Denver city leaders are proposing a mix of higher property taxes and developer fees to pay for an ambitious affordable housing plan.
If approved, more than $150 million will go toward income-restricted rentals and for-sale homes benefitting the homeless, the very poor, and even moderate-income residents who struggle to afford housing.
Mayor Michael Hancock's proposal calls for an increase of 0.5 mills on city property tax bills over the next 10 years. This amounts to $145 more for each $1 million of property valuation each year.
In addition, developers would pay a range of new impact fees when they obtain building permits. The proposed fees would be assessed by square foot. For example, the cost would be:
$1.70/sf for hotel, office and retail
$1.50/sf for multifamily complexes
60 cents/sf for new single-family and duplexes
40 cents/sf for industrial and other uses
Developers would have an option to build affordable housing units rather than paying the fees. The new fees would replace the city's Inclusionary Housing Ordinance, which requires developers building 30 or more condos to set aside 10% for low income buyers.
The mayor and city council can approve the property tax hike without a public vote. That's because residents approved Measure 2A in 2012, which freed the city from the spending caps in the Colorado Taxpayer's Bill of Rights.
In releasing details of the plan, Hancock said, “We can’t afford not to do this. This risk is too high, and the status quo isn’t an option anymore. This is a fair and balanced approach. We tried to make it as simple as possible. It’s equitable, and it’s a communitywide approach so that everybody can participate in addressing this very critical issue in our city.”
A final council vote is expected by the end of August. If approved, the property tax increase and new development fees will take effect January 1, 2017.