Denver wants to raise $100 million a year for affordable housing through a voter-approved sales tax hike at the cash register.
Leaders in the Mountain High City proposed seeking voter approval for a sales tax increase to help address the city’s growing need for more affordable housing, the Denver Business Journal reported.
The proposed 0.5 percent sales tax increase would have to be placed on the November ballot by the Denver City Council. The overall tax, after the proposed increase, was not disclosed.
The tax would raise $100 million a year to help provide housing for residents “across the income spectrum,” the city said in a statement. The tax increase would work out to 5 cents for a $10 purchase, with exceptions made for food, fuel, medical supplies and personal hygiene products.
The fund would be used to pay for capital projects and for rental assistance programs.
“Denver cannot be a vibrant, inclusive city without ensuring that teachers, nurses, first responders and seniors can continue to call Denver home,” Denver Mayor Mike Johnston said in a statement. “There is a tremendous shortage of affordable homes for long-time residents and new residents alike, and this shortage will only grow if we don’t take action now.”
The measure is co-sponsored by council members Shontel Lewis, Sarah Parady, Diana Romero-Campbell, Amanda Sandoval and Darrell Watson. It must be approved by the full city council before it’s put in front of voters.
If approved, the Affordable Denver Fund would support the development of affordable housing for extremely-low-income, low-income and middle-income households.
The fund would be used to preserve income-restricted units, build affordable apartments and accessory dwelling units, provide project-based vouchers, pay for rental assistance and offer equity for mixed-income developments.
Denver now has an Affordable Housing Fund that generates over $40 million per year, the city said. That fund, launched in 2016, combines property tax revenue and a one-time fee on new development to create and preserve housing across the income spectrum.
Local business leaders say that the lack of affordable housing in the city and across Colorado has become a crisis, according to the Business Journal. Businesses also say that the rising cost of housing has contributed to a state labor shortage.
— Dana Bartholomew
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