How FARs is too FARs?

In your opinion, what has been more overplayed —  that annoying “Hey Soul Sister” song on KBCO or our city’s pop and scrape issue?  Well, I hope you answered “Hey Soul Sister” because this post is about pop and scrapes or FARs (floor area ratio limits) from here on out.  I hope you didn’t click on that link.  Good luck getting it out of your head.

In all seriousness, despite the fact that floor area ratio limit regulations have been discussed and argued ad naseum, FARs remains a monster issue.  To most, the regulations are a minefield that is difficult to navigate and even more difficult to understand.  Others are simply unaware of FARs’ far reaching implications and won’t be, until they try to add that extra bedroom to accommodate a new baby in their Martin Acres home.  Then, there are those that understand these provisions, approve of them and their desired purpose, and just wish they didn’t have to hear about this anymore.  I apologize to those last folks, but I can’t have a blog, discussing Boulder real estate in the Daily Camera, and not touch on FARs.  So here it is; I’m going to knock it out with my first post.  I have researched quite a bit about this blog topic, and both proponents and opponents of Boulder’s FARs regulations present some extremely compelling arguments.   At this point, I don’t think I can really say either side is totally and unequivocally correct.

Floor area ratio limits are not unique to Boulder; this is a national issue that has already affected many communities across the country.  A variety of plans have been put into practice with various levels of success and failure.  In fact, Winters & Co. studied the effect of implementation of these laws, and relied heavily on the results of their study, when stating in their memo to the city planning council that property values in Boulder would not decrease because of FARs ordinances.  See here for more information about the study’s results.   Also see City of Boulder: Compatible Development in Single-Family Neighborhoods.

While opponents of FARs ordinances are largely concerned about the regulations’ potential to destroy property value, the above referenced study by Winters & Co. brings forth compelling data to support the contrary.  It is very hard to argue with this type of concrete data.  It seems to be the only tangible way to measure the effect of such ordinances.   However, data suggesting FARs ordinances haven’t caused a decrease in property values in other places isn’t wholly indicative of the affect FARs ordinances will have in Boulder.  The real estate market in cities used in the study may not be truly comparable to Boulder’s market.    For example, Alexandria, Virginia, a place used to support the idea that property values don’t decrease due to FARs regulations, passed their floor area ratio ordinances in 1951.  Also, the majority of towns studied are suburban area markets, which don’t compare to Boulder’s real estate market.  The place studied that seems to parallel our fine city the most is Austin, but you are dealing with a city that is much larger than Boulder.   And, unlike Boulder, Austin is surrounded by suburban towns.   If they can’t build a big enough house in Austin, people will build their mansions in the suburbs: Round Rock, Pflugerville, or Horseshoe Bay.  The truth is that none of the cities studied compare well to Boulder’s truly unique real estate market.  So, while the data in the study above is no doubt convincing and should certainly be considered, it should not be taken as a guarantee that similar ordinances in Boulder will arrive at the same result.

The Newlands neighborhood in North Boulder is the epicenter of the local FARs debate.  Opponents of FARS ordinances are quick to point out that the property values of Newlands bungalows have decreased from 2007 to 2009. This fact is not in dispute, and it provides a strong argument against FARs regulations.  However, it is basically impossible to determine whether the decrease in property values is due to FARs ordinances or a slumping economy.  The truth is both factors likely contributed to the decline in property value.  Only time will tell whether FARs will negatively affect Boulder’s property values across the board, but, if there is a negative impact, the FARs issue is only going to get bigger.

If someone could measure a quantitative decrease in the value of a Boulder home as a direct result of the new ordinances, there would be a lawsuit.  In that situation, it could be reasonable to argue that what occurred was a “taking” of property by the city, requiring just compensation for affected property owners.   As an attorney, this aspect is very interesting to me, and I expect to see this eventually played out in a court of law.

Opponents of FARs ordinances are quick to point out that none of the city council members who voted to enact these ordinances owns a home that would now be in compliance.  This is very difficult to reconcile.  Even from an objective viewpoint, it is pretty hard to fathom a thought process that would make our City Council believe homes outside of FARs limits are okay for them, but not for others.  On the website http://www.leavemyhomealone.org/, you can learn the size of three council members’ houses and even see some pictures.  I’m not going to lie; I have a tough time with this.  On the face of it, there appears to be a rather large conflict of interest, particularly if the prices of our city’s mansions go up because you can’t build them anymore.  However, it is important to remember that this isn’t about the Council members specific situations, they should vote for what they believe is best for the city.  I’m choosing to believe that they have done so, otherwise I’d go insane.

Even opponents of FARs will concede that they don’t want their neighbors to throw up a massive, view-blocking wall right outside their bedroom window.  Herein lies the problem; most of this town thinks that these ordinances are only designed to curtail this intrusive type of building.  Whether that is true or not remains to be seen, but some homeowners have already changed their position on the regulations.  To give a recent example, a Walnut client decided he no longer supported the regulations, after he realized they prohibited a one-bedroom addition to his home.  It was something he and his wife had planned for years, but they simply didn’t realize that FARs extends beyond the “McMansions” in Newlands.  Whether other citizens of Boulder will be similarly affected remains to be seen and will ultimately be the deciding factor in whether FARs regulations will remain intact as they are now.

My goal in this post was to remain objective, but one thing about this mess really stands out to me.  These regulations were approved by the City Council, without the vote of the citizens of Boulder.  The argument that the technical aspects of these rules create too much of a burden for voters is somewhat insulting (particularly in a town that has been labeled the smartest city in the United States).  Our city council imposed ordinances that will affect the single largest investment many people will ever make in their life.  It stands to reason that the will of the people should have been the deciding factor here.  I can almost promise you that we won’t hear the end of the FARs debate, until the people of Boulder have spoken on the issue.  Surely one of the smartest cities in the United States can get this thing right.