Denver announces intent to purchase 95-unit hotel to shelter people experiencing homelessness

The city of Denver announced on Thursday plans to purchase and renovate a hotel in the city’s Central Park neighborhood to be used as shelter for people experiencing homelessness. 

The Stay Inn Hotel, which currently has 95 units, is located at 12033 E. 38th Avenue in northeast Denver. For now, the space will be used as non-congregate shelter space, pending approval from Denver City Council, with the goal of it being operational by the end of 2021. Two people could be accommodated in each room, according to a city spokesperson.

The hotel ultimately will not increase the number of beds available within the city’s shelter system, but will replace a small portion of the capacity that was created during the pandemic. The city used federal emergency funds to provide around 800 hotel/motel rooms for people that are especially vulnerable to the coronavirus.

If approved, it would be the first time the city has purchased a hotel for shelter purposes. Other U.S. cities have done so throughout the pandemic to address homelessness and provide spaces for people to isolate during the pandemic.

“This will help us fill some critical needs while we continue to build housing,” said Britta Fisher, Denver’s chief housing officer and the executive director of the city’s Department of Housing Stability.

The ultimate vision for the space is to create an undetermined number of supportive housing units — which couples affordable housing programs with substance use and mental health treatment — to serve an estimated 150 people. But those plans are potentially years away, according to Fisher.

Rep. Diana DeGette, who represents Denver as part of Colorado’s 1st Congressional District, announced during a media briefing on Thursday that she has requested $2 million in federal funds to help jumpstart the effort to buy the hotel.

The hotel will cost about $7.8 million to purchase, according to Fisher, despite city records showing the property’s value to be approximately $3.2 million. The price is more than doubled because the current owner has made significant improvements and plans to do more before selling, Derek Woodbury, a spokesperson for the Department of Housing Stability, said.

Fisher said the purchase and operation of the facility will partially be funded by the Homelessness Resolution Fund, which was passed by voters in the fall.

DeGette’s congressional funding requests also includes $10 million to help Urban Peak, a youth homelessness provider in Denver, renovate and expand its facility; $2 million for the Colorado Coalition for the Homeless’s Stout Street Recuperative Care and Legacy Lofts Project; and $1.4 million for the city’s Montbello FreshLo Project, which would help fund the construction of 97 units of affordable housing.

“We need to continue to do a deep dive to look and see what causes this crisis in the first place,” she said. “We have to identify what’s putting people on the streets, and we have to work at every level of government to fix it.”

The city estimates that more than 4,000 people are living on the streets in Denver on any given night. It’s unclear how much the Denver metro area’s homelessness crisis has worsened throughout the pandemic. Denver and many major cities across the country skipped their annual count of unsheltered people this year due to safety risks related to the pandemic. The “point-in-time survey” was originally scheduled to occur in February. 

Lack of affordable housing a main driver of homelessness crisis

Nationally, Colorado ranks 42nd for having the lowest number of available affordable housing units for low-income households that live below the poverty level or are forced to spend more than 30% of their income on housing costs, according to a recent report by the National Low Income Housing Coalition, a research and advocacy organization.

A person who earns minimum wage in Colorado needs to work a total of 71 hours per week to afford a fair market, one-bedroom rental home, according to another NLIHC report. In the Denver metro area, the fair market rent for a two-bedroom unit is $1,566, according to the U.S. Department of Housing and Urban Development.

John Parvensky, president and CEO of the Colorado Coalition for the Homeless, said he’s excited for the pending federal support but added that significantly more investment is needed to bring it back to the level that was provided in previous decades. 

“To really get a handle on homelessness and to reduce the impact of street encampments, which really does a disservice to neighbors, to businesses and the people who are forced to live in them, we really need to double that investment,” said Parvensky, who has worked on homelessness issues since 1985, during the briefing.

“We feel optimistic and we appreciate the support and we’ll do everything we can to work with the city, work with our counterparts in terms of their emergency shelter community, and really create the housing and the long-term health and mental health services that are needed to prevent an end homelessness here in our community,” he added.