A Denver ordinance requiring developers to include affordable units in their housing projects or pay an opt-out fee is getting an overhaul this year.
But City Council members have different opinions over the best way to change the law.
Councilman Chris Nevitt on Tuesday said he had reservations about a push by Denver Mayor John Hickenlooper’s administration to raise income-eligibility requirements for those who end up owning the units. Nevitt said he feared such an increase would end up cutting the poor out of the program while helping those who don’t need it.
“We’re searching where the light is good,” Nevitt said of the administration’s approach. “Not where we’ve lost what we need.”
Councilman Charlie Brown said developers may need the increase to allow them to recoup some of their costs. He added that the program currently isn’t helping “working families” and is riddled with flaws but is better than what once existed. He said that before the ordinance was adopted, council members negotiated on their own with developers over what percentage of a development should have affordable housing, a process he termed “legal blackmail.”
The “inclusionary housing ordinance” was adopted seven years ago as a way of promoting diverse neighborhoods throughout the city and is modeled after other laws in about 130 other cities.
The ordinance requires developers to set aside 10 percent of their for-sale units at a price below what the market normally would fetch so that lower-income families can afford them. The price of the units is set on a sliding scale, depending on the income of those for whom the units are built. Developers can opt out of the program by paying a fee.
The ordinance hasn’t worked as originally planned, Jeff Romine, the chief economist and strategic adviser for the Denver office of economic development, told council members during a briefing Tuesday.
Romine said developers universally have opted out of building the affordable units when confronted with having to build downtown, where land is pricey.
A draft overhaul would allow builders to count as affordable those units that are built and then sold to a family of four making as much as $83,600.
Romine said city staffers still can barter with developers and require them to target the units for lower incomes, depending on the area. He said the new, higher-income requirements would apply only to specific areas, such as downtown, where the program hasn’t worked.
The overhaul also would exclude certain areas of the city from having to comply with the ordinance if two-thirds of the housing in that area already is classified as affordable.
Councilman Rick Garcia, who is steering the proposed overhaul of the ordinance through the committee process, said he plans to bring a final proposal to the rest of the council in about 30 days.
Christopher N. Osher: 303-954-1747 or cosher@denverpost.com
