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FOR IMMEDIATE RELEASE
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City Proposes 1st Dedicated
Fund for Affordable Housing
Property taxes and development fees would support new
initiative
DENVER, CO — Tuesday,
July 12, 2016 — Mayor
Michael B. Hancock and Councilwoman Robin Kniech today announced the final
details of a plan to create the city’s first dedicated funding stream for
affordable housing, which would help create 6,000 new homes for low- to
moderate-income families over the next 10 years.
The
proposal – developed by Mayor Hancock and Council members Kniech and Albus
Brooks after nearly a year of analysis and public input – calls for
allocating half of a property tax mill and a new development fee to generate
an estimated $150 million in the first 10 years starting Jan. 1, 2017.
“There
is no more important a priority in Denver right now than affordable housing,”
Mayor Hancock said. “In my State of the City speech yesterday, I spoke about
the thousands of people who lack the simple advantages so many of us take for
granted, like a place to call home. Home ownership gives families a
foundation to build equity, build wealth and build a life. This is a fair,
balanced and modest approach to address one of the most pressing problems
facing Denver today.”
Mayor
Hancock first announced his intent to establish a permanent source of local
funding for affordable housing last year during his second Inaugural Address.
The final details of the proposal will be presented to the City Council’s
Safety and Well-Being Committee tomorrow.
Those
details include how the funds would be generated, spent and overseen.
Revenue: Voters authorized annual increases in
city property tax revenue to pay for essential city services in 2012.
Utilizing half a mill for affordable housing would cost the typical
residential property owner $1 a month and the typical commercial owner $145
annually for every $1 million worth of commercial valuation. The proposal
also calls for establishing a new development fee. One-time fees on new
construction would range from 40 cents a square foot for industrial projects
to $1.70 on retail, hotel and other commercial development. There also would
be a 60-cent fee on single-family construction and $1.50 per square foot on
multi-family. The new development fee would be collected at the time that a
new project receives its building permit.
Expenditures: The new fund would allow for the
creation, preservation and rehabilitation of 6,000 affordable housing units
over 10 years. Primary use of funds will be the production and preservation
of permanent supportive housing, workforce rental housing, and for-sale
housing. Expenditures would support households across a wide income spectrum,
including people experiencing homelessness, low- and moderate-income renters
and future homeowners.
Governance: An appointed 21-member advisory board
would provide essential, strategic governance and input on uses of the
housing fund. This body would meet monthly in publically announced, open
meetings.
“Our
next step is to continue the dialogue on the methods the city is proposing
for raising this money, an approach we believe is reasonable and fair,” said
Councilwoman Kniech. “By pairing a small portion of the property tax revenue
that Denver voters approved almost four years ago with what would be one of
the lowest one-time fees on new residential and commercial development in the
nation, our broader community will be coming together with a sector of the
economy generating some of the demand to create a bold solution for
affordable housing in Denver.”
Over
the past several months, city officials – together with housing advocates,
developers, homeless service providers, community representatives and
industry groups – have been exploring the best approach for establishing a
new, local housing fund. Specific revenue sources were developed following
thorough analysis, including peer-city research, the findings of a nationally
known consultant, a local feasibility study, and multiple layers of public
and stakeholder input.
The
idea of a local, sustainable fund for affordable housing, and the fiscal
approaches available to establish it, was the subject of a public listening
session convened by the city in April that attracted more than 350 people. A
second, similar session will be held on July 21 at North High School, 2960
Speer Blvd, beginning at 6 p.m.
Since
2011, Denver’s strong gains in population, employment and income growth have
clearly increased demand for housing across a wide income spectrum, Hancock
said. The city’s revenue proposal for affordable housing spreads the burden
across every Denver property owner, both residential and commercial, and the
new ordinance would replace the city’s inclusionary housing ordinance—which
applied requirements only to developers of multi-family, for-sale projects
with more than 30 units.
An
informational presentation on the proposed housing fund will be presented to
the City Council’s Safety and Well-Being Committee tomorrow at 1:30 p.m. City
Council will consider the revenue proposal over the remainder of the summer,
with a formal vote expected by early September. If adopted, the new ordinance
would go into effect January 1, 2017.
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