CAPITOL RECAP
NANCY BURKE | COLORADO APARTMENT ASSOCIATION
Denver's Affordable Housing Fund Proposal Adopted
T
he Denver City Council voted to adopt
a proposal by Councilmembers Kniech
and Brooks to create a fund to raise
$155 million over ten years to support
affordable housing on September 19, 2016. This
fund was created to assist the City in obtaining
and preserving affordable housing options. Over
the past year, the City has analyzed cities including Boston, Seattle and San Francisco to determine best options for Denver. Denver's goal is
to create 6,000 new affordable homes over the
next ten years.
The adopted proposal will use one half of a
mil from property taxes (approximately $6 million)
supplemented by an impact fee on all new construction to meet the $15 million per year goal.
Apartment developers, under this new ordinance
are now required to pay an impact fee of $1.50
per square foot, at the time of permitting, beginning in January 2017.
Although leaders in the multifamily housing
industry supported creating an affordable housing
fund for the City, the assessment of an impact fee
was strongly opposed. Any additional fee on new
development will slow and lessen multifamily
housing development and will ultimately be a
factor in rent increases, which will have the opposite effect of what the City is seeking.
Multifamily developers are scrambling to
create the much-needed housing supply for the
market. Under this proposal, if adopted, several
developers have stated that many of their
plans to produce additional supply would
be stifled.
Despite months
of stakeholder meetings and lobbying
efforts through a
strong coalition representing business
interests and the developer community,
along with assistance from professional local lobbyists, work to find a more feasible and reliable
alternative to the impact fee, fell short.
Four amendments to the bill also passed which
included a reduction of time for possible increases of the impact fee from five years to three years,
a technical change on AMI limits, the creation
of an action plan to outline funding availability
through all programs within the City along with
proposed expenditures to be submitted to City
Council for approval, and after much discussion,
a ten year sunset provision for reevaluation of the
necessity to continue the fund.
During the process, an alternative proposal
was offered by Councilwoman Black, which included first year funding to come from Colorado’s
booming marijuana market. (Last year, the City
of Denver brought in $29 million dollars through
marijuana sales tax). Another proposal offered
using general fund dollars for one year to allow
time for research and discovery of realistic, feasible funding sources that would not have the
detrimental effect of increasing housing costs. In
the end, both of these proposals were killed.
AAMD has separately proposed a unique program to Denver elected officials and the administration in which multifamily housing providers
could voluntarily offer a portion of existing units
to the City to convert into “affordable housing” in
exchange for tax breaks. This allows for affordable
integration and assists the City in obtaining their
affordable housing goals much faster than with the
three year construction time frame.
For more information, contact Nancy Burke, VP of Government and Community Affairs at 303-548-3193 or at
[email protected].
Denver Renter's Day of Action 2016
Several organizations from across the
Denver metro area joined forces
Thursday evening during National
Renter's Day of Action to voice their
dismay on rising rents and housing
costs. Protestors marched from the
Denver City and County building to the
State Capitol, chanting "Rent Control
Now."
As land prices continue to increase,
workforce for construction projects
becomes increasingly scarce, lending
availability diminishes due to new
requirements placed on financial
www.aamdhq.org
institutions, topped with increased
regulatory burdens such as impact fees
on new developments, we are certain to
continue seeing an upward trend in
housing costs.
Because of this, the multifamily
housing industry will assuredly face
legislation that will address housing
affordability in the months to come.
For more information, contact Nancy
Burke, Vice President of Government
and Community Affairs at 303-548-3193
or [email protected] .
OCTOBER 2016 • TRENDS | 27