting in the woods,” Mahowald said.

“We need to do something that’s borderline achievable, even a reach, or we’re going to be totally stuck.”

Town staff will be adapting the commissioners’ concerns and feedback into a new draft of code language that the BOT will review during a future meeting. The Planning Commission will see the proposals for draft language again during their meeting next month, scheduled for Wednesday, October 25, 2023, at 7 p.m.