DENVER – The City of Denver wants to double the amount of money it spends on affordable housing every year and part of that plan involves raising taxes on marijuana sales.
The city announced on Monday a new partnership with the Denver Housing Authority that would involve boosting Denver’s affordable housing fund to $30 million annually and issuing more than $100 million in bonds to support more affordable housing over the next five years.
“We can all agree – more resources are key to addressing this challenge,” Denver Mayor Michael Hancock said. “The Housing Authority has been a trusted partner in building and preserving high quality affordable homes for those who need them, and this partnership will allow us to do more, faster for residents who are working hard and need support.”
To double the housing fund, the city proposes contributing an additional $7 million every year from the general fund and then raising Denver’s marijuana sales tax from its current rate of 3.5 percent to 5.5 percent, generating an additional estimated $8 million per year.
About half of the doubled housing fund will directly support those who are the most burdened – people making 30 percent of the area’s median income or less and those who are homeless – while the rest will go toward the city’s goals as outlined in the five-year housing plan.
The additional revenue from raising the marijuana tax will be used to offset the existing property tax mill, which will be allocated to Denver Housing Authority under the proposal. DHA will then issue $105 million in bonds to build and preserve affordable housing units in the city and also acquire land for future construction.
In all, the city estimates it will create or preserve 6,400 homes over the next five years, more than doubling current estimates.
The proposal isn’t a done deal yet – several items, such as raising the marijuana tax, will require action from Denver City Council before they’re put into place.