Denver voters will see 0.5% affordable Denver sales tax on the ballots in 2024

Voters will have their say on the largest dedicated sales tax in Denver history this November, after the City Council on Monday put a 0.5% tax increase up for vote aimed at significantly increasing the amount of affordable housing in the city.

The 13-member council voted 9-4 to send the tax to voters. Now it’s up to residents of a city that has quickly become one of the least affordable housing markets in America to decide whether or not to add that half percent to the city’s existing 8.81% tax rate.

“Now is the time to act,” Councilman Darrell Watson said before voting with the majority.

How exactly the estimated $100 million in new annual tax revenue the measure is expected to generate — if voters pass it — will be invested each year has yet to be determined.

Mayor Mike Johnston and council supporters have talked about investing in programs like rental assistance to keep people stabilized and down payment assistance to help lower-income Denverites buy into the marketplace and build wealth. The mayor has even floated the idea that the city could become an equity investor in new developments, giving city leaders direct control over the number of affordable apartments in new buildings and the prices at which rents should be set to maintain them. affordable for people at the bottom of the income spectrum.

Among the flurry of last-minute amendments the council adopted Monday night was a change that clarified the council’s role in reviewing and approving the fund’s first-year spending plan in January and strengthening the council’s authority to prioritize plans for approve financing. future years.

Even some council members uncomfortable with that lack of clarity said they see the deep housing needs in their districts and are willing to let voters decide.

“I will support it if it goes to the voters, but we have to be honest; There are good intentions, but the clarity and specificity is not,” Councilmember Jamie Torres said before casting her yes vote.

Torres was the only member to change her vote after the council held a public hearing and preliminary vote last week. The ballot referral measure passed 8-5 on that first reading, with Torres among the dissenting minority.

She was one of several members who wanted assurances that tax revenue would be used to support Denver residents, who research shows are most in need of more housing in their price range, those making 80% of the median income earn in the region or lower. The median income – or AMI – for Denver in 2024 will be $130,400 for a family of four or $91,280 for an individual, according to a chart prepared by the city’s housing department.

Concerns about the limits of the average income in the region were also addressed via an amendment on Monday. The change required the city to use the dollars generated by the tax only to support projects and programs that serve renters earning 80% of AMI or less. Certain mixed-income projects may still qualify for assistance from the fund if the average cost of units in that project is available to tenants earning 100% of AMI or less.

The third major change council members approved Monday was the installation of a sunset — or expiration date — for the tax. Without intervention from the City Council or voters, the sales tax — dubbed the Affordable Denver Fund by its supporters — would end on December 31, 2064, 40 years from now.

Even with that distant sunset date included, four council members declined to support sending the measure to voters. Kevin Flynn, Flor Alvidrez, Stacie Gilmore and Amanda Sawyer all voted against.

Gilmore in particular criticized the process by which the tax measure reached the City Council, saying there was not enough public input. She worried that raising taxes would further burden low-income Black and Latino families in her far northeast district.

Flynn has opposed the tax increase before it was even officially unveiled by the mayor at a press conference on July 8, just seven weeks ago.

“I think we need to stop talking about making Denver affordable by raising the cost of living here,” he said.

The Affordable Denver Tax will appear on the ballot alongside a 0.34% sales tax increase that the council has already approved sending to the ballot to raise money to shore up finances for Denver Health, the struggling social safety net hospital of the city. If both taxes are approved, Denver’s cumulative sales tax rate would jump to 9.65%, one of the highest in the state outside of select mountain communities.

But even council members who were concerned about these two competing measures — like Council Member Chris Hinds, who received life-saving care at Denver Health — recognized that having stable housing is a social determinant of public health.