Denver city council members raise doubts about mayor's affordable housing plan

Nearly a week after the Denver City Council delayed a key vote on Mayor Mike Johnston’s affordable housing sales tax proposal, it was back before council members Tuesday.

A working group of council members convened to review the proposal in more detail. It also provided them an opportunity to share their concerns about the proposal.

Council members sponsoring the mayor’s plan hope the working group will help them address their colleagues' concerns and develop a better plan to present to voters in the fall.

But it’s clear some council members are still unsatisfied with what they’ve heard and remain skeptical of the mayor’s plan.

Johnston wants to ask voters in November to increase the city’s sales tax by 0.5%, which he says would generate $100 million a year for affordable housing.

“If we want to keep the mom, the grandma, and the college graduate in Denver, we can, but we have to choose it, and we have to fight for it,” Johnston said.

But before it can go to voters, it must first pass the city council. Some council members have raised concerns about a sales tax increase's impact on working-class families.

“I am humbly asking give us the info so I can look my constituents in the face and say I haven’t raised your cost of living,” said Denver City Council Member Stacie Gilmore.

The mayor said his plan would cost the average family $2 a week. But Gilmore doesn’t buy the math.

She said families will pay more when factoring in another sales tax from Denver Health, which has already been approved for the ballot.

“That’s $533 per household on average they would pay out to the city,” Gilmore said.

She said that although some products, such as personal products and gas, are exempt from sales tax, families will still pay more on other expenses, such as when they eat out.

If approved by voters, both tax measures would increase Denver’s sales tax rate from 8.81% to 9.65%, making it one of the highest in Colorado.

Council member Paul Kashmann wants assurances that the money will be spent on those with the greatest need, even after the current mayor leaves office.

“I don’t understand what the problem is,” Kashmann said. “Who the hell knows down the road who we’re handing $100 million to?”

“There’s nothing in the ordinance that requires that the money be spent,” said Anshul Bagga, an assistant city attorney. “The ordinance sets up a fund and assesses a sales and use tax and then has the money going into that fund. But if the money goes into the fund and the city decides not to spend that money, there’s nothing that requires the money be spent.”

Council members are also concerned the mayor’s team hasn’t gotten enough input from stakeholders.

“I’m concerned that we are moving too quickly,” Denver City Council Member Chris Hinds told Denver7 last week.

On Tuesday, the mayor’s office said they have reached out to several stakeholders.

“We know that housing affordability is a top concern for Denverites across the board and at a crisis point for many,” said Jordan Fuja, the mayor’s press secretary. “The Johnston Administration, in partnership with Council sponsors, have spent the last several weeks conducting outreach with stakeholders not just in the affordable housing community, but across sectors and organizations from labor to faith organizations to business leaders. We’re proud to have the support of more than 65 individuals and organizations already, with more rallying around this proposal every day.”

By comparison, Denver Health’s CEO Donna Lynne told Denver7 in June that they spent nine months working with stakeholders on their proposal before presenting it to the city council. They also conducted polling.

“And so that input that we’ve gathered over nine months has really informed the proposal that we presented,” said Lynne.

Denver Health estimates its sales tax will bring in $70 million annually.

Some council members want the mayor to slow down and send his ballot measure to voters next spring. But Sarah Parady, one of the council sponsors of the legislation, said voter turnout is much higher in the fall, and more groups will be able to participate.

“If we want a vote that has as many people as possible in the city represented, including way more renters than tend to vote on our spring ballot as compared to homeowners, younger people, people of color, it’s a very different and much fuller demographic for the city,” said Parady.

Fuja said delaying the ballot measure would come with a cost.

“[The] longer we wait to address Denver’s housing affordability challenge, the more expensive it will get, which is why we are working so diligently to ensure this measure is on the November ballot,” said Fuja.

The council will revisit the issue during a committee meeting on August 7. They have until August 26 to give final approval for the proposal to make November’s ballot.

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