Denver voters in November voted to create a 0.25% sales tax increase to establish a fund dedicated to helping address the city’s homelessness crisis. Now, the city is trying to figure out how to allocate the money.
The new pot of money, called the Homelessness Resolution Fund, can be used for housing development, rental assistance, supportive services and to help expand homeless shelter capacity and available services. Though the total amount of funds available depends on actual sales tax collection, Denver’s Department of Housing Stability estimates the tax will generate approximately $37 million in the first year, and $40 million annually in future years under stronger economic conditions.
“We’re very excited at the Department of Housing Stability to help invest these funds and get these dollars to work in our community,” said Britta Fisher, chief housing officer in Denver’s Office of Economic Development, during a Denver City Council committee meeting on Wednesday.
The ultimate goal of the fund is to establish 1,800 homes with support services over the next 10 years, create 500 to 600 new units of shelter, housing or catalytic projects, regrow lost homeless shelter space, and continue expanding support services for people experiencing homelessness.
Here’s how Denver is proposing to use the funds in the first year:
$9.9 million for COVID emergency response: Support pandemic response including the operations of around 800 motel and hotel rooms for people who are high-risk or have the coronavirus and need to be isolated. These rooms are currently being funded by FEMA, and future funding is uncertain.
$10.5 million for permanent housing support: To help at least 500 households regain housing after entering homelessness. The city plans to use existing housing to do so, according to its website.
$8.9 million for shelter and services: Enable some homeless shelters to operate 24/7 and expand available beds and services.
$1.5 million to support innovative approaches: support creative projects such as manufactured housing, tiny homes, expanded outreach or other services.
$3 million for “catalytic” developments: To acquire and/or develop at least 100 units of housing that provide both shelter and services. (An example of this is the Delores Project in Denver, which houses a homeless shelter as well as 35 units of permanent supportive housing.)
$2.2 million for administrative costs and $1.1 million for reserves: Support for Department of Housing Stability to successfully administer the funds. Unused funds are expected to roll over to the next year.
During the City Council committee meeting on Wednesday, members also heard from Jamie Rife, director of development and communications for the Metro Denver Homeless Initiative, who discussed a report her organization published in October. The report found that 31,207 individuals in the Denver metro area had experienced homelessness between July 1, 2019, and June 30, 2020, which is five times more people than what was reported during the annual Point-in-Time survey in January.
Rife said there is a big public misconception that the main cause of homelessness is mental health or substance abuse disorders. In reality, lack of affordable housing is ultimately to blame.
“What people identify over and over and over again is that there are two main things contributing, particularly in our region, to homelessness and that’s the cost of housing and the loss of a job or a decrease in their hours,” Rife said.
Colorado ranks No. 9 in the country for having the largest gap between renter’s income and housing cost, according to a report by the research and advocacy organization National Low Income Housing Coalition — an issue being exacerbated by the pandemic-related economic crisis.
In 2018, there were approximately 165,567 households considered extremely low-income renters in Colorado, according to the report. There were only 50,627 affordable and available rental homes for individuals and families in the extremely low-income category.
“(There’s) a huge gap between what’s available in our community and what people need versus what we’re actually able to offer at this point,” Rife said.