On July 12, Denver Mayor Michael Hancock and Councilwoman Robin Kniech announced the final details of their plan to create the City’s first “dedicated funding stream” for affordable housing. The Office of Economic Development estimates that two sources of revenue will generate a minimum of $150 million over the next ten years, which the City will invest in at least 6,000 new and existing affordable housing units. The City Council will consider the proposal this summer, with a formal vote expected by early September. Here are the highlights:
- Denver is facing a short- and long-term shortage of affordable housing. Depending on whose numbers are cited, between 70,000 and 100,000 renter households, representing around half of all renter households in the City, are “cost burdened” by housing, which means they pay more than 30% of their gross income for housing.
- The proposed Fund will rely on two revenue sources. The first is a half-a-mill of property tax revenue, or $0.50 per $1,000 of assessed value, which Denver voters authorized for essential city services back in 2012. The City estimates that tax would translate to $12 annually on a $300,000 residence, or $145 annually on $1,000,000 of assessed commercial property. The second source of revenue will be new development impact fees, ranging from $0.40 per square foot on industrial and agricultural spaces, up to $1.50 per square on multi-family developments. The City’s current modeling methodology estimates that each source will contribute approximately half of the funds over the next ten years.
- The Fund will invest in the production of new affordable housing units and the preservation of the existing stock. Projects funded will include rental housing projects, homeownership programs, and some limited “supportive services” for the lowest-income residents. Administrative costs for the Fund are capped at eight percent of annual revenue.
- The Fund will be managed by a specially appointed, twenty-one member advisory board, which will meet publicly. Nine members serve ex-officio, nine will be appointed by the Mayor, and three will be appointed by the City Council. Decisions about how funds will be invested and how bids will be processed are still up in the air.
The first reading and public hearing is currently scheduled for August 22, with a final reading scheduled for August 29.
This post was authored by Otten Johnson summer law clerk Alex Gano. Alex is a third-year law student at the University of Colorado Law School.