Mayor Mike Johnston’s affordable housing sales tax is headed to voters this November.
City Council approved a ballot measure that, if passed by voters, would dedicate $100 million a year to affordable housing using a .5 percent sales tax. Council voted 9-to-4 on Monday in favor of sending the sales tax to the voters, despite lingering concerns over a lack of detail in the ultimate plan.
The sales tax will sunset after 40 years, a last-minute amendment passed 12-to-1 by City Council on Monday over fears of overreach and an inability to know what the housing market will look like decades in the future.
“In the early 2000s we allowed developers to take advantage of our upcoming communities, displacing me, displacing my family, my community,” said Councilmember Serena Gonzales-Gutierrez, who voted yes on the measure. “We needed to take control of the issue long, long ago. We are trying to pick up the pieces.”
In a statement Monday, Johnston called putting the sales tax on the ballot “an important step forward to ensuring all Denverites can live and thrive in our city.”
“We are thrilled and grateful to see City Council officially put Affordable Denver in the voters’ hands,” Johnston said.
Councilmembers Flor Alvidrez, Kevin Flynn, Stacie Gilmore and Amanda Sawyer voted no on the measure. They had concerns that the ballot measure, with its numerous amendments, was half-baked without a clear plan for the money.
Gilmore said she asked the Mayor’s office to hold the plan until the spring to work out more of the details.
“I'm still going to be a no on referring it to the ballot because I take my responsibility of good governance really seriously, and I can't explain what this is going to look like to my constituents,” she said.
The plan, titled Affordable Denver, was designed to create or preserve 44,000 units of income-restricted housing over the next decade.
Johnston pitched the measure in early July. He was flanked by a who’s-who of community organizers and nonprofit leaders across the city, along with Councilmembers Shontel Lewis, Sarah Parady and Darrell Watson.
The mayor had just under two months to convince City Council to put the measure on the ballot.
“Denver can’t afford to wait,” Johnston said when announcing the campaign.
His hope is the tax would create affordability and prevent displacement, even as Denver’s economy grows.
The new sales tax would build housing for teachers, waiters, firefighters, and other workers and middle-class people who have been struggling to afford the city. It would also nearly double the amount of housing Johnston pledged to create in his campaign.
“What we know is if we do nothing, 10 years from now, all of those Denverites will be gone,” he said. “They will have been pushed out or priced out or moved out to someplace else. And that is a future we refuse to accept.”
And Denver really needs affordable housing.
An annual report released last week found that overall homeless in Denver and the surrounding metro area rose by 10 percent compared to last year.
The sales tax would grow housing, not pay for homelessness services. But in interviews with Denverite, nonprofit leaders attributed the persistent rise in Denver’s homelessness to a continued lack of affordable housing in the area.
Affordable housing is something voters care about as well.
In the spring, Colorado Public Radio and other media outlets surveyed Coloradans statewide through the Voter Voices survey. Affordability is a top concern among residents of all political persuasions.
At its State of the City event, Denver Metro Chamber of Commerce members identified housing affordability, along with childcare, as two of the area’s greatest needs.
When Denverite interviewed more than 100 residents about their big concerns in the city, housing affordability topped the list.
And a recent bipartisan poll from the Colorado Health Foundation found that more than 70 percent of Denverites fear the lack of affordability will force them to leave Colorado. Nine in ten parents worry their children won’t be able to afford life here.
Despite the widespread belief that Denver lacks affordable housing, not everyone has bought that Johnston’s plan is the right one.
Some critics have argued the tax is regressive, putting the burden of funding the new housing on working people who need their money.
Voters will already be deciding on a .34 percent sales tax to fund Denver Health, the city’s safety net hospital that has faced huge funding shortages in recent years.
That’s on top of the numerous other sales tax increases Denver voters have approved in recent years, amounting to a 30 percent rise in sales taxes since 2018. One of those taxes passed in 2020 was specifically aimed at addressing homelessness.
“How many new added fees and tax increases does it take to make us affordable?” Councilmember Kevin Flynn asked in a committee meeting last month. “That strikes me as counterintuitive. And so I wonder, where does it end?”
Business leaders have been split on the solution. Some are eager for the government to take action and others arguing the city needs to slow down and roll out the plan with more details before taking it to the voters.
Other Councilmembers raised concerns that Affordable Denver doesn’t have enough of the details worked out.
Last week, Councilmembers brought a dozen amendments to the plan. They passed eight of them, including one that would add more Council oversight over how the money is spent.
Councilmembers passed even more amendments Monday, including a plan for how to prioritize using the funds and a compromise with the Mayor’s office to end the sales tax after 40 years.
“At $100 million a year for 40 years, that's $4 billion, so if we can't solve this in a generation and a half and $4 billion, we can't solve this,” said amCouncilmember Amanda Sawyer, who brought forth the amendment.
Another amendment brought by Councilmember Shotel Lewis restricts portions of the funds to housing for people making 80 percent of the area median income, or $102,650 for a family of four in 2024.
The change would allow for mixed-income developments with an average of 100 percent area median income, or $130,400 for a family of four. The bill also includes exemptions for homeowners and buyers making up to 120 percent of the area median income, or $156,480 for a family of four.
That amendment passed 9 to 4, with some Councilmembers concerned that making the fund too restrictive could have unintended consequences decades in the future.
Despite concerns about the details, a majority of Councilmembers decided the housing crisis is too dire to wait.
Voters will make the final call on the sales tax in the Nov. 5 general election.
That’s along with a slew of other ballot measures, including the separate .35 percent sales tax hike to fund Denver Health. Some Councilmembers said they were concerned the affordable housing sales tax could affect the passage of the Denver Health sales tax.
Still, even the Councilmembers who voted yes on passing the measure to the voters expressed concerns about the lack of detail and quick timeline for the policy. They suggested that even if the voters approve the sales tax, more work lies ahead.
“I will support it going to the but we have to be honest, good intention exists, but the clarity and the specificity doesn't,” Councilmember Jamie Torres said. “I will support it. I will work to get that clarity. And if it's not there, I'm here for three more years in this term, then I don't think we keep this fund.”
