Boulder’s New Demolition and Addition Fee: What Homeowners Should Know
Boulder City Council has approved a new ordinance introducing fees on home demolitions and large additions. Beginning in early 2026, projects that remove an existing single-family home or add significant new square footage will contribute to the city’s affordable housing fund. The measure includes exemptions and credits for smaller homes and for square footage replaced one-for-one, making accurate planning and expert guidance more important than ever.
Table of Contents
- Understanding Boulder’s New Ordinance
- Why the City is Taking This Step
- What It Means for Remodeling and Rebuilding
- How Melton Helps Clients Plan Ahead
- Frequently Asked Questions
Understanding Boulder’s New Ordinance
In November 2025, Boulder City Council voted to adopt a new fee targeting scrape and rebuild projects and major home additions. The measure, set to take effect January 31, 2026, applies to detached single-family homes that are torn down and replaced with larger structures, as well as additions that expand an existing home by more than 500 square feet.
The fee is calculated at roughly $11 per additional square foot beyond the size of the original home, with funds directed to the city’s affordable housing program. Homeowners can credit the square footage of the home they remove against the size of the new home. For example, if an 1,800 square-foot home is replaced by a 2,800 square-foot home, only the additional 1,000 square feet is subject to the fee.
There is also a small-home exemption that excludes properties under 2,000 square feet from the new fee. The city’s intent is to protect smaller, more attainable homes from additional costs while applying the fee to larger, higher-impact projects.
Accessory dwelling units (ADUs) are also exempt from the calculation, which helps encourage small-scale infill housing within existing neighborhoods. According to city estimates, the new fee could generate approximately $1.2 million annually for Boulder’s affordable housing initiatives. The revenue will be directed toward expanding access to affordable housing and supporting the city’s long-term housing goals.
Why the City is Taking This Step
Over the past decade, Boulder has seen a growing number of older, smaller homes replaced with much larger new builds. City officials and housing advocates view this trend as contributing to a widening affordability gap as more modest properties disappear, and the remaining housing stock becomes increasingly out of reach for many residents.
The new fee aims to offset this dynamic by asking higher-end rebuilds to contribute to affordability efforts. The inclusion of size credits and small-home exemptions reflects an effort to make the policy more balanced, focusing on large-scale redevelopments while leaving smaller properties unaffected. In practice, it is a policy designed to balance redevelopment with community goals, not to halt construction but to ensure growth benefits a broader range of residents.
What It Means for Remodeling and Rebuilding
For homeowners and design-build clients, this change primarily affects how project costs are structured and when they are reviewed. A full teardown and rebuild, or an addition larger than 500 square feet, will now carry an added fee that is tied to the project’s scale. Because the fee applies only to square footage added beyond the existing home, accurate documentation of the current structure will be an important first step in any rebuild or addition project.
This does not mean large remodels are off the table. Boulder’s residential market remains resilient, and thoughtfully executed improvements continue to add lasting value. What it does mean is that selecting the right approach for your home has become more important than ever.
The key takeaway is not to scale back, but to plan smarter. With early guidance and a clear understanding of how the new rules apply to your home’s size, homeowners can make confident, forward-thinking choices that suit both their home and their budget.
How Melton Helps Clients Plan Ahead
As a company deeply rooted in Boulder’s building community, we stay informed about every change that affects our clients. Our design-build process already incorporates detailed feasibility reviews and early cost transparency, so updates like this can be discussed long before design work is finalized.
It is critical to have a trusted, local team to protect your budget and ensure the success of your project. Our design-build process is uniquely positioned to handle the evolving landscape of regulatory changes. Melton has been working almost exclusively in Boulder County for over 30 years and keeps a very close eye on any changes to code or legislation. We want to be your Boulder design and construction experts.
– Adrian – Project Development Manager
For homeowners considering larger or more complex remodels, our full-service design-build team continues to be the best resource for navigating permitting, budgeting, and architectural coordination under the new rules. We approach each project holistically to ensure compliance, value, and design excellence remain aligned from the first concept through construction.
At the same time, not every home improvement requires a full structural remodel. Melton’s Refresh division specializes in remove and replace projects that renew existing spaces without major structural changes or new permitting layers. For many homeowners, this can be a smart, efficient way to refresh their space within the city’s updated framework.
Whether your project requires permitting or not, our goal remains the same: to help Boulder homeowners move forward with confidence, clarity, and quality craftsmanship as the regulations evolve.
Frequently Asked Questions
Does this fee apply to all remodels?
No. It applies specifically to projects that demolish and replace a single-family home with a larger structure or add more than 500 square feet of new floor area. Homes smaller than 2,000 square feet are exempt.
What if I add an ADU?
Accessory dwelling units are excluded from the square-footage calculation, so adding one does not automatically trigger the fee.
How is the fee calculated?
You can credit the square footage of the home you remove against the new structure. Only the additional square footage beyond the original size is subject to the fee.
When does the new rule take effect?
January 31, 2026. Projects permitted before that date are expected to follow current rules.
How will this change my planning process?
It adds one more layer of budgeting awareness. When we begin the design process, we will help you determine whether your scope of work is affected and what options make the most sense for your goals.