Denver City Council on Monday unanimously gave preliminary approval to a plan put forth by Mayor Michael Hancock and council members Albus Brooks and Robin Kniech to create a fund for affordable housing. An alternative funding plan, proffered by councilman Christopher Herndon, slipped through in a 7-5 vote.
Both plans will be considered for a final vote on Monday, September 19th.
The administration’s plan calls for a half-mill levy on city property taxes and a fee on new development, which would raise on average $15 million per year.
Citing concerns about levying too many costs on Denver residents as well as a sense that the proposed plan simply was not bold enough, Herndon proposed an alternative that would draw $20 million from city’s general fund for affordable housing in 2017. Council would then work with the Mayor’s office to find new funding sources in the early months of 2017. The alternative plan also includes a contingency plan wherein, should council fail to find alternative sources, the mill and development fee would kick in next October.
Criticism of Herndon’s alternative proposal was primarily rooted in a sense of urgency about improving Denver’s affordable housing situation as soon as possible.
Councilwoman Stacie Gilmore talked about a constituent who had come to her office, young children in tow, weeping because she couldn’t find housing she could afford.
“We need to do something now,” Gilmore said.
Kniech said postponing the affordable housing fund would cause it to compete with other city services. She emphasized that in the plan’s development phases, community members specifically requested a permanent, independent fund for affordable housing.
Still, some council members questioned whether the scale of the administration’s fund would put a dent in Denver’s housing crisis. Hancock’s $150 million plan is on a 10-year track, meaning that it would raise only $15 million per year.
To put that number in context, developers are currently working on a 197-unit affordable housing complex on Morrison Road that is projected to cost $42 million. Given that the city needs about 80,000 more units of affordable housing each year, Hancock’s plan seems to be “a drop in the bucket,” as Councilman Paul Lopez has feared.
The administration’s projections estimate that the fund will help build and preserve 6,000 new units over ten years. About 87,000 families in Denver are housing insecure, meaning that they pay more than 30 percent of their income on rent or mortgages.
The discrepancy between those two numbers hasn’t escaped council members’ attention. Most have acknowledged that they would like to provide more help to Denver’s housing-insecure, both in Monday’s meeting and throughout the summer.
Councilman Rafael Espinoza voiced grave concerns about failing to meaningfully improve conditions. “[The administration’s plan] is just perpetuating the status quo, and the status quo is not working,” he said.
According to a Wharton Business School study, affordable housing units can cost up to 30 percent more to build than market-rate projects in the same areas because publicly-funded buildings have certain additional required features like energy efficiency and high-quality materials.
One thing is undisputed — there is no incentive for private companies to build affordable units in Denver without support from the government. The city has even become a model case for the challenges growing cities face. The Urban Institute created an online simulator that shows users what an impossible undertaking it is to try to build an affordable housing project in Denver.
Photo Credit: HopeCommunities, Creative Commons, Flickr