Expanding mixed-income housing: Denver council's sales tax proposal

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Some Denver City Council members said Tuesday during the meeting of a new working group that if a proposed sales tax is put on the ballot and passes the money should be spent on mixed-income housing.

City staff said public money can be used on buildings that contain market-rate housing so long as they fund lower-income units. Council member Paul Kashmann said the way the ballot proposal currently is worded, there is no restriction on how the $100 million in annual revenue must be spent other than on projects at 100% of average median income for renters (market rate) or less and 120% or less for homeownership assistance. For a family of four, 100% of the average median income is $130,000.

“When people think of affordability they think (the tax money) goes to things like shelters,” said council member Sarah Parady, who chairs the council’s new Housing and Homelessness Working Group. The way the proposed ordinance is written, middle income people could benefit. According to Parady, Denver is short 27,000 units for people in the 0 to 30% average median income range, or $26,100 or less. She has said she wants that to be the priority.

Council member Flor Alvidrez said she would like to see language that prevents the “concentration of poverty.” She said staff have said the city has 3,500 affordable units ready to be constructed they only had the money. She said she requested a list of the projects from the director of the Department of Housing Stability, Jamie Rife, and only counted 3,000 units in the pipeline. Half of those were not shovel-ready, she said.

Mayoral restrictions needed?

Kashmann said he would not want to see all $100 million go to one project that is 100% AMI. He said he respects the current mayor, but as a journalist and a council member has seen other mayors he would not want to hand over $100 million to.

The way the ordinance is written, the council would only be able to sign off on the first year’s expenditures of the money. After that, it would be woven into the regular budget process, said city attorney Anshul Bagga. Council members drafting the ballot measure said they would consider adding language to make the annual reviews permanent.

Spreading affordable housing throughout city

Council President Amanda Sandoval said it is not equitable that most of the homeless shelters have been placed in District 8. She said affordable housing should be spread throughout the city. She said her district, District 1, is gentrifying and currently does not have an affordable housing project.

Council member Stacie Gilmore expressed disappointment that the council still has not been provided financial modeling on how the housing projects would come together. She said in her neighborhood in Montbello, households contain eight or nine people and are multi-generational. She said the proposed sales tax increase would amount to far more than $2 per person per week, as Mayor Mike Johnston has suggested the burden would be for the .5% increase.

Limiting generational wealth?

Gilmore also expressed concerns that deed restrictions on low-income properties would prevent families from accumulating generational wealth. She also wants the affordable housing fund to help people trying to hold onto their homes as well as those buying a home.

The City Council still must approve putting the sales tax question on the ballot. Several council members have expressed concerns about the timing of the proposed tax. Another ballot question for November will ask voters for a sales tax increase so that Denver Health can be better compensated by the city for indigent care.