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.
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 email@example.com, 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.
More than 40 percent of homeowners in Boulder County are equity rich – that is the amount of loans secured by the property is 50 percent or less of the property’s estimated market value, according to ATTOM Data Solutions Q3 2018 U.S. Home Equity & Underwater Report.
Cities in Boulder County notch the upper end of the equity rich measure. Here are the statistics for Boulder County. Percentages within cities vary slightly by zip code:
Boulder – 55% equity rich
Louisville – 46% equity rich
Lafayette – 42% equity rich
Longmont – 41% equity rich
Statewide, Colorado homeowners aren’t far behind with more than 32 percent of Colorado properties equity rich.
Across the U.S., nearly 14.5 million properties are equity rich. That’s 25.7 percent of all mortgaged properties, up from 24.9 percent the previous quarter. Conversely, the share of seriously underwater properties dropped to 8.8 percent. ATTOM says properties categorized as seriously underwater have a combined estimated balance of loans at least 25 percent higher than the property’s estimated market value.
States with the highest share of equity rich properties are California, 42.5 percent; Hawaii, 39.4 percent; Washington, 35.3 percent; New York, 34.9 percent and Oregon, 33.6 percent. Colorado is close on Oregon’s heels with 32.3 percent equity rich properties.
“As homeowners stay put longer, they continue to build more equity in their homes despite the recent slowing in rates of home price appreciation,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. “West coast markets along with New York have the highest share of equity rich homeowners while markets in the Mississippi Valley and Rust Belt continue to have stubbornly high rates of seriously underwater homeowners when it comes to home equity.”
The ATTOM Data Solutions U.S. Home Equity & Underwater report provides counts of properties based on several categories of equity at the state, metro, county and zip code level, along with the percentage of total properties with a mortgage that each equity category represents.
For the full report and to view statistics by zip code, visit: https://www.attomdata.com/news/market-trends/home-sales-prices/home-equity-underwater-report-q3-2018/
Posted by Tom Kalinski Founder RE/MAX of Boulder on Wednesday, February 20th, 2019 at 2:54pm.
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.
Nine Colorado cities rank in the top 50 best cities for first-time home buyers, according to recent analysis by WalletHub, a personal finance website. Four of those made the top 20 – Centennial, Thornton, Arvada and Greeley, coming in at Nos. 3, 6, 17, and 20, respectively.
With home prices rising in Colorado and across the nation, buying a first home is challenging. Potential buyers need to develop a realistic perspective on market prices, their financing options, and neighborhoods that have a good reputation and appeal to their lifestyle.
To help potential buyers target possible locations, WalletHub compared 300 cities of varying sizes across 27 key indicators of market attractiveness, affordability, and quality of life. Data includes important factors like cost of living, real-estate taxes, and property-crime rate.
Here are the rankings of the Colorado cities reported:
25. Fort Collins
27. Colorado Springs
Among those cities, Colorado Springs has the fourth-lowest real estate tax rate in the nation.
First-time home buyers are often in the millennial generation. As it turns out, Colorado is the ninth-best state for millennials, according to a separate WalletHub report.
Millennials – those born between 1981 and 1997 – make up over 35% of the workforce. While often thought of as “kids,” the oldest are 37 years old.
In addition to a total score of 9, Colorado ranks high for quality of life (7), economic health (3) and civic engagement (10). No. 1 ranked District of Columbia also ranked first in the nation for quality of life and civic engagement.
Colorado was evaluated along with all 50 states and the District of Columbia across 30 key metrics, ranging from share of millennials to millennial unemployment rate to millennial voter-turnout rate.
Here’s a look at the top 10 states for millennials:
For more information, see the full reports at https://wallethub.com/edu/best-and-worst-cities-for-first-time-home-buyers/5564/#methodology and https://wallethub.com/edu/best-states-for-millennials/33371/ .
Posted by Tom Kalinski Founder RE/MAX of Boulder on Friday, August 24th, 2018 at 10:36am.
Sellers in the Front Range housing market enjoyed a blistering spring season. Everything seemed to be breaking in favor of sellers — brisk appreciation, multiple offers, favorable terms, and generally quick sales. However, several trends are emerging that could derail (or at least diminish) a seller’s summer home sale plans. Here are three of the biggest trends likely to affect our summer market:
1. Rising Interest Rates. For the past several years, economists have been predicting that interest rates will rise from their historic lows (in the 3.5 percent range for a 30-year conventional fixed mortgage). It turns out that the eggheads finally got it right. Compared to this time two years ago, interest rates are at least a percent higher — and with the Fed raising their Funds Rate again at their last meeting (and with more raises on the horizon), it seems that even higher rates are coming. It seems now is an appropriate time to refer back to my article discussing the 1 percent Equals 10 Percent Rule, which is a rule of thumb that for each 1 percent increase in mortgage rates, your buying power decreases about 10 percent. When you consider this with the fact that average home prices in Boulder County have risen about 21 percent in the past two years, it means that the same buyers from two years ago can now afford 31 percent less than they could have back then.
If you’re thinking, “but I’m a seller, it doesn’t affect me.” Think of it in these terms: that pool of buyers who would have bought your 2,000 square-foot, three-bedroom house two years ago? They can now only afford a 1,380 square-foot, two-bedroom condo. That is, the pool of buyers for your home is significantly smaller today.
2. The market hates uncertainty. To say this has been the least conventional presidency of the modern era is an understatement. Setting aside the human side of the geopolitical uncertainty caused by the Trump administration (alienating the G7, backing out of the UN Human Rights Council, separating families at the border, etc.), the president has decided to wage trade wars on multiple fronts. And while these acts might be appeasing his base, they are starting to have a negative effect on the economy. As of mid-June, the stock market has given back all of the gains it made in 2018, due in large part to the trade wars started with China and other countries. Speaking of China, its investments in the United States have dropped 92 percent this year, and less foreign cash means less money to invest in the housing market.
The effect of this is straightforward — when people feel uncertain and less wealthy (i.e., watching their world turn topsy-turvy and stock portfolios drop), they are less willing to take risks and make changes. And while home ownership might be the best investment you’ll make, it still represents a risk, especially if you’re a first time home buyer. Thus, the uncertainties in the economy will produce fewer buyers than a steadily rising market.
3. What the frac? The fracking industry in Colorado has flourished since a Colorado Supreme Court ruling in 2016 held that state laws trumped local bans and regulations limiting fracking. In Weld County alone, there are approximately 23,000 fracking wells, and fights are currently raging over applications to drill near highly populated parts of Boulder and Broomfield counties. Wells are being placed within 1,000 feet of schools, and this encroaching boom has generated growing health and safety related concerns, from a Colorado School of Public Health study reporting that living near fracking wells may increase the risk of cancer, to a home in Firestone that literally exploded from a leaky underground pipeline.
As the concerns grow, so will buyers’ reservations about buying homes near fracking, which could slow demand in these areas. Longmont took the extraordinary step of paying two oil and gas companies $3 million to leave town and prevent future drilling. To be sure, there are competing property rights at issue, but if compromises are not reached that make people feel safe, then homeowners could see their home values fall.
In sum, our market has been red hot this spring, but there are issues on the horizon that could dampen summer sales prospects. Some of these are likely beyond our direct control, but I encourage you to make your voice heard where you feel you can make a difference. Your home’s equity (and your conscience) will thank you.
Jay Kalinski is broker/owner of Re/Max of Boulder.