August 20th 2024.
In November, Denver residents will have the opportunity to vote on a proposed sales tax increase that could potentially make a significant impact on the city's affordable housing crisis. The City Council voted 9-4 to refer the 0.5% tax hike to the ballot, leaving it in the hands of the people to decide whether or not to add this half-percent on top of the city's existing 8.81% sales tax rate.
Councilman Darrell Watson, who voted with the majority, emphasized the urgency of addressing the affordable housing issue, stating, "Now is the time to act." The estimated $100 million in new annual tax revenue, if approved by voters, will be used to invest in programs such as rental assistance and down payment assistance for lower-income Denver residents. Additionally, there is talk of the city becoming an equity investor in new developments, giving city leaders a say in the number of affordable apartments and their rental prices.
In a last-minute effort to address concerns and improve the clarity of the proposal, several amendments were added before the council's final vote. One change clarified the council's role in reviewing and approving the first-year spending plan for the fund, while another solidified their authority to approve prioritization plans for future years. Despite some unease among council members about the lack of specificity in the proposal, the majority agreed that the pressing housing needs in their districts outweighed their concerns.
Councilwoman Jamie Torres, who initially voted against the proposal, changed her vote after the council held a public hearing and preliminary vote last week. She was among those who wanted assurances that the tax revenue would primarily benefit those making 80% of the area median income or below. This concern was addressed with an amendment that mandated the funds be used to support projects and programs for these individuals. However, mixed-income developments could still receive support if the average cost of units is available to those making 100% of the area median income or below.
The council also approved a third major change, adding a sunset date for the tax. Without intervention from the council or voters, the sales tax would expire on December 31, 2064. Despite this distant end date, four council members voted against the proposal, citing concerns about the lack of public input and the potential burden on low-income Black and Latino families.
The proposed tax increase will appear on the ballot alongside another 0.34% sales tax increase, which the council has already approved to raise money for Denver Health, the city's struggling social safety net hospital. If both taxes are passed, it would bring Denver's cumulative sales tax rate to 9.65%, one of the highest in the state outside of select mountain communities. However, even those who expressed concerns about the potential competition between the two tax increases acknowledged the importance of stable housing as a factor in public health.
Mayor Mike Johnston, who unveiled the sales tax proposal in July, is confident that the measure will benefit Denver residents if approved. He praised the council for their work in passing amendments that helped refine the proposal, and believes that the proposed fund will make a significant impact in creating affordable housing in the city. He acknowledges that there is still work to be done in addressing the affordable housing crisis, but believes that this proposal is a step in the right direction.
As the November election approaches, Johnston plans to discuss the specifics of the proposal with voters, including the goal of adding 45,000 units of affordable housing and serving people at all levels of need across the city. He also hopes to emphasize how this proposal can help Denver maintain its status as a thriving economic center while ensuring that essential workers, such as teachers, can still afford to live in the neighborhoods they serve. Overall, the mayor is optimistic about the potential impact of the proposed sales tax increase and hopes that Denver residents will support it on the ballot. To stay informed about Colorado politics and the upcoming election, sign up for our weekly newsletter, The Spot.
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