A week before a Denver City Council committee is set to consider advancing an affordable housing plan, some council members still have concerns about how to pay for it.
Councilman Chris Herndon said during the committee’s meeting Wednesday that he planned to submit a competing proposal for a vote Aug. 24 in a bid to give council members more time to consider different funding options. That is the day the main proposal, which aims to raise about $150 million in the first decade for affordable housing subsidies and programs, is up for consideration after several discussion sessions.
The proposal relies on a combination of higher property taxes, estimated to cost about $12 a year on a median home valued at $300,000, and new development impact fees. The fees have met with protest from some developers and business advocates.
Herndon’s aim is to draw up to $15 million from the city’s flush reserves next year while the council mulls more permanent options. He and other members, including Kendra Black, say the city shouldn’t dismiss marijuana tax money as an alternative.
But for now, Herndon and colleague Stacie Gilmore say they have concerns about increasing the city’s property tax rate by a half a mill in 2017 because they’ve heard concern from older constituents, in particular, about recent double-digit hikes approved by the council for storm drainage and sewer rate fees. Denver Public Schools also has bond measures on the Nov. 8 ballot, and council members are talking about ways to address the city’s sidewalk problems.
“I absolutely agree we need to move forward with this, but this is another hit,” Herndon said about the affordable housing plan. “We are nickel-and-diming this community. … Can we, as a city, fund this out of our own coffers for the first or second year?”
Councilwoman Robin Kniech and president Albus Brooks are spearheading the proposal with Mayor Michael Hancock’s deputy chief of staff Evan Dreyer. All three pushed back against dipping further into reserves and delaying action on their proposals to create dedicated sources for the affordable housing fund. But they said they would take the feedback into consideration.
According to Dreyer, discussions about the 2017 budget, which will be proposed in mid-September, don’t include much leftover reserve money on the scale mentioned by Herndon.
Herndon, though, pointed out that the city dedicated $8 million from reserves to housing this year and could set a priority to increase that amount next year.
The main proposal aims to help create or preserve 6,000 units of income-restricted apartments and for-sale homes over 10 years, but Kniech called that estimate conservative. Some advocates and council members have questioned whether that’s enough to put a dent in the city’s affordable housing problem.
Other questions from council members Wednesday focused on the estimated fruits of the first year of increased spending under the plan, which was detailed for the first time. It calls for the $10 million that’s expected to be raised from the new development fees and property tax to be split between $5.9 million to support projects that produce income-restricted units, $2.5 million for land purchases in gentrifying and “high opportunity” areas, $1 million for emergency assistance for people to stay in housing and $600,000 for administrative costs.
The city estimates that spending would produce or preserve 413 homes and provide emergency assistance to 166 households.
Brooks agreed with several members who pressed for more spending than that next year, perhaps by supplementing the new funding sources — if they’re approved — with reserve money.
“I agree, there is an issue in that first year,” he said. “And we’re going to try to get after that.”
Also Wednesday, Dreyer said the latest estimates based on the city’s modeling put the amount that could be raised from the fee and tax combination at $156.4 million over 10 years, which is up from the most recent estimate of $144 million. Some of that is due from a change to the proposal that would peg the impact fees to increase with inflation.
At the Aug. 24 meeting of the Safety, Housing, Education and Homelessness Committee, only its six members, plus Brooks, will be able to vote on the proposals. Herndon and Black are among those who have participated in the discussions but aren’t on the committee.
