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Land Use Policies and Strategies

The State Demography Office projects Colorado’s population to exceed 5.9 million by the year 2020, and 6.4 million by 2025, with continued peaks and valleys of economic change. This represents a 28 percent increase between 2010 and 2025. Continued growth will impact schools, transportation, air quality, and other public services. In some communities, development pays its own way through fees for open space, parks and recreation facilities, roads, water and sewage treatment, fire and police protection, and trash removal. The cost for these services will then be borne by each new development, rather than being spread among the existing community residents and businesses. In addition to fees for municipal services, developers must also add in the cost of the local standards required to build in each community. These standards can require brick facades, three-inch diameter trees, or minimum lot sizes. Each adds costs that are passed on to the consumer.

Local government’s greatest impact on housing cost is in regulating land use and building standards. It is when a local government includes affordable housing in its long-term development plans that the community achieves the greatest gains in keeping housing affordable to its residents.


A strategy for attracting affordable housing must be linked with local capital improvement plans. The lack of sufficient infrastructure increases the cost of housing development, limits site options, diminishes long-term economic competitiveness, and aggravates growth-related disputes. The amount of developable land is often dependent on topography, abutment to state or federal lands, or adjacent municipalities. In many towns, construction of market-priced housing has consumed the remaining buildable sites, so planning ahead is important.

Create a dialogue with the development community, including real estate agents, developers, builders, architects, engineers, and planners. Allow everyone an opportunity to express their points of view. Look for creative solutions to difficult issues.

To reduce costs for affordable housing in your community, include the following in your expedited process: building permit, zoning permit, subdivision approval, rezoning, certification, special exception, variance, or any other official action of your jurisdiction having the effect of permitting the development of land.

Work/live policies encourage mixed uses in appropriate non-residential or existing mixed-use areas to help achieve a reduction in commuter traffic, create affordability, and provide living space in renovated, redesigned structures. These policies can be used to encourage and support artists, telecommuters, freelancers, and other compatible employment.


STEP 1: Analyze the purpose of land use regulations and building codes

The primary purpose of land use regulations and building codes is the health and safety of residents living and working in the community. Local governments should look at the cost of implementing these policies to determine their long-term impact on housing development, considering the original purpose of the existing code or standard, and updating or changing them as necessary.

STEP 2: Understand your housing market

Assess the overall condition of a community’s housing and the need for specific types of housing (i.e., homeownership, rental, and special needs housing). A housing needs assessment examines existing housing stock — its characteristics, physical condition, and the number of units — and may make recommendations about the type and quantity of housing required to satisfy future needs.

STEP 3: Learn from other Colorado local jurisdictions

Colorado communities have many different approaches to affordable housing. Programs range from incentives to requirements, from monetary contributions to donations of land, from deferral of impact fees to fee waivers. Local governments can draw lessons from the experiences of similar communities, exploring how they have responded to the demand for affordable housing, and planning accordingly.

STEP 4: Create an affordable housing strategy

Opportunities to create affordable housing occur on a frequent basis in local communities. By creating affordable housing goals and strategies tied to the housing and economic needs of the community, local governments are prepared to take advantage of opportunities in a consistent and rational manner.


Strategy Benefit Public Action
Zone sufficient land for all housing types, including medium and high densities. Allows market to respond to housing needs. Avoids zoning delays that increase the cost of specific housing developments. Vacant or under-developed land can be zoned based on projected housing needs including single-family, multi-family, affordable, and manufactured housing.
Reduce/eliminate minimum lot size. Provides for more units per acre, thereby promoting efficiency and affordability. Allow alternative site designs, based on utility access, soils, topography, and other factors to minimize consumption of land.
Increase densities for residential development in commercial areas. Ensures that housing is located close to employment. Modify zoning ordinances to allow increased densities in commercial areas.
Allow Planned Unit Developments (PUDs). As a flexible negotiated tool, PUDs encourage affordable housing. Modify local zoning or subdivision ordinances.
Enact a parking reduction ratio for projects that meet your standards for affordable housing. Increases land use efficiency and reduces cost of housing. Examine parking standards and compute a reduction formula for affordable housing based on your community’s needs. Enact by ordinance.
Increase densities for residential development along transportation corridors. Ensures that workers have either proximity to their jobs or access to mass transportation. Target urban corridors in planning documents as areas of increased density.
Encourage mixed-use development. Allows residential to co-exist with commercial uses. Modify zoning regulations to allow for mixed-use development.
Create density bonuses to encourage more efficient land use. Provides for an increase in density over the otherwise maximum developable density when a project incorporates a certain ratio of affordable units to market units and when those units will stay affordable for a designated period of time. Modify local zoning laws to allow density bonuses.
Provide a linkage ordinance. Large-scale businesses provide affordable units during the development process to increase housing units available to their minimum wage workers. Modify local zoning ordinances to allow for linkage.
Enact a maximum lot size. Decreases sprawl, increases densities and helps promote production of affordable housing units. Identify and designate areas for maximum lot size development through the comprehensive plan.
Allow zero lot-line development. Allows houses to be sited on a common lot line to increase the usable space on the other side. Adopt/modify local zoning laws to allow zero side or rear yard setbacks.
Allow/encourage clustering of housing units. Reduces development and facility maintenance costs and provides incentives for efficient development. Modify subdivision or zoning regulations to allow for clustering.


Benefit Public Action
Enact uniform building codes that are accepted by all local governments. Allows builders to use economies of scale for construction designs and materials, reduces design and construction errors. Adopt uniform building codes. Limit amendments to local health and safety issues only. If amendments to building codes are being considered, the cost of these variations should be considered in the decision.
Allow flexibility in rehabilitation codes while maintaining protection of health and safety. Allows rehab and conversion of buildings to affordable housing while maintaining standards for community health and safety. Adopt a scoring system that quantifies the overall standard of safety by assigning points to each improvement relative to each other. This creates an overall safety threshold, but allows cost savings on individual improvements.
Assess development charges based on square footage rather than on a per-unit basis. Costs for modest homes and apartments will decrease and larger, less land-efficient homes will pay more, thus encouraging affordable housing. Develop and adopt a formula for assessing development fees that relates to cost per square foot.
Promote the use of infill development. Enhances housing affordability by using existing infrastructure and services rather than requiring expensive new roads or water and sewer lines. Exempt or defer infill development areas from some fees or permit requirements, or grant tax rebates or density bonuses.
Provide an infrastructure loan or grant (up to a designated percentage) to meet off-site infrastructure requirements for a project that meets criteria established by the local government. For example, the local government may provide a loan or grant up to 15 percent of any off-site cost deemed extraordinary by both the local government and the developer. Encourages affordable housing by deferring extraordinary off-site costs until the project is able to recoup some of these costs as other sites develop. On a case-by-case basis, a local government may provide a loan or grant (up to a designated percentage) to a project that meets the criteria established by the local government.
Ensure that zoning and land use regulations allow manufactured homes to be installed on permanent foundations. Prefabricated homes are constructed under strict standards, have many styles, and offer an important affordable alternative to site-built homes. Modify zoning and land use regulations to allow manufactured housing to be installed on permanent foundations.
Allow innovative construction methods. Examples include new plumbing or electrical techniques or materials. New materials and design elements may contribute to housing affordability if allowed by a local government. Modify building code regulations to allow innovative construction.


Benefit Public Action
Use one-stop or parallel permit processing. Reduces time delays caused by multiple agency reviews. Such delays add to the carrying costs of housing development for time-sensitive items such as property taxes and construction loan interest. Develop and implement common application forms where possible, and provide verification and consulting services throughout the planning process, to ensure that permits can be issued as quickly as possible.
Set time limits for multiple agency review and approval of building plans. Reduces time delays and uncertainties. The lead municipal agency should transmit a single master application to appropriate departments giving each a set time for response. After joint hearings with the developer, each department has a limited amount of time for final decision.
Provide for waiver or deferral of fees. Reduces up-front development costs and retains savings in the project. The project becomes more affordable for current and future residents. Establish affordable housing criteria for which waivers may be considered. Projects that meet criteria are eligible for waiver or deferral.
Allow a Property Tax exemption for those developments meeting defined criteria. Encourages affordable housing. Fewer costs are borne by the units. Develop affordable housing criteria that affordable projects must meet to qualify for a defined term of property tax exemption.
Resolve historic and natural resource protection issues — such as landmarks or open space — during the planning process, rather than have these issues delay the permitting process and add cost to the project. Saves time and money. Provides more certainty in the permitting and development process. Eliminates second-guessing or hidden costs during the development process. Requires that historic or natural resources be inventoried, evaluated, and protected during comprehensive plan updates. Resource protection measures must be clear and objective.
Allow for Transfer of Development Rights (TDRs). Accommodates housing construction while protecting environmental resources or open space. Development rights are assigned to land that is designated for open space. These development rights may be sold by the landowner and transferred to other areas where development is more desired.
Use development agreements. This process works best as a public/private partnership where the risk can be borne by both sectors. Developers enter into an agreement with the local government which “freezes” the regulations applicable to the development for a period of time specified in the agreement. The Development Agreement includes the savings accrued from regulatory concessions in return for the construction of affordable housing, public facilities, or preservation of environmentally sensitive land or historic structures.


Local Housing Trust Fund

Local governments can create a dedicated funding stream for affordable housing in a community through local housing trust funds. These trust funds can create new gap sources for the development of housing or land banking for future housing needs when sufficient funding is available. Depending upon the proposed source of funding, a new revenue stream or tax could be subject to voter approval under the TABOR amendment.

Incentives For Infill Housing

Local jurisdictions can create an incentive for infill housing by reimbursing development fees for affordable housing built inside defined boundaries. Developing within a town or city’s existing grid utilizes infrastructure already in place and reduces the traffic impact of development, particularly where public transit exists.

Accessory Dwelling Unit

An Accessory Dwelling Unit is an additional living unit attached to a primary residence on a single-family lot. Most local governments provide stringent guidelines which detail how and when these units will be allowed. Some communities approach the issue on a case-by-case basis. Other communities utilize conditional use permits and a set of criteria for parcels on which accessory dwellings may be built, such as lot size, setback requirements, access, and parking.

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