A committee of Denver council members on Wednesday unanimously approved Mayor Michael Hancock’s plan to create a dedicated fund for affordable housing in the city.
The plan, which has stirred opposition from several perspectives, involves a new property tax as well as a fee on new development. The property tax is estimated to cost the average Denver homeowner $12 a year. The fee on new development would range from $.40 to $1.70 per square foot, developing on the type of construction.
Overall, the fund is projected to raise $156 million over the next 10 years, which would be used to help developers build, preserve and rehabilitate 6,000 affordable housing units. That amount, it should be noted, would be a fraction of the cost of those units.
Some members of the council’s Committee on Safety, Housing, Education and Homelessness took issue with the choice of funding sources. Given the recent success of Denver’s economy and the city’s bulging coffers, many members have suggested simply funding affordable housing work through the council’s general fund or marijuana tax revenues.
That’s what Councilman Chris Herndon proposed at last week’s committee meeting – funding affordable housing through the city’s budget for the first year, and then vetting other potential sources for subsequent years.
Councilwoman Robin Kniech, who designed the plan along with Councilman Albus Brooks and city staff, defended the sources her team had selected by pointing out that, if funding for affordable housing were to come from the general fund, it would compete with critical city needs like safety and transportation.
“I cannot emphasize enough that dedicating these revenue sources protects these funds from years when this general fund will not be as flush,” Kniech said. “This budget is not going to last through every downturn.”
Other council members think that the plan needs to be more ambitious.
“This isn’t some huge windfall for our affordable housing need. This is, in fact, just maintaining the status quo,” Councilman Rafael Espinoza said. He went on to say that he would prefer to assemble an advisory committee and spend a year developing and modeling solutions, during which the program could be supported by general fund dollars.
Espinoza noted that more than 80,000 families in Denver are housing-insecure, meaning that they spend more than 30% of their income on rent or mortgages. And Denver is attracting thousands more residents each month, pushing costs up for those already here.
Ultimately, Herndon’s proposal wasn’t seconded and didn’t move on to full council. But the plan could still be amended to incorporate some of the ideas council members raised.
The proposal will go before the full council September 12th and is slated for a final vote on September 19th.
Photo Credit: Jeremy, Creative Commons, Flickr
