Denver aims to double affordable-housing fund with pot-tax hike
Author: Joey Bunch - August 8, 2018 - Updated: August 9, 2018
A Denver City Council committee on Wednesday advanced an affordable-housing plan that depends on raising the sales tax on recreational marijuana.
Mayor Michael Hancock’s office said raising the city’s retail marijuana tax rate from 3.5 percent to 5.5 percent would allow Denver to increase its Affordable Housing Fund from $15 million to $30 million a year.
That would help pay for the cost of building, preserving or acquiring land for more than 6,000 affordable homes over the next five years.
Denver defines housing as “affordable” if the monthly rent or mortgage payment, plus utilities, amount to less than one third of gross household earnings.
The Safety, Housing, Education and Homelessness (SAFEHOUSE) Committee on Wednesday passed two ordinances, one to raise the pot tax (while also removing a sunset provision in the Affordable Housing Fund) and another to allow an agreement between the city and the Denver Housing Authority. If approved, the tax increase would take effect Oct. 1.
“Affordable housing remains a primary challenge to our residents and families, and this proposal will produce more affordable homes quicker to deliver housing Denver families need and can afford,” Hancock said in a statement. “I want to thank the SAFEHOUSE committee for advancing this proposal, as well as the Housing Authority and our community and marijuana industry partners for coming together for Denver’s people and provide more funding to address this critical need in our city.”
The Marijuana Industry Group, a Denver-based trade association, supports the plan because it “cares about the communities where we live and operate,” said executive director Kristi Kelly.
“Lack of affordable housing is a serious issue for people living in Denver,” she continued in a statement Wednesday.” The city was transparent about their efforts to solve the problem, and our group deliberated the proposed tax increases against already high taxes, and the need to keep prices at a level that continues to incentivize purchasing at legal, licensed and regulated establishments. We’re just a small part of the larger economy, and while cannabis is not the cause of this issue, it can be part of the solution.”
The ordinances will be heard twice by the full City Council — on Aug. 20 and final reading on Aug. 27.
Half of the new money in the Affordable Housing Fund would go toward helping those considered homeless or “very low-income” families and individuals, the city said. The rest would go toward helping working families, longtime residents struggling to stay in their homes or first-time homebuyers, Hancock’s office said.
DHA executive director Ismael Guerrero called it a creative funding opportunity to address much-needed affordable housing for those individuals and families.
“This collaboration underscores the city’s and the Housing Authority’s commitment to deliver real solutions for Denver residents most impacted by the high cost of housing,” he stated.
Hancock’s office said in a press release that since he took office in 2011, the city has not only launched Denver’s first Affordable Housing Fund but also built or preserved more than 5,000 homes for those struggling to keep up.
Westword reported last month that Denver County has the second-worst home affordability of 432 metro counties nationwide as median home prices have soared 215 percent over the last nine years as wages rose only 17 percent.
Meanwhile, Denver’s homeless population rose last year, according to a report released in June by the Metro Denver Homeless Initiative. The “point in time” survey on Jan. 28 found 5,317 persons who were identified as homeless in the seven-county metro region, up 201 people from the year before. Denver County was responsible for 3,445 of those, about 65 percent of the total.