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Developers, property owners could help foot bill for Denver's affordable housing crisis

New affordable housing plan in the works
Posted: 9:00 PM, Aug 17, 2016
Updated: 2016-08-17 23:56:58-04

DENVER -- Members of Denver’s Safety, Housing, Education and Homelessness committee met Wednesday to discuss a plan to bring more affordable housing to Denver.

The overall plan is part of the city’s initiative to bring in some 6,000 affordable homes within the next decade. Committee members discussed how to help pay for the $150 million plan.

One of the options includes adding half of a property tax mill and a new development fee beginning Jan 1, 2017.

The property tax would cost an average Denver homeowner around $12 a year.

The development fee would be a one-time fee on new construction and would range from $.40 a sq. foot for industrial projects to $1.70 on retail, hotel and other commercial development.

The fee would also include a $.60 fee on single-family construction and $1.50 per sq. foot on multi-family.

“This development fee is going to cost those developers between one quarter and one tenth less than our inclusionary housing ordinance,” said Robin Kniech, Denver City Council member at-large, “so we absolutely believe that they will be able to build.”

Not everyone thinks the fees are the way to help pay for the plan.

Kathie Barstnar, executive director for the Commercial Real Estate Development Association (NAIOP) in Colorado, told Denver7 they agree about the need to bring in more affordable housing into the Denver market, however, the proposed fees could end up making the problem worse.

In a letter to the council that Barstnar shared with Denver7, the NAIOP in Colorado added:

“Targeting the development community that is responsive to, but not responsible for, the demand for office space misses the mark.”

Barstnar told Denver7 they prefer a full mill levy to cover costs.

They also support Councilman Christopher Herndon’s proposal to use city funding to cover costs for the program during at least the first year and continue to discuss other funding measures during that time.

Barstnar said the added costs could force owners to pass the fees onto tenants, further increasing the housing gap. However, councilwoman Kniech said the development fee is lower than other cities.

“Eighty percent of the housing that this market is building is luxury housing,” she said, “so when they tell me they’re concerned about the fees being increased on home owners, most of the product being built is luxury housing.”

For renters like Sue Digarrow, the idea of Denver getting more affordable housing is encouraging.

“It gives people hope you know,” she said, “just the fact that you see these buildings going up.”

Digarrow just moved into her new apartment at the city’s latest affordable housing project off East Yale Avenue. She pays $350 a month and said she wouldn’t be able to live in the city otherwise.

She waited a year on a wait list to get the apartment.

“I’m so grateful for the opportunity to live here,” she said.  

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