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The Moratorium And The Boom
The most-asked question around here this week was what the moratorium would do to Boulder's home prices.
The automatic intuition is that a smaller supply of homes will mean even higher prices.
Herewith a minority opinion. The supply of houses is already so short that the moratorium doesn't make any difference.
Growth pressure had already frozen much of the development process in that planning department decisions were often overruled somewhere between there and council.
A moratorium of sorts had already existed for over a year; it did not appear instantly at the moment of B.J. Miller's Midnight Raid.
Even if every project for development were approved, and proceeded hell bent for leather, new development could not soak up the demand for housing in Boulder.
As we said in this space last year, our current price boom runs very deep, is entirely appropriate, and is a home grown affair.
Incomes in Boulder have risen almost 100% since the last boom top in the late 70's, and vastly exceed the negligible price appreciation of the 80's. Nor is this boom a California phenonmenon: the Colorado Department of Motor Vehicles says that surrenders of California drivers' licenses are running at about the same rate as in prior years.
Our boom has changed shape since ignition in the fall of 1990. At first, a zero rental vacancy rate and accumulated purchasing power made the bottom of the market the hottest part. Condominium and starter home values raced off, first. However, market demand petered out at prices above $250,000.
Not now. In what you could call stage two, which arrived last fall, "found equities" are releveraged. Many people who bought two years ago suddenly have a fresh fifty grand to put down if they roll over (and up) into a new home. Suddenly, Boulder has a healthy, liquid market for $300-400,000 homes.
In a normal market (Dallas, Boston), stage three would follow quickly: a blowoff in prices followed by a forest of for sale signs. Followed by stage four: a decline in prices giving up about a third of the frenzied appreciation.
This pattern is not at all likely in Boulder for two reasons: growth control, and huge numbers of aging baby boomers who ain't moving no matter what happens to the price of the house.
Boulder prices will keep going until buyers run out of income with which to qualify for loans. Boulder's rate of sales will fall a little, and appreciation will flatten out. The excess demand will then bid up the prices in the rest of the county in an acceleration of what is already happening now.
The moratorium is an effect of these market pressures, not a cause.
The only surprising things about the moratorium were these: nobody bothered to show up on Tuesday to trumpet private property rights, and most of those who spoke seemed unaware that Boulder has been trying some planning for quite a while.
Serious people stood to say that Boulder should take into account environment, transportation, population, and quality of life while planning land use. Boulder has done little else for forty years.
There is a clear consensus in town that growth is too fast, and an emerging consensus that Boulder should halt growth completely, Comprehensive Plan or no (take your Area Two B, and É.).
The great planning efforts of the past have simply been overwhelmed by their own success. Every effort Boulder makes to improve itself makes it more attractive; its homes more valuable, its job market better.
There is no solution except to keep going. More open space, more trails, more power to the neigborhoods, more friendliness to pedestrians, and discomfort for cars. Press ahead with the whole agenda which has worked so well.
Many of these efforts can be deeply annoying (For my own part, I could do without any more redundant sophistry about "integrated" planning. What else is planning supposed to do, but integrate?). Other measures, if thoughtlessly done, are unfairly expensive -- particularly to those who had projects under way in good faith compliance with all nine thousand existing planning measures.
But maintain affordability through faster building? Nonsense. Keep doing what has worked, and let values of all kinds rise.
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