Denver is facing a critical shortage of affordable housing, with Mayor Mike Johnston proposing a 0.5% sales tax hike to raise about $100 million annually. This measure is aimed at addressing the housing crisis in the city and providing a solution for nurses, first responders, teachers, seniors, and working families who are struggling to afford living in Denver. The city council approved the tax hike with a 9-4 vote, giving Denver voters the opportunity to directly impact the affordable housing situation.
Initially proposed for a 30-year duration, the council decided to extend the tax increase to 40 years. This extension provides flexibility in financial planning and allows for potential bonding against the tax revenue. According to Council Member Amanda Sawyer, this option not only enables bonding but also leaves room for refinancing the bonds in the future to save on interest costs. The decision to extend the duration of the tax increase reflects a strategic approach to tackling the affordable housing gap in Denver.
Council Member Kevin Flynn raised concerns about the cumulative impact of multiple tax hikes on Denver residents. With a potential total sales tax rate of 9.65%, Denver would have one of the highest sales tax rates among non-resort cities in the state. Flynn emphasized the need to balance affordability with revenue generation, stating that simply raising the cost of living in Denver may not be the most effective solution. The proposed tax increase for affordable housing must undergo further scrutiny and refinement before being presented to voters.
Mayor Johnston highlighted the significant gap in affordable housing units in Denver, with projections indicating a shortage of 44,000 units by 2033 for households earning below the area median income. The proposed tax increase for affordable housing, along with a separate tax hike for Denver Health, demonstrates a comprehensive approach to addressing critical needs in the city. By leveraging tax revenue for essential services like housing and healthcare, Denver aims to create a more sustainable and inclusive urban environment.
In addition to the proposed tax hikes, Denver is also considering an expansion of the Denver Downtown Development Authority’s scope and bonding ability. This measure would allow for financing of public facilities and improvements through incremental increases in sales and property taxes within a specified area. The expansion of the Development Authority’s capabilities aligns with the city’s long-term vision for growth and development, ensuring that Denver remains a vibrant and prosperous community.
Overall, the proposal for a sales tax hike to fund affordable housing represents a crucial step towards addressing Denver’s housing crisis. By engaging voters directly and exploring innovative financial mechanisms, the city is taking proactive measures to create a more equitable and sustainable living environment for all residents. As Denver navigates the complexities of urban development and growth, collaborative efforts between the government, private sector, and community stakeholders will be essential in shaping a resilient and inclusive city for the future.