Denver voters to decide fate of affordable housing sales tax increase in November

Come November, Denver voters will decide whether to approve a sales tax increase in order to pay for affordable housing.

The Denver City Council on Monday voted to put the proposal on the November ballot.

The measure, which was proposed by Denver Mayor Mike Johnston, would increase the city’s sales tax by 0.5%. Supporters estimate the sales tax increase would generate $100 million per year for affordable housing.

“This proposal would be used to help close the growing housing gap and create more housing opportunities at all levels, from rental assistance and new permanently affordable units to down payment assistance and mortgage assistance,” the City of Denver said in a statement Monday.

City officials said the money would also help with accessory dwelling units (ADUs) for low/middle-income households, increase investment in mixed-income developments, and preserve existing income-restricted homeownership and rental units.

The proposal received skepticism from members of the Denver City Council’s Safety, Housing, Education and Homelessness Committee, but was ultimately passed on to the full council. During Monday’s city council meeting, some members questioned the timing of the proposal.

“At a time when the cost of living is soaring and families are already burdened with rising property taxes, new sidewalk fees, new trash fees, this is not the moment to impose another fee,” said Councilmember Flor Alvidrez for District 7.

The proposal faced several amendments before a final vote was taken, including a 40-year sunset clause.

“I will say at $100 million a year for 40 years, that’s $4 billion,” said Councilmember Amanda Sawyer for District 5. “So if we can’t solve this in a generation-and-a-half and $4 billion, we can’t solve this.”

According to the City of Denver, recent polling revealed that 90% of Denverites believe the cost of housing is a significant concern. The city also found that it could be short more than 44,000 affordable housing units for low and middle-income people within 10 years, without intervention.

“The heaviest burden on the largest majority of Denverites is housing,” said Councilmember Paul Kashmann for District 6. “And if we can make a dent in easing that, I think it will pale in the increase in the sales tax that we’re asking people to spend.”

The proposal also includes a provision that would allow it to be amended within one year of its passage if needed.

This will be the second measure on the ballot asking Denver voters to increase the city’s sales tax rate. The other ballot measure asks voters to increase the sales tax rate by 0.34% to benefit Denver Health.