Council may be stealing economic opportunity

If you are like a lot of people, your eyes may start to glaze over at the mere mention of “Opportunity Zones,” but stick with me as there is a fascinating story of apparent desperation, questionable motives, and possibly deceitful tactics in order to stem any growth in Boulder.

What are Opportunity Zones anyway?

Opportunity Zones were created by the 2017 federal tax reform package, the Tax Cuts and Jobs Act, as a way to incentivize investors to improve and revitalize communities across the country that have languished while the rest of the US enjoyed a terrific boom.  Specifically, an Opportunity Zone is a census tract that Congress designated as eligible (read struggling) to receive private capital investments through “Opportunity Funds,” which allow investors to receive a deferral, reduction, or possibly even elimination of federal capital gains taxes, depending on how long they keep their money invested in a qualifying property and how much they improve it.

So what?

This is where the story gets interesting.  Gov. Hickenlooper, seemingly with support from Boulder at the time, designated a Boulder census tract that runs from 28th to 55th Streets and from Iris to Arapahoe Avenue as an Opportunity Zone.  While virtually every other municipality welcomed these designations as an opportunity to revitalize their struggling communities, the Boulder City Council placed a moratorium on its Opportunity Zone, blocking investment.  And did I mention that this is a limited time offer?

If you are new to the area or have not been following local politics closely (and who could blame you?), it might seem surprising that Boulder would block such investments.  However, as discussed in a previous column, a majority of the Boulder City Council appears to be beholden to Boulder’s CAVE people (Citizens Against Virtually Everything) who do not want growth of any kind.  It seems they want things to be like it was “back then,” an apparently bygone era with fewer people, fewer businesses, etc.  When viewed through this lens, their actions, though by definition counter productive, make sense.

And now for the master stroke of the CAVE people: make it look to the public like they are lifting the moratorium, when they are actually downzoning large parts of the city.  Under the guise of lifting the Opportunity Zone moratorium and updating “use table standards,” the city will effectively downzone thousands of properties (not just in the Opportunity Zone), limiting office uses to 25 percent of floor area in the BR, BMS, and TB business zones, and limiting small office uses in residential zones.  This will make any existing building in an affected business zone with more than 25 percent office space a “non-conforming use,” meaning that changes or expansions to this use would require city approval through a non-conforming use review.  And what do you think the chances of getting approved would be?

This proposal by the city council runs counter to its stated positions on the environment, not to mention its own Boulder Valley Comprehensive Plan policies supporting creation of 15-minute walkable neighborhoods and other policies favoring mixed-use planning, smart growth, and pedestrian uses.

If you are so inclined, you can share your opinion with the city council at council@bouldercolorado.gov, or if you are really motivated, you can attend the council’s public hearing at 6 p.m. on Sept. 3 at 1777 Broadway.

Originally posted by Jay Kalinski is broker/owner of Re/Max of Boulder.

Posted on September 4, 2019 at 3:00 pm
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The end may be here (but don’t panic)

At this time last year, our market was experiencing all-time highs for average home prices and all-time lows for housing inventory.  Many of the market indicators we track were pointing to continued strong demand and price appreciation, especially with the continued influx of people into Boulder and Broomfield counties.  And yet, with home price appreciation outstripping wage gains for the better part of a decade, in the back of everyone’s minds was the question: “How long can this go on?”  We may now be starting to get our answer.

The big picture

In 2018 last summer, the Federal Housing Finance Agency measured the average appreciation nationally at 6.89 percent which slowed this year to 5.05 percent.  Then, FHFA ranked Colorado as having the fourth-highest one-year appreciation in the country, at 10.63 percent.  Boulder County ranked 68th among metropolitan areas in the country with 8.25 percent appreciation.  This year, Colorado has dropped to 28th, with 4.78 percent appreciation, while Boulder fell to number 91 with 6.14 percent appreciation  So, Colorado and Boulder County are cooling compared to the rest of the country, but, as a bright spot, Boulder County’s appreciation since 1991 still leads the entire nation at 417.28 percent.

There are 10 statistics we track to gauge the state of the residential real estate market, and studying the movement of these indicators can give you a good sense of the direction of the market.  For most of this decade, those indicators have generally pointed toward a rising market, marked by tight inventory, brisk appreciation, quick sales, and low months of inventory (the time it would take to sell all existing homes if no new homes entered the market).  At the close of the second quarter of 2019, we are seeing a strong shift for both the single-family homes and attached dwellings (see charts).

As you can see, nearly every indicator we track is pointing to a softening, shifting market, aside from interest rates.  And while Months of Inventory still indicates a seller’s market, the trajectory is moving toward a balanced market (between five and seven months of inventory).

And now for the good news

If you are an aspiring buyer in Boulder County, your timing is excellent: inventory is up, so you have more homes to choose from; prices are flat or falling, so you may be able to get a (relative) bargain; and interest rates have dropped once again, so you can get more house for the money.

If you are a homeowner or thinking of selling, the news is not all bad: you’ve rode an impressive wave of appreciation for the better part of a decade; and even when Boulder’s market stalls, it typically does not lose much value (even in the great recession, home prices only dropped about 5 percent).

Remember, don’t panic.  Boulder is still the best place in the country to invest in real estate.

Originally posted by Jay Kalinski is broker/owner of Re/Max of Boulder.

Posted on August 1, 2019 at 1:00 pm
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Where have all the buyers gone?

well-functioning market consists of two sides: suppliers who offer a particular good for sale and consumers who purchase those goods.  In the Boulder Valley residential real estate market since 2012, there have been more consumers looking to buy homes than there were sellers offering homes for sale, which has led to a long appreciation period for homes.  Now, however, it appears that the number of buyers is dropping as is their willingness to pay ever-increasing prices.

Spotting the trend

First, how do we know that there are fewer buyers in the market?  The most direct measure of buyer activity that my company tracks (courtesy of Broker Associate Mike Malec) is the number of showings per available listing.  From examining the data, it is fairly easy to see that this year’s showing activity is markedly below the recent boom years, but is still above the levels present during the recession.

Second, to further substantiate this decline in buyer activity, we can look at more indirect measures, such as average sales prices, available inventory of homes on the market, and average time a home will be on the market before sale.  Each of these markers indicates a decline in buyer activity.  Through May of this year, the average price of a single-family home in Boulder has fallen 0.6 percent, while the average attached unit has fallen 4 percent, compared to the same timeframe last year.  This indicates that there are fewer buyers competing for available homes to the point where home appreciation rates have stalled.  At the same time, the amount of homes available on the market has increased nearly 20 percent for single-family homes and almost 50 percent for attached ones, while the average time on the market for single family homes has gone up 5 percent and nearly 20 percent for attached ones.  These statistics indicate that those buyers in the market are becoming choosier and are able to take their time making decisions.

Based on the above discussion, it seems that there are fewer buyers in the market and that those who are in the market are more cautious, but why? 

Economic Conditions?

It does not appear that our local economic conditions explain the drop in buyer activity.  According to the State Demographer’s office, people are continuing to move into Boulder and Broomfield counties, albeit at a slower rate than previous years (though the city of Boulder has seen its population declining in the last two years).  And local unemployment levels continue to be historically low. 

Economic conditions at the national level are softening, to the point where the Fed is discussing interest rate cuts, so these conditions may play some role.  But, interest rates are actually about half a percent lower than they were at this time last year, which would appear to weaken that argument.

Could it be the weather?

Another possible explanation I’ve heard is that our unusually cold and snow winter could have suppressed buyer demand as people were less willing to trudge through the snow to go see houses.  While this is plausible, all else being equal, we would have expected to see that pent up demand being released as the weather improves, but we just have not seen that play out in the data yet.

The takeaway

Whatever the cause of the decline in buyer activity may be, local real estate legend Larry Kendall of the Group Inc. Real Estate in Fort Collins always says that buyers are the smartest people in the market, so they may be acting as the proverbial canary in a coal mine, meaning that they could be a leading indicator that our market is shifting from a seller’s market to either a balanced or buyer’s market.  If you are a seller, be wary of pricing above the market in these shifting conditions.

Originally posted by Jay Kalinski is broker/owner of Re/Max of Boulder.

Posted on July 2, 2019 at 3:00 pm
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Re/Max of Boulder owner to launch new Louisville office

LOUISVILLE — Jay Kalinski, owner of Re/Max of Boulder, is opening a new real estate agency in Louisville under the Re/Max Elevate banner.

The Re/Max Elevate office, set to celebrate a grand opening May 1, is at 724 Main St.

Kalinski said agents had been clamoring for an office in eastern Boulder County because many live in that area and many have clients looking for homes in places such as Louisville, Lafayette, Firestone and Frederick.

“Over time, more and more of our agents have been working outside of the city of Boulder and outside of Boulder County,” Kalinski said,

And while the company considered opening the office in other nearby towns, “Louisville seemed to be a consensus choice,” he said.

The Re/Max Elevate office, technically a separate franchise from Re/Max of Boulder Inc., will launch with 15 agents. A handful are transferring from the Boulder offices, but most are newly recruited agents.

Kalinski said the office may be able to support as many 20 or 25 agents. For comparison, Re/Max of Boulder has about 115 agents.

Kalinski said the Louisville office will likely not be the last new location for his team.

“We’re in growth mode and looking to expand,” he said.

The decision on where to target for the company’s next office will — like the Louisville decision — be driven by input from agents and clients, he said.

Originally posted by Lucas High

Posted on April 26, 2019 at 10:00 pm
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City housing proposal may be Faustian bargain

There is a serious shortage of homes in Boulder, as is evidenced by the roughly 65,000 people who commute in and out of Boulder on a daily basis.  About half of these people would live in Boulder if they could, but are forced to “drive until they qualify” for a home, which increases their carbon footprint, commute times, and overall stress level.  It is clear that creative solutions are needed to address this crucial issue.

The Boulder City Council’s proposed pilot program to “help” middle income families purchase market rate homes is, while creative, a Faustian bargain, in my opinion.  In the current iteration supported by members of the city council, the city would use a “loan-loss reserve fund” to guaranty second mortgages that would allow people to purchase more home than they would qualify for by themselves.  (An earlier version from a 2016 white paper would have had the city use its bonding power to raise money to buy a percentage of a purchaser’s home, which the city would get back at closing, plus some amount of appreciation).

 

If the program stopped there, I would applaud the city’s effort for trying to get more families into homes that would be owner occupied.  But here is where the Faustian bargain sets in.  In exchange for the city’s assistance, the buyer would have to “voluntarily” agree to deed restrict the home they just purchased to be permanently affordable.

Let us consider the consequences of this for the individual or family who purchases a home under this program:

  1. All of the burdens. The buyers now have all of the burdens of homeownership.  For example, if the furnace breaks or the roof wears out, the burden falls on the homeowner to replace them.  If the home loses value, it is ostensibly the homeowner who bears the loss when they look to resell.  And remember, in this fantasy, a lender is going to agree to loan buyers more money than the lender thinks they can reasonably afford because the city is going to guaranty a portion of the loan, which means the buyers will likely have more financial strain and be at a higher risk of default.  Whether the city can sufficiently incentivize a bank to overlook that they would likely be overextending buyers financially remains to be seen.
  2. Limited rewards.  While the homeowner is saddled with the burdens and risks of ownership, they do not reap the full reward of their home’s appreciation — the city sees to this through its deed restriction.  Suppose homeowners do an outstanding job of upgrading and maintaining their home, and the market rises over the 10 years they own their home, the owners will not receive the fruits of their labor and good fortune of an appreciating market.  Instead, the city will cap their appreciation at some percentage likely well below the market. 

For the majority of Americans, their home is their biggest asset and primary source of wealth creation.  The effect of the city’s program, then, is to make families who avail themselves of this program poorer over time relative to those who purchased homes on the open market.

It is, in my opinion, this asymmetry of unlimited risk and handicapped reward underlying the program that makes it so insidious.

If this wasn’t bad enough, let us now consider the consequences of this for the housing market in Boulder in general.  The more unfortunate souls the city “helps” via this program, the fewer homes will be available on the open market.  If the supply of homes is further restricted via this program, and demand for housing remains strong (remember the 30,000 commuters who would like to live in Boulder?), then the result will be home prices rising even faster.  So, in an effort to create a number of “permanently affordable” homes, the city will make the rest of Boulder much more expensive. 

Originally posted on BizWest.  Jay Kalinski is broker/owner of Re/Max of Boulder.

Posted on March 5, 2019 at 3:00 pm
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Be mindful of warning signs in housing market

2018 was another strong year for residential real estate in Colorado in general and Boulder Valley in particular, but what’s in store for 2019?

First, a look back at 2018.  Nationally, Colorado jumped from 10th to fifth among all states for one-year appreciation, with a 9.16 percent increase in home values.  Boulder County improved from 57th in 2017 to 41st in 2018, with over 9.5 percent price appreciation.  Below are the 10 “Vital Statistics” for Boulder Valley we track to gauge the health of the real estate market from year to year.

As you can see, most of the indicators point toward an appreciating market, though increasing interest rates and a drop in the percentage of homes under contract indicate potential signs of weakness emerging. 

In the city of Boulder, the average price of a single-family home topped $1,215,000, which was up 11 percent from 2017.  However, Boulder also saw almost 50 fewer home sales than last year, which highlights our continued shortage of inventory.  The most affordable city in Boulder County continues to be Longmont, but even there, the average price of a single-family home is now over $460,000 and may reach $500,000 if its appreciation trend continues.

One statistic that gets very little attention is that we often see home prices dip slightly in the second half of the year as compared to the first.  As the chart below shows, we generally see appreciation through June or July, and then values trail off slightly.  What this chart means is that, if you’re a seller your best bet is to sell in the spring, and if you’re a buyer, try to buy in the fall when home prices are stagnant or dropping.

2018 was quite strong — will 2019 be similar?

Locally, conditions in our area generally support continued appreciation in residential real estate.  The total number of active listings available is still less than half of what it was before the Great Recession, which is likely to keep home prices growing, especially as our economy remains strong (very low unemployment) and we continue to see net migration into our area.

There are, however, several trends that could derail continued growth in our market.  First, interest rates are almost a full point higher than they were in 2017, and I’ve discussed before how a one point increase in interest rates can reduce purchasing power by 10 percent.  The Fed had indicated its intent to continue to raise rates in 2019, however, the news from the Fed’s most recent meeting in January suggested that they may hold off until at least June.

Second, the potential for a recession in the next year or two could begin dragging on home sales.  One indicator is that the yield curve (which compares rates for short-term vs. long-term Treasury notes) has been getting flatter.  When the yield curve inverts (that’s when rates for 10-year notes dip below rates for 2-year notes), it is very often followed by a recession.

Finally, local no-growth and anti-growth policies, regulations, and mindsets are making it increasingly difficult to add inventory to our region.  The dearth of homes to sell could negatively impact our market — and it is the only factor here that we as citizens have a measure of control over.

2019 has the potential to be another great year for residential real estate in Boulder Valley, but we need to be mindful of the potential derailers mentioned above.

 

Originally posted on BizWest.  Jay Kalinski is broker/owner of Re/Max of Boulder.

Posted on February 6, 2019 at 3:00 pm
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Real Estate Conference Set to Explore Boulder Valley Challenges and Trends

The eleventh annual Boulder Valley Real Estate Conference offers a packed day Thursday, November 15, exploring trends, commercial impacts, and inventory shortages in Boulder County commercial and residential real estate.

Organized by BizWest with presenting sponsor RE/MAX of Boulder, the event delivers an intensive schedule of national keynote speakers and panels made up of local real estate experts and development officials.

More than 500 real estate professionals and anyone interested in the local real estate market are expected to attend. Attendees get insights into residential and commercial real estate activity and coming opportunities in Boulder and Broomfield counties.

The conference kicks off with local real estate expert Todd Gullette, RE/MAX of Boulder Managing Broker, discussing the latest sales and price statistics and implications for residential real estate across Boulder Valley. The commercial forecast follows, with Angela Topel, Gibbons-White Senior Broker, exploring major commercial developments, sales and vacancy statistics.

Future technology – now turned present – takes center stage when Jay Kalinski, Broker/Owner of RE/MAX of Boulder, moderates a panel of real estate banking and technology experts, exploring “The Impact of Blockchain” on residential real estate. Blockchain technologies enable a shared, nationwide database of houses on the market. The panel will look at how Blockchain platforms affect Boulder County’s housing market and how Realtors should respond.

“Big Tech Settles In” focuses on the local impact of the tech economy and examines the surging Boulder tech scene, including expansions by Google, Twitter, Microsoft and Uber.

Conference keynote address presents the outlook of Wells Fargo’s EVP of Housing Policy and Homeownership Growth Strategies, Brad Blackwell, and MetroStudy’s Senior Director West Region, John Covert.

Next up, “Breaking Ground” – back by popular demand – reveals commercial and residential developments in the Boulder Valley and beyond. A panel of city-employed development directors from Lafayette, Longmont, Louisville, Superior, Boulder, Erie and Broomfield provide a complete rundown of the region’s top projects.

“Wrestling with Supply” tackles the top challenge for Boulder-area residential real estate markets. Lack of housing inventory, issues with infill development, height limits, accessory-dwelling units and zoning conspire to cause a critical housing shortage. Moderated by Duane Duggan, RE/MAX of Boulder Realtor, the panel will discuss policy changes developers believe would address the problem.

“Icons of Real Estate” is back by popular demand. Featuring long-time successful real estate experts Tom Kalinski, Owner/Founder, RE/MAX of Boulder; Stephanie Iannone, Managing Broker, Housing Helpers; and Seth Chernoff, CEO, Chernoff Boulder Properties, audience members will ask questions to learn proven best practices and advice for success in commercial real estate.

The conference will be held from 9:00 am to 4:00 pm on Thursday, Nov. 15 at the Embassy Suites hotel, 2601 Canyon Blvd. in Boulder. Registration opens at 8:15 am. For details and to pre-register visit http://fallrealestateconference.com. Breakfast and lunch are included. The conference is open to anyone with an interest in Boulder Valley real estate. Conference attendees can earn six Van Education credits.

Conference details in this quick video: https://bit.ly/2PAsWQV

 

Originally posted here by Tom Kalinski Founder RE/MAX of Boulder on Tuesday, November 13th, 2018 at 3:40pm.

Posted on November 14, 2018 at 10:33 pm
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The importance of property rights and good governance

The Boulder City Council’s recent handling of their attempted “emergency” vote to limit “McMansions” provides an excellent opportunity to step back and consider the importance of property rights and principles of good governance.

Why do we as a society care about property rights?

Primarily, we care about property rights because they are inextricably linked to increasing our collective prosperity.  “On average, GDP per capita, measured in

Blue and Gray Concrete House With Attic during Twilightterms of purchasing power parity, is twice as high in nations with the strongest protection of property than in those providing only fairly good protection,” according to a study of property rights published by the Heritage Foundation.  The reason this is so is because people are more willing to improve their property to its highest and best use when they know their rights are protected.

Conversely, when people do not feel secure in their property rights, when they feel the government can change or remove their rights without due process and fairness, people are not as willing to make improvements to their property and collective prosperity falls.

Good governance

From the above, we see that good governance is critical to protecting property rights and improving collective prosperity, but what is good governance made of?  According to the United Nations, the characteristics of good governance include participation, rule of law, transparency, responsiveness, and accountability, among others. Standing in opposition to good governance are arbitrariness and capriciousness.

Let’s look at the definitions of these words and consider which terms most aptly describe the City Council’s recent actions.

Arbitrary:

• Definition:  based on random choice or personal whim, rather than any reason or system; (of power or a ruling body) unrestrained and autocratic in the use of authority.

• The term arbitrary describes a course of action or a decision that is not based on reason or judgment but on personal will or discretion without regard to rules or standards. An arbitrary decision is one made without regard for the facts and circumstances presented, and it connotes a disregard of the evidence.

• Antonym: democratic

Capricious:

• Definition: given to sudden and unaccountable changes of mood or behavior; unpredictable and subject to whim.

• Antonym: consistent

A summary of the facts

On Oct. 15, Councilwoman Lisa Morzel requested that the council consider the following day an “emergency” temporary ordinance to stop the city from processing permits for homes over 3,500 square feet on lots 10,000 square feet or larger (clearly, a “McMansion” is much smaller than an actual mansion).  At the time, Morzel declined to articulate the cause of the emergency; nevertheless, the council added it to their agenda for the following day.  On Oct. 16, the City Council considered the motion and heard from 22 people, almost all of whom spoke in opposition to the motion.  Apparently because Councilwoman Cindy Carlisle was absent and an emergency motion requires a two-thirds majority to pass, council declined to vote on the measure, but noted that the issue may be considered again in December.

Evaluating the City Council’s actions

It does not appear to me that the above actions were consistent with the good governance principles.  One day’s notice did not allow all interested stakeholders to participate, lacked transparency because no reason for emergency action was articulated, and appears to have been taken in an attempt to avoid accountability.

Instead, the City Council’s apparent ambush-style attack on property rights appears to meet the very definitions of arbitrary and capricious — two terms that most governing bodies would not seek to embody.  First, rather than having an articulated reason that the issue of “McMansions” is suddenly an emergency, the decision to consider the issue on one-day’s notice appears to be based on a “personal whim, rather than any reason,” perhaps better explained by a “sudden and unaccountable change of mood.” Second, applying the moratorium only to homes over 3,500 square feet on lots 10,000 square feet or larger seems arbitrary (disregarding the facts and circumstances) when one considers that a person owning a 9,999 square foot lot could still build a 4,100 square foot home.

An appeal for good governance

Reducing the potential value of people’s property (likely their most valuable asset) is a serious diminution of their rights, and while the City Council likely has the authority to do so, such action should only be taken, if at all, after a process conducted in accordance with the principles of good governance.

 

Originally posted on BizWest. Jay Kalinski is broker/owner of Re/Max of Boulder.

Posted on October 31, 2018 at 3:00 pm
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Proposition 110 better serves Boulder Valley

Since Boulder’s anti-growth sentiments seem not to be going anywhere anytime soon, the condition of our roadways has become increasingly important to our economy in general and to commuters in particular.  The worse the condition of our roads, the longer commutes take and the more money commuters have to spend on auto maintenance — and the less attractive Boulder Valley becomes to workers (and employers). If you have spent any time traveling around Boulder and Broomfield counties, you know our roads are in a sad state of disrepair.  As much as I cast a skeptical eye at many of the proposed tax increases we are asked to consider, something must be done to fix our roads and support the continued vitality of our region.

There are two transportation funding propositions on the ballot this fall, and one of them — Let’s Go, Colorado (Proposition 110) — deserves your vote.

If Proposition 110 passes, there would be a 0.62 percent sales tax over 20 years to provide money for both state and local transportation priorities.  Projected revenue from the tax is $767 million for the first year, and while that sounds like a lot of money, it pales in comparison to the $9 billion transportation funding shortfall that we are facing.

If you have lived in Boulder for a considerable time, you may well remember with consternation how we were taxed with the promise of light rail connections from Boulder Valley to Denver, only to see that money spent on building out the South Metro area’s light rail system, while we were left with nothing.  You would be forgiven for responding with an expletive the first time you heard about these new funding proposals.  However, since the light rail tax debacle, a new advocate — Commuting Solutions — has risen to champion transportation causes in our area and has worked in this case to ensure that money will be allocated to address our most important needs.  In fact, if Proposition 110 passes, Commuting Solutions (and its coalition partners) has ensured that our key local needs are included on the CDOT approved project list, with up to $915 million for the following projects:

• Colorado Highway 119 (Boulder – Longmont)

• Colorado Highway 7 (Boulder – Brighton)

• U.S. 287; Colorado Highway 66 (Longmont – Broomfield)

• 28th Street/Broadway (Boulder)

• Colorado Highway 95/Sheridan (Westminster)

• Colorado Highway 7/I-25 Interchange (Broomfield/Adams)

While I understand and appreciate the sentiment behind “Fix Our Dam Roads” (Proposition 109), our local needs are not guaranteed to be addressed and this $3.5 billion bond measure is not paid for; that is, the legislature would likely be forced to cut the state budget in other areas, causing trade-offs that many citizens might not want to make.

Our roads are in a dire state, which will negatively affect our economy, housing values, and quality of life, if not addressed. I support Let’s Go, Colorado (Proposition 110) because the time has come to repair our roads and Commuting Solutions and its partners have succeeded in ensuring that money will be allocated to projects critical to Boulder Valley if it passes.

Jay Kalinski is broker/owner of Re/Max of Boulder.

Originally posted by BizWest on Wednesday, June 1st, 2018. Original found here.

Posted on October 18, 2018 at 3:29 pm
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The danger of Boulder’s CAVE people thinking

Let’s face it, what happens in Boulder affects the rest of Boulder Valley in terms of housing, transportation, economics and myriad other dimensions.  If you want to know where your neighborhood is headed, it’s informative to know what Boulder is doing, even if you live in say, Erie.  And, if you even casually follow Boulder politics these days, you might be perplexed and concerned by the (seemingly) increasingly bizarre actions coming from Boulder’s City Council.

For a council that purports to support the environment, public safety, and inclusivity, its recent actions don’t seem to match its rhetoric.  In my opinion, however, its actions make sense when you understand the true underlying motivations and desires — and to do that, you have to understand Boulder’s CAVE people.

Who are Boulder’s CAVE people and what do they want?

Simply put, I call these people “Citizens Against Virtually Everything” (CAVE), and they seem to have the ear of the majority of the current council.  It appears that the plurality of Boulder’s CAVE people arrived in Boulder in the 1960s and ‘70s as students, hippies, ski bums, etc.  They decided to stay, bought homes here, and have become relatively well off as Boulder’s home price appreciation outstripped virtually everywhere else in the country.  At the same time, they seem not to like the multiple dimensions of growth Boulder has enjoyed over the last several decades; indeed, their strongest desire is apparently to see Boulder return to as it was “back then,” with fewer people, fewer businesses, less crowding, etc.  Their apparent goals, then, are to slow, stop, or reverse growth of all kinds in Boulder.  Their tactics appear to be to (disingenuously?) cloak themselves in the rhetoric of environmentalism, populism, and liberalism in order to achieve these goals.

Recent examples of CAVE people tactics and their effects:

1. South Boulder Flood Mitigation Plan.  The 2013 flood brought the issue of flood mitigation to the front of everyone’s minds in Boulder Valley, but the study of how to best deal with this issue in South Boulder goes back well before then.  After nearly a decade of study, and more than $2 million in fees and environmental studies, and extensive public engagement, the City Council had a few feasible flood mitigation plans, one of which (500-Year Variant 2), had the support of the University of Colorado (the property owner), the city’s Water Resources Advisory Board, and general public.  One would think, then, that it would be an easy decision for the City Council to support.  One, however, would be wrong.

Recently, the Boulder City Council voted to proceed with a different flood mitigation plan, one that is opposed by CU, disregards expert testimony, the preferences of the city’s Water Resources Advisory Board, and general public sentiment. 

Why would the council disregard science, experts, reason, common sense and nearby residents?  Using the lens of CAVE people logic, it may be because they believe that taking a position in opposition to all of these things will greatly slow the process of CU developing that land, which fits the goals of “slow, stop, reverse.”

2. Sales Tax Revenue. Cities like Boulder depend on sales tax revenue as an important component of their budgets.  Earlier this year, Boulder reported a $4 million budget shortfall, attributable primarily to flattening sales tax in the city — at a time when nearby cities are enjoying double digit growth in their sales tax revenues.  Members of the City Council held a study session on the topic on July 10 in which some members declared that they apparently want fewer visitors to Boulder (both tourists and locals from neighboring cities).  They expressed these opinions even with the knowledge that locals already visit downtown Boulder an average of seven times per month, but tourists spend several times what locals do per visit.

Why, in a city that prides itself on being welcoming and at a time when sales tax revenues are falling, would members of council declare an apparent desire for fewer tourist (and accompanying tax dollars)?

3.  Increased housing density. Council members often voice their support for efforts to provide inclusive housing, reduce Boulder’s carbon footprint, and improve our city’s environmental sustainability; however, when it comes to increased density — the thing that would arguably go the farthest toward achieving those aspirations — the council’s words do not match their deeds.  Boulder’s draconian housing restrictions, including the 1 percent cap on annual residential growth (which we’ve never actually hit), blanket height restrictions, severe occupancy limits, among other measures, has forced our workforce to largely live outside the city.  This, in turn, causes the more than 60,000 daily commutes into and out of Boulder. By simply ameliorating some of these harsh policies, and allowing a modicum of sustainable and smart development, Boulder could include more of its workforce within city limits and could considerably lessen its environmental impact.

Why, then, has the city actively resisted efforts that would address these critical housing and environmental issues?  One possibility — CAVE people logic: if it is extremely difficult to add housing density, not only will it slow population growth, it will force workers into longer commutes and growing frustration.  Over time, businesses will relocate to areas more accessible to their workforce, and there will be fewer people, fewer jobs, less congestion… like it was “back then.”

What’s to come?

Rather than building a bridge to the future, Boulder’s CAVE people seem intent on digging a trench to the past.  In fact, their efforts seem to be achieving results — not only did Boulder run a budget deficit, but its population actually decreased between 2016 and 2017.  There is no stasis for cities — they are either growing or dying.  It seems the CAVE people are succeeding at pushing their agenda of “slow, stop, reverse,” through council.  And if they win, all of us who are truly for the environment, public safety, and inclusivity will lose.

 

Jay Kalinski is broker/owner of Re/Max of Boulder.

Originally posted by BizWest on Wednesday, June 1st, 2018. Original found here.

Posted on September 2, 2018 at 6:11 pm
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