(The Center Square) — The city and county of Denver is partnering with the Denver Housing Authority to launch a new pilot program with the goal of developing more new middle-income rental housing.
The program will provide tax exemptions to developers for “otherwise financially infeasible projects.”
“This program reflects the kind of innovation we need to solve Denver’s housing crisis,” said Denver Mayor Mike Johnston. “We’re using every tool available to help people stay in the communities they grew up in and make sure working families can afford to live in the neighborhoods they want to.”
The program will enroll five new multifamily developments in 2025.
“Eligible projects must be new construction, meet the affordability requirements, and demonstrate that the development would not be financially viable without the property tax relief and exemption from the state portion of sales and use tax,” said a press release from the city.
In return for the tax exemption (which is capped at 15 years), each development must ensure it provides affordable housing to households earning less than 100% of the area median income.
That amount is $98,100 for a one-person household, and $140,100 for a four-person household.
“This is a smart and scalable strategy to catalyze viable housing opportunities for the middle-income workforce,” said Joaquín Cintrón Vega, chief executive officer of the Denver Housing Authority. “We’re proud to be part of a team that’s working to bring forward a new kind of housing option for Denver families and one that is responsive to the city’s real needs and the people we proudly serve.”
In Denver, there is a severe rental housing crisis that has been exacerbated in recent years by increasing costs.
Currently, one in four renters in Colorado spends over 50% of their income on housing and homelessness is steadily increasing, as previously reported by The Center Square. From 2020 to 2024, Colorado’s homeless population grew by 90%, the fourth highest growth rate in the country.
City officials say a lack of affordable rentals is playing a role in the growth of homelessness, making it a priority for the city to provide more affordable housing.
“We can’t allow Denver to become a city where only the wealthy can afford to own a home,” Johnston said.
This is just one of the housing programs currently in place in Denver as part of its initiative to address housing. There are very differing opinions on how the issue should be addressed.
The Colorado Coalition for the Homeless published a report detailing Colorado’s “affordable housing crisis,” arguing that the state needs to make “strategic investments” to address the issue.
Others like the Common Sense Institute of Colorado argue that the state’s “piecemeal” approach to housing and building regulations is one of the main issues, calling for “broader reform,” not just more government money to fix the shortage.