Economy vs McMansion

People will need to decide if they want to slow down the economy by limiting homes sizes or
if they just get along with their neighbors and help create a healthy economy.


Economists caution limiting house sizes may limit Boulder
By Heath Urie (Contact)Thursday, April 3, 2008
Regulating house sizes in Boulder would have economic consequences ranging from potentially lower property-tax revenues to decreased demand for housing in an already-struggling market, economists said Wednesday.
The Boulder Planning Board will meet at 5 p.m. today to make recommendations to the City Council about what provisions an interim ordinance should contain to restrict the "floor-area ratio" of new houses or residential redevelopment.
The council has directed its staff to seek feedback from the Planning Board before it drafts an interim ordinance, which is scheduled for a first reading at the council's April 15 meeting.
City officials have said such an ordinance would address the increasing number of "pops and scrapes" in Boulder, possibly by limiting the floor-area ratio of those projects -- or the amount of finished square footage on all levels of the house.
Members of the City Council have heard complaints from people across Boulder upset when small homes are razed and replaced with many-thousand-square-foot homes.Economists say there is cause for everyone in the city to pay attention to the council's actions on the matter.
Byron Koste, executive director of the Real Estate Center at the University of Colorado's Leeds School of Business, said any city ordinance that limits variety of house size and choice could ultimately end up hurting the local economy.
"If the demand shrinks because people who want a bigger home no longer can come to a certain area ... that will decrease the competition and hurt the upside on the economic scale," Koste said. "The great cities of the world have chosen not to do this. I'm not sure why we are choosing to do this."
Gary Horvath, a research assistant at CU's Business Research Division, said property taxes could be affected by tightening building restrictions, but there is a potential upside, too.
"It could attract people to the area because they think the area is more responsible socially," Horvath said. "There are certain people who feel that would be an advantage and would want to live here."
Among the staff recommendations the Planning Board will consider today is to make an interim ordinance -- in whatever form the City Council decides -- effective beginning April 16. The staff also is recommending the ordinance remain in effect until at least March 2009, rather than the six-month time frame that was initially suggested, to allow more time for the city to draft permanent regulations.
The staff proposal also suggests that the council take one of two approaches to an interim ordinance: that it either enact a "simple" floor-area ratio limit by zone district, or a "sliding-scale" floor-area ratio limit based on lot size.
The first approach would set a maximum ratio and also would include a maximum square-footage limit and a minimum square-footage amount allowed, irrespective of lot size. The sliding-scale approach would set a ratio for a specified lot size, and the ratio would then increase as the lot size decreases.
An interim ordinance also would address the types of zoning districts affected, whether high ceilings, basements or garages are included in floor-area ratio calculations, a variance or appeals process and rules for grandfathering existing plans and structures.
Philip Shull, a member of the Planning Board since 2004, said he's looking forward to taking up the issue.
"I think there's a lot of interest in the discussion," Shull said. "I think it's the only real occasion we'll have to help shape the language."
Contact Camera Staff Writer Heath Urie at 303-473-1328 or urieh@dailycamera.com