Denver City Council Votes to Pass Affordable Housing Fund, Projecting to Raise $150 Million in 10 Years
Co-Authored by Karly Malpiede and Alana Romans
On Monday, September 19th the Denver City Council made history by passing Denver’s First Affordable Housing Trust Fund. The bill, which passed by a 9 to 4 vote, aims to raise $156.4 million over the next 10 years to produce, preserve and rehab 6,000 units of affordable housing. The induction of a fund purely created to address affordable housing needs is monumental for the city of Denver.
The passing of this fund comes at a critical time for Denver. With rental costs continuing to rise, and a lack of current affordable options (over 30,000 units to be exact) our city is faced with a crisis. The only option for many individuals is to move further and further outside of the city, which is unrealistic for most. They are than faced with a lack of transit options, which presents a host of additional problems.
While everyone on City Council agreed the fund should be permanent, an alternative bill was proposed. After four separate amendments were made did it gain support from the majority of City Council. One of these amendments was offered by Councilwoman Kendra Black and mandates a 10-year sunset provision. In simple terms, this amendment ensured that the passing affordable housing fund would not be permanent, as it was originally designed.
“The reality is that when you have competition, it forces conversation,” said Councilman Christopher Herndon, who co-sponsored the alternative bill that was defeated.
Councilwoman Deborah Ortega echoed that sentiment after co-sponsoring the alternative bill. Ortego offered support for the Mayor’s proposal after numerous amendments were implemented to make the bill stronger. This included the need for a comprehensive housing plan with oversight from Council and transparency on how these dollars will be spend, on what and why.
To support the fund, money will be collected from two sources: a property tax increase of one half mill to be assessed starting January 1, 2017, and from a development impact fee that will access a cost of $.40 to $1.70 per square foot of development to commence on January 1, 2017 as well. In order to make a full $15 million available in the first year, Mayor Hancock has pledged a one-time $5 million in general funds from the City’s 2017 budget.
Now that the bill has passed, it must be signed into law by Mayor Hancock. Then a committee will be assembled to designate how the money is spent. In the meantime, the Office of Economic Development has outlined a $15 million budget and expects that $9.4 million will be spent in 2017 to support development projects totaling 533 units. OED also anticipates that $3 million will be spent on land banking that could accommodate up to 120 units. $1.5 million will be set aside for emergency assistance for 250 households facing displacement.
While many criticize the City’s lack of momentum on addressing the housing crisis, and believe that $150 million is just a drop in the bucket when faced with a shortfall of over $30,000 units, this is still a historic step in the right direction. With a goal of over 6,000 units in the next ten years, our hope is that we can only build on this, and encourage a permanent solution in the future.