9News: Denver mayor introduces new affordable housing initiative

Marissa Solomon, 9News

DENVER — A new tax increase to fund affordable housing projects in Denver could be on your ballot in November.

At a news conference Monday, Denver Mayor Mike Johnston announced a proposal to increase the city's sales tax by 0.5%, where the proceeds from this tax hike would go toward the administration's housing development goals and other housing initiatives. That's equivalent to a five-cent tax on every $10 purchase. 

The Affordable Denver Fund would bring Denver's current 8.81% sales tax rate up to 9.31%, raising an estimated $100 million a year.

City officials said Monday the money would expand current initiatives like housing vouchers, down payment assistance, new construction and preserving existing affordable housing units. They also said it would fund new initiatives such as a revolving loan fund for construction projects and public equity in affordable housing.

Jamie Rife, executive director of Denver's Department of Housing Stability (HOST), emphasized the focus on strategies to help Denver's low- and middle-income earners along with those exiting homelessness. 

A separate initiative, Johnston's All In Mile High initiative to address homeless in Denver, includes programs to put people in permanent affordable housing. That program is already about $65 million over budget – the Affordable Denver Fund will not be used to subsidize those programs.

When it comes to keeping up with housing needs, city officials estimate Denver is on track to establish 19,000 affordable units by 2033 with the help of current federal and local funding. 

However, they claim new analysis shows that Denver will be short 44,000 affordable units during this same timespan for households earning less than 100% of the area median income.

This additional funding would address a 25,000-unit gap, city officials say. 

"We are very focused on the outcomes we can deliver for Denver here," Johnston said Monday. "So, the goal is that this allows us to build or to bring on 44,000 additional units, which is what the estimate is [for] the total gap we have to fill over the next 10 years."

The Affordable Denver Fund would be the second sales tax hike up for voter approval if it makes the ballot in November. 

The first is a proposed 0.34% increase that would provide additional funding for Denver Health.

Denver City Council voted to refer that measure to the ballot last month. In March, state legislators in Colorado fast-tracked $5 million to help keep Denver Health afloat after state health care leaders warned that the safety net hospital is nearing a financial "death spiral." 

If voters pass both initiatives, it brings Denver's sales tax rate up to a total of 9.65%, which Johnston argues is still competitive in the region.

The Affordable Denver Fund proposal is backed by Denver city councilmembers Amanda Sandoval, Shontel Lewis, Darrell Watson, Sarah Parady and Diana Romero Campbell.

The mayor's administration is presenting the proposed fund to City Council’s Budget and Policy Committee in a meeting Monday night. 

Ballot language is expected to be introduced to City Council’s Safety, Housing, Education and Homelessness Committee for consideration on July 17 after city officials shore up the policy in the coming weeks.

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