Denver and its housing authority had set a goal of raising $105 million through a bond issuance to be used to boost the city’s affordable housing strategy.
The Denver Housing Authority (DHA) announced Friday that it had surpassed that and closed on the issuance of $129.8 million in Intergovernmental Agreement bonds.
“This is the largest single financing in DHA’s 80-year history and is a clear demonstration of our commitment to being a vital part of the housing solution for” Denver, DHA Executive Director Ismael Guerrero said in a statement, crediting the underwriting team of J.P. Morgan and Stifel Nicolaus.
The proceeds are to be used toward building and preserving nearly 2,500 units of affordable housing, part of Denver’s overall housing goal of adding at least 6,000 units over five years.
DHA said half the proceeds will be spent on housing developments for Denver residents earning no more than 30 percent of the area median income and on housing and support services for people experiencing homelessness. The other half will be used to speed delivery of nearly 1,300 housing units that DHA had already planned to build, completing in five years what would normally require at least 10 years, Guerrero said.
The city had pledged an existing half property tax mill to DHA, giving it a stable source of revenue on which to make a case for borrowing, which is what issuing bonds amounts to. S&P Global Credit rated the DHA bonds AA+.
In a statement Friday, Mayor Michael Hancock called DHA “a critical partner” in addressing the city’s housing needs.
Partnering with DHA on this bond issuance had been one of the strategies Hancock had laid out last year when he announced a plan to double the dedicated affordable housing fund from $15 million to $30 million. Marijuana taxes and appropriations from the general fund also were raised.