Boulder’s Planning Board has approved a proposal to build 45 furnished efficiency-living apartments at 2206 Pearl Street near the city’s downtown.

The project is among the first of its kind, given the size of the apartments and the limited vehicle parking. It is also an early test case of new and proposed housing policies in the City of Boulder to encourage more housing density.

The developer, stok Investment Group, a real estate firm with offices in Boulder, seeks to build 300-square-foot apartments equipped with robotic furniture to optimize limited space. For example, the bed can be manually or electronically raised from the floor to the ceiling to make space for a desk. Communal space is common throughout the property. Lockers and bike storage are provided on-site.

Moreover, the developer is seeking special permission to build about half the number of parking spaces required under city code. In exchange, it will charge up to $150 per month for a parking space and subsidize alternative modes of transportation, such as bus passes, car sharing and B-Cycle and Lime scooter rides. The building’s parking garage includes tandem spaces, where one space is shared between two cars, one behind the other, to maximize space.

The developers said they want the building to be Boulder’s first “zero-carbon” housing project certified by the Living Future Institute. This means it would be powered by renewable electricity like wind and solar, and the construction would take into account “embodied carbon” from the building’s materials.

The project includes about 2,000 square feet of ground-floor commercial space. The site at 2206 Pearl Street (between 22nd and 23rd Streets) is currently occupied by a museum and glass-blowing studio. The developer has not yet applied for demolition and building permits. The Boulder City Council will have the opportunity to weigh in on the project as soon as next month.

On paper, this type of housing project is precisely the sort the Boulder City Council has sought to encourage in recent years. Urban infill and housing density are central components of the city’s current plan to increase the housing supply.

In 2023, councilmembers adopted new zoning regulations as part of the “zoning for affordable housing” initiative. One change eliminated a requirement for Planning Board approval for efficiency-living units in certain mixed-use zoning districts. (The application for the 2206 Pearl Street project began before these changes took effect.) Councilmembers are also contemplating reducing or eliminating the city’s minimum parking requirements, which developers say drive up the cost of building housing. Plans to update energy codes requiring new homes to be all-electric are also underway.

“This is a housing type that we desperately need. It doesn’t exist in Boulder. Small apartments like this are for our workforce,” Jill Grano, a realtor, former city councilmember and researcher at CU Boulder’s Boulder Affordable Housing Initiative, told the Planning Board on April 2, during the meeting at which the board approved the project.

But projects like this one, aimed at increasing housing density, come with tradeoffs, including displacing businesses and potentially changing the character of neighborhoods. Some are skeptical that the 2206 Pearl Street project will be affordable for middle-income workers, a group the developers said they are targeting.

The developers have pitched the project as housing for employees who would otherwise have to commute into the city for work. As such, they plan to price the units so that renters earning about 100% the area median income spend no more than 30% of their income on rent. That translates to someone earning $102,000 per year spending no more than $2,555 on rent, according to the latest estimates from the Colorado Housing and Finance Authority.

Some argue that such a price point will not be affordable to many of the city’s renters who earn well below the area median income.

“I am very skeptical” the project will create affordable housing for workers, Jorge Boone, chair of the Planning Board, said during the meeting. Boone was the only member to vote against the developer’s site review plan application, although others expressed concern.

“Which workforce is making 100 grand per year and is willing to live in 300 square feet?” ml Robles, a Planning Board member, asked during the meeting. “That’s my biggest concern.”

The relatively small size of the units and the price point underscore just how challenging it is to build affordable housing for middle-income residents in Boulder.

Most of the city’s subsidized affordable housing units are priced for people earning up to 60% the area median income, or about $64,000, according to city data. Securing subsidies and tax credits for housing projects for people with higher incomes is challenging, according to housing experts and developers.

That financial reality, coupled with demand for high-end housing, means projects like the one proposed by stok Investment Group are rare in Boulder.  

“This is providing a different type of housing than what has traditionally been seen down on Pearl Street and downtown on East Pearl. Recent developments have been larger, luxury for-sale condo developments,” Danica Powell, founder of Trestle Strategy Group and a consultant for the developers. She added, “Most of these units were sold for more than $2 million.”

Moreover, Powell said the project has been in the entitlement process since Dec. 2021, when the developers first submitted their pre-application to the City of Boulder. Application fees, inflation and labor costs over this time also drove up the cost of the 2206 Pearl Street project. “Site review is expensive,’ she said.

In addition to financial challenges, the project offers a glimpse into the complexities of serving renters who do not own vehicles.

As early as this year, the Boulder City Council is likely to amend city code to reduce or eliminate parking requirements as part of an effort to reduce the cost of building housing. But managing the transportation needs of residents without cars is more complicated.

Nearby residents have raised concerns about tenants simply parking their cars on streets in the adjacent Goss-Grove and Whitter neighborhoods. Transportation advocates want to ensure tenants have the ability to get around town by other means. The developer’s “transportation management plan” attempts to address both concerns.

Much of the Planning Board discussion about the project centered on how to manage these transportation needs. In the end, board members adopted a condition of approval that requires the developer to build one outdoor covered seating area with a designated rideshare pick-up spot.

It was a relatively minor suggestion in the grand scheme of the project. But it highlighted a particular attention to detail for people who do not own cars, according to Powell, a consultant for the developer.

“I thought it was a really robust conversation about where we’re headed with transportation,” Powell told Boulder Reporting Lab. “We are really on the cusp of thinking about mobility differently.”