Affordable housing data praised by Denver council working group

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The Denver City Council is taking deep dives into affordable housing issues, such as where all the money comes from for such projects.

The council resurrected the Housing and Homelessness Working Group that meets every other week. The group met Sept. 25 and heard presentations from the Department of Housing Stability, or HOST, and the Denver Housing Authority on the vast funding streams and programs for affordable housing.

The city has invested more than $359 million in affordable housing since around the early 1990s, Adam Lyons of HOST said. That has created or preserved 16,052 affordable units.

In addition, the Denver Housing Authority has invested more than $106 million in 2,402 units from 2012 to 2024, according to a presentation to the working group from housing authority CEO Joaquin Cintron Vega. The authority manages more than 4,000 units.

Diverse funding streams

Funding streams are diverse, according to a presentation by Lyons. Some money comes from voter-approved initiatives that created a tax to fund affordable housing. Other times state or federal grants are used. The city in recent years received about $40 million in American Rescue Plan Act, or ARPA funding.

Lyons said that for rental units, local subsidies make up about 12% of the total project funding, known as capital stack. For home ownership, local contributions comprise about 20%, he said.

Council member Stacie Gilmore lauded Lyons for providing the data, calling it “stellar information.” She asked whether capital stacks could be shown to illustrate where the rest of a project’s support came from. Staff said they could provide that. She also asked for data showing how many people were housed per funding stream in addition to the number of units.

Working group chair Sarah Parady echoed Gilmore’s sentiments. “I’ve been dreaming of this slide deck,” she said. “This is just the best.”

Permanent supportive housing proves expensive

Lyons emphasized that permanent supporting housing projects are the most expensive to subsidize, at about $45,000 per unit. Regular affordable rental housing costs about $20,000 per unit, Lyons said, and home ownership projects cost about $35,000 per unit.

Lyons said permanent supportive housing apartment complexes pay exorbitant insurance rates that have gone up 200% in recent years. Such complexes also face increased expenses due to more wear and tear on units, Lyons said.

Smaller developers feel left out

Council member Jamie Torres said smaller developers do not know how to engage with HOST. Lyons said the city is reaching out to those builders as well as those in BIPOC communities and hopes to develop strategies for bringing them into the mix, such as mentorship programs with larger developers. But Lyons said such efforts would result in even higher cost per unit investments.

Torres also said the city should try to get developers who voluntarily build affordable housing to agree to covenants that keep the property affordable housing for a set number of years. Lyons said the city would have to offer the developer something to make it worth their while. “How can HOST support you in a way that makes this covenant worth it to you?” he said developers will be asked.