Denver, CO
Denver OKs $30M contract with nonprofit despite questions about agency
A nonprofit that has raised red flags for other cities will begin operating one of Denver’s homeless shelters after the City Council approved a $30 million contract with the group Monday.
Urban Alchemy, a San Francisco-based nonprofit, has been accused of fiscal and data mismanagement, leading one city to drop the organization as a partner this year.
Nine of the 13 City Council members ultimately voted to approve the contract after over an hour of discussion on those concerns in which council members also expressed their exasperation with Mayor Mike Johnston’s office.
“The other option appears to be putting people back out on the street in the middle of winter,” said Councilwoman Amanda Sawyer in explaining her “yes” vote.
Jeff Kositsky, the deputy director of shelter and stability in the city’s Department of Housing Stability, said during the meeting that if the council rejected the contract, there would be no way to find a new provider by the time the contract with the Aspen shelter’s current operator — The Salvation Army — expired.
“I think ultimately we would have to shut the shelter down,” he said.
Only three groups submitted bids to run the city’s homeless shelters when officials put out a request earlier this year, Kositsky said. The other two are Bayaud Works and St. Francis Center, both of which were already selected for other contracts.
Urban Alchemy will begin operating the 289-unit Aspen shelter in Central Park in 2026 and the contract will last through 2028.
Denver officials announced in August that The Salvation Army would no longer operate three facilities in former hotels after the City Council raised concerns that the group was unable to keep its occupants safe. There was a string of violent incidents at the shelters and in March, a Salvation Army employee was charged with sexually assaulting a woman staying at the Aspen shelter.
The Salvation Army will continue to run the Crossroads Center, the Labuth Family Center, the Connection Center and the Harbour Light Center.
In San Francisco, the city controller’s office accused Urban Alchemy of not properly tracking the time its employees worked for the city causing an “increased risk to public funds and client services,” according to the San Francisco Chronicle. The controller’s office later ruled that the group was back in compliance with the city’s standards.
The nonprofit, which gives jobs to formerly incarcerated people, also ran into a conflict with Austin earlier this year. Austin officials wrote in a memo to their City Council that they wouldn’t renew their contract with the group after the nonprofit self-identified staff members who had misrepresented data about people using the shelters, according to the Austin-American Statesman.
Cole Chandler, who leads Johnston’s All In Mile High homeless initiative, said the contract with Urban Alchemy was an unusual, performance-based deal to ensure the work is completed.
“These are new accountability measures that have never existed before and those are specifically in place because council advocated for those,” he said.
The meeting reflected another instance of council members’ frustration with Johnston’s administration. Councilwoman Shontel Lewis, who represents the district where the Aspen shelter is located, said she didn’t feel his team answered her concerns about the group.
“I have been kind, I have been patient, I have been a partner and I have gotten nothing but disrespect,” Lewis said.
Representatives from Urban Alchemy attended the meeting and defended their record, saying they have addressed past issues and fired bad actors in the organization.
“We’re here to be accountable for everything that we do,” said Ian Clark-Johnson with Urban Alchemy. “We want to be accountable and transparent and be judged on the merits of the work that we’re doing.”
The council also considered another $3 million contract with Urban Alchemy to provide community ambassador services Monday. That contract was still being discussed as of 6:45 p.m.
Home prices are falling in Denver and other areas around the nation.
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Scott Olson/Getty Images
A few weeks ago, we asked our readers for ideas and questions for future Planet Money newsletters and podcasts. We got a bunch of great submissions, including an intriguing one from Karl Baumgartner.
Baumgartner is a 29-year-old internal medicine resident in Denver, where home prices and rents have been falling. Depending on which data you look at, the Denver metro area is experiencing one of the steepest — if not the steepest — housing price declines in the nation. Home prices have fallen more than 2% year over year, according to the S&P Cotality Case-Shiller Home Price Index, and even more if you adjust for inflation. Rents have fallen even more dramatically.
“As a renter myself, I am ecstatic about the falling prices,” Baumgartner writes. In fact, he just moved “to a bigger apartment with nicer amenities that I previously couldn’t afford, but now can because rent has fallen.” One of his friends, meanwhile, recently renegotiated her lease for about $500 less per month by showing her landlord that comparable apartments in her area were now going for much less.
“With almost all of my friends being in a similar position at the beginning of our careers with plenty of debt, we are all very excited about the decrease,” Baumgartner says.
So, yeah, falling rents are obviously a win for Denver renters. But Baumgartner is wondering about the broader economic picture.
“We know that negative inflation is bad for the economy in general, and we try to shoot for 2% annual inflation in general. What about negative inflation in the housing market specifically? Are there any downsides to falling prices, or is this just a sign of the market working as it should, with supply finally catching up to demand?”
It’s a great question because economics doesn’t seem to provide a simple answer on whether falling housing prices are good or bad for the economy.
Obviously, falling home prices and rents have downsides for homeowners and landlords. But what about the broader economy?
Sometimes falling housing costs could be a sign that the economy is healthy and the free market is working as economists might hope. Higher prices encourage builders to construct more housing. More supply comes online. Supply comes closer to or may even surpass demand, and housing prices go down. It’s the basic logic behind the YIMBY movement — a pro-housing development effort whose name stands for “Yes In My Backyard” — which argues that housing restrictions have prevented this healthy market process from delivering plentiful and more affordable housing.
Other times falling prices are a symptom of — and sometimes a big contributor to — a community’s economic distress.
So how can we tell the difference?
When falling home prices are bad
Let’s start with a clear bad scenario of falling home prices: Detroit. After years of deindustrialization and socioeconomic problems, Detroit saw a massive drop in population. Between 1990 and 2010 alone, Detroit lost nearly a third of its residents.
Home prices fell by more than 80% during the housing bust of the 2000s.
This wasn’t affordability created by abundance. It was affordability created by economic collapse.
Detroit neighborhoods emptied out and fell into disrepair. At one point, in 2007, houses in Detroit were cheaper than cars. For over a decade, the city has had an official program to demolish abandoned homes and buildings. For many Detroit families, generational wealth evaporated.
TO GO WITH AFP STORY by Joe Szczesny, US-city-Detroit-auto-debt
Curtains flap outside the broken window of an abandoned home December 31, 2014 in Detroit, Michigan. After the largest municipal bankruptcy in US history, Detroit hopes outsiders will see the city’s potential not the history of racial conflict, financial crises and citizen flight that has cut its population in half since 1960. AFP PHOTO/JOSHUA LOTT (Photo credit should read Joshua LOTT/AFP via Getty Images)
JOSHUA LOTT/AFP via Getty Images
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JOSHUA LOTT/AFP via Getty Images
Falling home prices can make homeowners feel poorer and cause them to spend less, a phenomenon economists call the wealth effect, says Daryl Fairweather, chief economist of Redfin.
Eric Zwick, an economist at the University of Chicago Booth School of Business, says the bigger danger from falling home prices comes from debt, as many of us painfully remember from the 2008 financial crisis. If home prices fall enough, many owners can end up “underwater” — owing more on their mortgages than their houses are actually worth.
It was a big contributor to the Great Recession. One reason the economic damage was so severe, Zwick says, was lax lending standards that preceded the crash. Many homeowners took on too much debt assuming prices would keep rising and when they didn’t, they were overstretched.
“ That created a kind of cascade of forced sales, further price declines, more people defaulting potentially, and then spillovers into the financial system, which then affected everybody,” Zwick says.
Wall Street amplified the problem by bundling risky mortgages into securities that spread losses throughout the financial system.
Because of the role that debt plays in the housing market, a big decline in home prices can hurt not just homeowners, but also “businesses that borrow and everybody else,” Zwick says.
Falling home prices can also hurt important economic sectors, like the construction industry. And they can be bad for a city’s tax revenue.
So, yes, falling home prices can have serious downsides, to answer our reader’s question.
When falling home prices are good
But falling housing prices may not always be bad. Just ask Denver renters!
The housing affordability problem has loomed especially large in cities with roaring economies and not much new development to accommodate growing demand to live there.
Economists have long worried that the lack of housing construction in these places has created a kind of economic traffic jam: when workers can’t afford to live where the best jobs are, they don’t move there, businesses struggle to hire, and the economy doesn’t grow as fast as it could.
The economists Chang-Tai Hsieh and Enrico Moretti published research in 2019, which estimated that “stringent housing restrictions” to build new housing in places like the San Francisco Bay Area prevented workers from moving to where they could be more productive. By their estimate, constraints on building new housing lowered U.S. economic growth by a staggering 36% between 1964 and 2009.
Zwick says subsequent research has found that Hsieh and Moretti overestimated the size of that effect on economic growth. Nonetheless, he says, the broader idea is persuasive: housing scarcity in productive areas slows economic growth.
Denver may be a good example. It’s been seeing solid economic growth and job creation, but as local housing advocate Kevin Matthews of Denver YIMBY sees it, the lack of affordable places to live in the city has been holding Denver’s economy back.
Matthews recalls a large Denver employer expressing concern about the lack of affordable housing. “Their business is growing really fast, and they are trying to attract workers,” Matthews says. “I think it has a big effect. If those workers can’t afford to live here, they’re gonna go elsewhere.”
And similar to how higher home values may encourage homeowners to spend and invest more, cheaper rents may encourage renters to spend and invest more.
“If I’m trying to steel man the case for why falling values can be good, it would be that you are freeing up people’s incomes to spend on other sources of investment in the economy,” says Misha Fisher, the chief economist of Zillow. “If people are spending 80% of their income on housing, that’s not leaving a lot left over to spend on other things.”
Cheaper housing could also nudge more people to make decisions that ultimately serve their community and the economy. For example, Zwick suggests cheaper housing might help encourage family formation. When people are less worried about the cost of an extra bedroom or finding enough space for a family, they may be willing to have more kids. Over the long run, that could mean more workers and more taxpayers, which can ultimately benefit the economy.
Researchers have also linked homeownership to higher rates of civic engagement, neighborhood investment, and other behaviors that can improve communities.
How can you tell when falling prices are good or bad?
So how can we tell when a decline in housing prices is good or bad? We talked to a bunch of economists, and we couldn’t find a simple rule, but we did cobble together some important things to consider.
First, why are prices falling? One potentially important distinction is whether the decline in prices is driven by an increase in supply or a decrease in demand. Put more simply: are prices falling primarily because fewer people want to live somewhere, or because more housing is being built?
Fisher, from Zillow, says demand-driven price declines are often a bad sign. “ That’s usually an indicator that something else has gone wrong,” he says. For example, that the economy is cratering, as was the case in Detroit, or that demand to live somewhere is falling for other reasons, like a rise in crime or natural catastrophes.
By contrast, if price declines are in response to an increase in housing supply, that’s “typically a healthier way to keep home prices in check,” Fisher says.
Fairweather, from Redfin, says land values can provide another important clue. “When a city’s economy is struggling and people are leaving, land typically becomes less valuable,” Fairweather says. “ So when Detroit was going through its recession, its downturn, the land value was dropping because Detroit overall as a city was becoming a less attractive place to live in, to do business in,” Fairweather says.
But imagine a different scenario. A city remains economically vibrant, demand to live there stays strong, but developers are allowed to build a ton of housing — including lots of big apartment buildings — to accommodate the growing demand to live there. In that case, land values might rise even as housing prices decline. Why? Because developers are squeezing more housing units onto each parcel of land.
“ You’re making better use of the land,” Fairweather says. “You’re getting the most economic value out of the land. That’s overall a good thing.”
Matthews, the representative from Denver YIMBY, suggested another metric to consider: the “price to income” ratio. This compares the typical cost of housing to the typical income that can be earned in an area. If the cost of housing is falling, but so are incomes in an area, that’s likely a bad sign. But if prices are falling while incomes are rising, that’s a good sign. It means the economy is doing well while housing is becoming more affordable.
Finally, the size and speed of the price decline matters. Most homeowners can handle small or gradual drops. But a sharp, sudden decline can trigger widespread economic distress, foreclosures, and unleash a cycle that can lead to a recession.
Several YIMBYs we’ve spoken to over the years have suggested the least economically disruptive path to housing affordability is for housing prices to fall in real terms, but not necessarily in nominal terms. That means that home values rise more slowly than wages and inflation, allowing housing to become more affordable without requiring a sharp drop in the sticker price of homes that can cause financial distress to homeowners.
We were curious what our sources thought about Denver’s falling housing prices. Many suggested that it’s been driven primarily by an increase in supply. The city has built a ton of new housing units, especially new apartments, in recent years. That is probably a good sign. Although some did mention the in-migration into Denver has slowed while out-migration has picked up steam, suggesting demand to live in Denver has also cooled.
The downtown Denver skyline is seen from the air.
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But none of our sources suggested what was happening in Denver is any cause for alarm. Most Denver homeowners have seen considerable growth in their home values in recent years, and all our sources agreed that the price fall isn’t dramatic enough to push many of them underwater. This is not a Detroit-style housing crash.
Plus, the fall in prices is providing financial relief to Denver renters, like our reader. Denver may represent something close to the version of falling housing costs that economists hope for: housing becoming more affordable without a broader economic downturn.
Congrats, Karl, on that nice, new apartment.
And for the rest of our readers: Have other questions you want us to answer? Send us an email: planetmoney@npr.org
Denver will use $3 million of its contingency fund money to help pay out settlements this year under an ordinance the City Council approved Monday.
The council makes a similar transfer every year, but the amount varies depending on the settlements reached, said Laura Swartz, the spokesperson for the city’s finance department.
“It is difficult to budget for settlements in advance because the amounts and timing can be unpredictable based on each case’s own scheduling, negotiations and court decisions,” Swartz said.
Every year, the city sets aside $2 million for settlements in the budget. Officials request a transfer from the contingency fund for anything needed above that amount. The 2026 transfer brings the amount that will be used to pay out settlements this year to $5 million so far.
This year’s allotment will leave the city with $30.5 million remaining in its contingency fund. The contingency fund is separate in the annual budget from the city’s reserves, which officials have been working to replenish from a recent low point.
The city has been ordered to pay millions of dollars in settlements in recent years related to the Denver Police Department’s actions during the George Floyd protests.
Earlier this month, the council approved about $2.87 million in payments for 13 people who alleged that local police violated their constitutional rights during the 2020 protests.
In April, a federal appeals court ruled that the city must also pay $14 million to another group of protesters, upholding a jury verdict. The city hasn’t yet said how it will pay out that amount.
“The city is contemplating the next steps first and expects to have more to share soon,” Swartz said.
The city has approved a total of $24.2 million for settlements related to the George Floyd protests, according to the City Attorney’s Office. That count doesn’t include the $14 million the appeals court ordered the city to pay in April.
“This is money that we could have used for any other purpose,” Councilwoman Shontel Lewis said during a council meeting. “It represents a missed opportunity.”
The council unanimously approved the contingency money transfer through its consent agenda.
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Courtesy Jonathan Weiner
There’s a semi-controversy brewing in the underground about whether or not banana suits are appropriated concert attire. After the Baltimore hardcore band End It recently directed its audience to rip one such costume off of a fun-loving fan, the dividing lines have been defined — hardcore isn’t so fruit friendly, while metalcore openly encourages dressing however you want for the occasion.
Dance Gavin Dance guitarist-vocalist Andrew Wells confirmed the metalcore ethos, as the long-running band is used to seeing people in all types of garb, particularly bananas, whenever and wherever they play.
“There’s a ton of banana people in our audience,” he says, referencing the group’s recent Warped Tour DC stop that was especially yellow. “I was like, ‘Yo, banana people, you’re welcome here. You’re weird. You’re an outcast. You’re what society deems as weird because you want to dress up in a banana costume. That’s what rock is for.’
“Rock’s historically been since the dawn of time an oasis for the outcasts. You’re welcome here. Come fly your freak flag with us, and we’ll have a good time,” Wells continues. “Honestly, if I played a whole show and everyone was in a banana suit, I would be stoked. That would be sick.”
In reiterating the stance, he calls for everyone in Denver to show up in their banana best when Dance Gavin Dance takes the Fillmore on Monday, June 22. Horse the Band, Wolf & Bear and Novelists are also on the bill.
The metalcore machine — which also includes vocalist-guitarist Will Swan, drummer Matt Mingus and harsh vocalist Jon Mess — is riding high with a twofer of fresh material in 11th studio album “Pantheon,” released in September, and last month’s “Tree City Sessions 3,” another collection of revamped takes on classics and deep cuts.
Wells, who’s been with the band in some capacity since 2015, saw the “Tree City” process as an opportunity to put his spin on some of the older tracks that vocalist Tilian Pearson first laid down, such as “Bloodsucker” from 2018.
Courtesy Dance Gavin Dance
“That was a suggestion from me. I wanted to polish up my higher register and showcase what I could do on the Tilian stuff,” he explains. “That was a song Martin [Bianchini, touring guitarist] and I had written on the ‘Artificial Selection’ album, so we were able to play and record the song that we wrote.”
Looking back also allowed Dance Gavin Dance to forge forward with “Pantheon,” a more reflective album than recent releases, Wells admits.
“It was an opportunity for us as a band to revisit the roots of the band, when the band was playing to 100-cap clubs and it was just this alternative style of music that was very unique and different. Some people hated it, some people loved it, but it was this authentically post-hardcore sound, that come from these roots,” he shares.
“When we were revisiting these older songs and doing ‘Tree City’ and also writing ‘Pantheon,’ it was that full-circle moment of doing what we’re passionate about again, exploring new themes and musical territory and getting back to the roots, so to speak, especially as a collaboration,” Wells continues. “It was all of us in the same mindset together working towards the same goals.”
And in Year 21, the band is the “happiest and healthiest” it’s ever been, as he sees it.
“We’re a group of musicians who’s committed to making the best art that we possibly can,” Wells says. “There’s a perseverance to this band.”
But, he adds, they wouldn’t be anywhere if it wasn’t for the people in front of the stage, dressing up as bananas and whatever else.
“The external factor is our fans,” Wells concludes. “I think the fan’s abilities to rally and support the band and come out to shows can’t be overstated.”
Dance Gavin Dance, with Horse the Band, Wolf & Bear and Novelists, 5 p.m. Monday, June 22, Fillmore Auditorium, 1510 Clarkson St. Tickets are $60.
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