Denver Proposal Doubles Housing Fund and Provides $105 Million to Increase Affordable Housing
Mayor Michael B. Hancock today released a proposed framework that partners with the Denver Housing Authority (DHA) to double the Affordable Housing Fund annually – from $15 million to $30 million – and generate a new estimated $105 million funding surge for affordable housing in the next five years.
“Denver’s need for more affordable housing is critical. Since our creation of Denver’s first dedicated Affordable Housing Fund, we’ve been working on ways to leverage those dollars to expand the fund’s capacity and broaden its impact,” Mayor Hancock said. “This proposal will deploy more funding quicker to support our residents and families without increasing costs on the very households we are working to serve.”
The Mayor continued, “We can all agree – more resources are key to addressing this challenge. The Housing Authority has been a trusted partner in building and preserving high quality affordable homes for those who need them, and this partnership will allow us to do more, faster for residents who are working hard and need support.”
The proposal would improve the alignment of Denver’s Affordable Housing Fund with the five-year housing plan. Ultimately, Denver would double its creation and preservation estimates from 3,000 units to at least 6,400 units over five years. The proposal directs about half of the newly doubled Affordable Housing Fund to support those most burdened by housing costs (0-30% AMI and those experiencing homelessness) and allocates the other half to fulfill other priorities within the Housing an Inclusive Denver five-year plan.
The proposed partnership with DHA brings more funding in the form of bonds to accelerate building and preserving much-needed affordable housing, and increases the land available for future affordable housing use for Denver’s lowest-income residents and those experiencing homelessness. By leveraging DHA’s expertise in serving those most in need, the proposal also expands the city’s ability to deliver on additional areas of housing needs identified in the five-year plan.
“Because affordable housing is Denver’s greatest need, it is such a high priority for City Council. Each additional unit represents a new opportunity for a family in Denver, which is why we continually look for creative ways to increase funding for affordable housing,” Council President Albus Brooks said. “This bond proposal signals a new future for Denver, reaffirming our commitment to affordable housing by doubling our original investment.”
The estimated $105 million will be generated from the issuance of bonds by DHA, supported by the appropriation of an existing half property tax mill from the city. The bonds will spur building new and preserving current permanently affordable housing units maintained by DHA, and create a new land acquisition fund to secure a pipeline of projects to serve Denver’s lowest-income residents and those experiencing homeless.
The new $105 million bond appropriation to DHA will:
“DHA is proud to be a partner in this creative funding opportunity that will accelerate and expand the creation and preservation of much needed affordable housing targeted at Denver's lowest income and most vulnerable residents,” stated Ismael Guerrero, DHA Executive Director. “This bond initiative underscores the city’s and the Housing Authority's commitment to deliver real solutions for Denver residents most impacted by the high cost of housing.”
Under the proposal, an additional yearly $7 million General Fund contribution will be made to the Affordable Housing Fund starting in 2019. To backfill the half mill that will be appropriated to DHA, the framework proposes to increase the city’s special marijuana sales tax from 3.5 percent to 5.5 percent, generating an estimated $8 million per year for the Affordable Housing Fund.
“Colorado Leads is a pro-business alliance that promotes the economic and community benefits of a responsible cannabis industry. Our members have created tens of thousands of jobs, and their employees, like so many others in Denver, need affordable places to live within a reasonable distance from their work,” said Chuck Smith, Board Chairman for Colorado Leads. “We support the cannabis sales tax increase to help ease the housing challenges faced by our employees, as well as scores of other Denver residents.”
The new $7 million annual General Fund allocation will:
“I believe this is a fiscally responsible approach that balances the critical need for more housing, faster, with prudent management of the city’s finances. This proposal would allow the city to leverage the tools and resources of trusted partners to stretch our dollars further without requiring a property tax increase,” said Denver Chief Financial Officer Brendan Hanlon.
“Innovative partnerships are essential to affordable housing, and this plan builds on our successful partnerships, strategy and record-setting pace of building and preserving units that is currently underway in Denver,” said Eric Hiraga, Executive Director of the Denver Office of Economic Development. “We look forward to investing additional funds across our network of private and mission-driven organizations that are making a difference in fostering housing stability.”
Several aspects of the proposal would require City Council action.
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