Recently, Mayor Mike Johnston of Denver proposed a plan for a sales tax hike to fund affordable housing in the city. This proposal is aimed at increasing the sales tax by 0.5% in order to generate approximately $100 million annually. This initiative comes shortly after the city council’s approval to place a 0.34% sales tax hike on the ballot, which is intended to raise an estimated $70 million per year for Denver Health. If both tax hikes are approved by voters, the city’s total sales tax rate of 8.81%, including Colorado’s 2.9% portion, would rise to 9.65%.
Mayor Johnston emphasized that the funds raised from this sales tax hike would be used to create and maintain affordable housing in Denver. He highlighted the dire shortage of affordable homes for both long-time residents and newcomers to the city. According to the mayor, taking action now is crucial to prevent the affordability crisis from escalating further. The Affordable Denver Fund aims to address the housing needs of Denver residents and establish a community where everyone can thrive, especially those who work in essential roles within the city.
Denver already has existing funding sources dedicated to affordable housing. The Affordable Housing Fund, established in 2016, raises approximately $42 million annually through a 0.5-mill property tax and a one-time fee on new developments. In addition, voters approved a 0.25% sales tax increase in 2020, generating around $50 million per year for the Homeless Resolution Fund. Furthermore, revenue from a proposition passed by Colorado voters in 2022 is directed towards the State Affordable Housing Fund, contributing to Denver’s efforts in addressing the housing crisis. The Denver Housing Authority secures bonds that are paid off with revenue from financed properties.
Denver Health, the primary safety net healthcare provider in Colorado, has expressed the need for additional funding to meet the increasing healthcare demands and escalating costs of uncompensated care. The proposed sales tax hikes for affordable housing and healthcare are crucial steps towards ensuring the well-being of Denver residents and addressing pressing issues within the city.
Mayor Mike Johnston’s proposal for a sales tax hike to fund affordable housing in Denver reflects the city’s commitment to addressing the affordable housing crisis and improving the quality of life for its residents. By investing in affordable housing initiatives, Denver aims to create a more inclusive and sustainable community for all its residents.