The Denver City Council will vote Sept. 12 whether to create a permanent affordable housing fund whose revenue sources would be a 0.5 mill property tax and a “linkage” fee assessed on most new development. A draft ordinance establishing the fund was approved by a Council committee 7-0 on Aug. 24 and referred to the full Council for action. The tax and fees would begin January 1, 2017.
A competing ordinance, prepared by Council Member Chris Herndon failed to get out of committee when a motion for approval died for lack of a second. Herndon’s proposal would have authorized creation of the fund but leave identification of revenue sources to discussions this fall as the Council formulates the 2017 city budget.
The fund is projected to generate $156 million in its first 10 years with revenues split roughly equally between the property tax and linkage (builder) fee. The fee would range from $0.40-$1.70 per building square foot, imposed at time of building permit. Year one spending priorities proposed by the administration include $9.4 million for 533 new affordable units, $3 million for land acquisition, and $1.5 million for emergency housing assistance. Actual spending decisions would be made by the city administration with input from a 23-member advisory committee yet to be formed.
At its Aug. 25 meeting, the Stapleton Development Corporation (SDC) discussed a draft resolution prepared by the Housing Diversity subcommittee of the Stapleton Citizens Advisory Board (CAB) that calls for the city to not exempt developments such as Stapleton from the linkage fee. The city has told the Front Porch that Stapleton would be exempt from the linkage fee because of the Affordable Housing Plan agreed to in 2001 between the city and Forest City. The property tax, however, would be enforced on all properties in Stapleton. This has raised the specter of property taxes collected in Stapleton but spent elsewhere in Denver for affordable housing while builders in Stapleton would be exempted from the linkage fee.
A working committee of SDC and CAB will be formed to study the Housing Diversity committee resolution. Because of the city schedule for action on the ordinance, CAB and SDC will address a formal vote on the resolution either by email vote or at a special meeting. Issues to be addressed by the two groups include: whether the city could exempt residential but not commercial projects from the linkage fee; a “fiscal analysis” that compares the subsidies that Forest City has been providing for affordable housing to the revenues that could be generated in Stapleton under the proposed ordinance; and a legal analysis as to whether the linkage fee could be imposed within Stapleton without undermining the existing affordable housing plan agreed to by Denver and Forest City.