A bill for an ordinance approving a proposed twenty-year Agreement between the City and County of Denver and the Housing Authority of the City and County of Denver, Colorado (“DHA”), to allow transfer of certain funds from the city’s affordable housing fund to DHA, and for the accelerated development, rehabilitation and preservation of affordable housing. Approves an Intergovernmental Agreement with the Denver Housing Authority (DHA) for twenty years for the transfer of the city’s dedicated property tax from the Affordable Housing Fund to DHA to support accelerated development, rehabilitation, and preservation of affordable housing serving low- and moderate-income households, citywide (OEDEV-201843652-00). The last regularly scheduled Council meeting within the 30-day review period is on 9-10-18. The Committee approved filing this item at its meeting on 8-8-18.
Please. Because voting in those results. 3939 as final consideration of Council Bill 394 will be Monday, September 10th. All right. Moving on, Madam Secretary, are you pleased with the next item on our screen and Councilman Flynn? Go ahead with your questions on Council Bill 863. Okay. This is the intergovernmental agreement with the Denver Housing. Authority and Laura Speer. Can you speak to. Thank you. I just had a several questions on the agreement. I did watch some of the committee meeting on this. I'm not on that committee, but. The primary question was the mechanism under which the reasonable distribution. I have Mr. Guerrero here also. Thank you. The reasonable distribution of developable properties that Denver Housing Authority would acquire in order to distribute them around the city. I found to be sort of found it to be weaker than I would have hoped, because it seemed to me that the mechanism requires only a minimum of six. Council districts, which is just over half. Of the city, and it's a distribution by dollar amount rather than by unit amount. And because of the land cost differences in some parts of the city versus others that are more affordable, that that we will end up with what we're trying to avoid, which is a concentration in some neighborhoods and not a not a reasonable distribution which is called for in the idea. So I and I did watch part of the and Laura, you sent an email later this afternoon. So could you explain to me why a dollar, an equitable dollar distribution of no more than 15% of the proceeds was determined to be represent. What's more reasonable distribution rather than distribution of the actual number of housing units that they would produce around the city. Good evening. Council members Ismael Guerrero, executive director of the Denver Housing Authority. Laura brzezinski and I agreed to be tag team, and I drew the short straw in this question. Did she tag you? Actually, literally, yes. Okay. No marketing aside, though, in the in the IGA. As you know, there, the two pots of money that your question refers to, the land acquisition. Yes. Property Acquisition Fund. And because that is in that in the agreement that is land that the HRA will be acquiring land or properties will be acquiring and develop co-development. I'm not co-developing developing in partnership with other nonprofit and for profit developers. We don't have specific sites, obviously, and specific buildings identified for that, so it's harder to get to a specific unit count overall on a site by site basis. However, we feel that the the land value is a proxy for the number of units that will be acquired there and therefore. That will be developed. And those sites. So therefore, if the funds are distributed per the policy goals of no more than 15% in one district, our assumption in the modeling is that sites that are sort of less expensive in certain districts will have I'm sorry that as the as the land price goes, so will the amount of units that we can build on that parcel. So in a downtown area where land is might be twice as expensive will be more or more, but we'll be buying smaller parcels and getting, you know, higher density development in outlying neighborhoods where land is tends to be less expensive. They also tend to have lower densities. So we'll be spending equal amount of of dollars to get the same equivalent number of units. You're referring to zoning entitlements for zoning? Yeah. Generally to the higher density zoning close to the central business district. Lower density as you get into the outlying neighborhoods. Okay. So so we just felt that the land value was a good proxy for the number of units that would be developed on that site. So but in other words, there is no goal to have a reasonable distribution of the actual number of housing units in each council district. I think that that policy goal is reflected in the land value goal. So if it works out, it would just be through this secondary mechanism of the dollar amount that we spent on the land. But it also depends. Apparently, it could also depend on who our development partner is and what they bring to the table. That that's correct. Would that be fair to say? Yes. Okay. Laura, could you answer this one? Don't forget to. Tag. Thank you. The contract says that the executive director of is that of OED and DHC can modify or waive requirements in the scope of work in Exhibit A and also in the definitions in Exhibit B on their mutual agreement without coming back to the Council, except after the fact within 60 days to tell us how you changed this contract that we're going to approve tonight. And I'm a little uncomfortable with the notion that we're sending a contract out the door that by mutual agreement between the administration and the housing authority, you can modify or waive some of the requirements. Can you make. Me more comfortable with that in. Some way? So Laura brzezinski, Office of Economic Development, and Julia, few from the city attorney's office want to add to this as well. Please feel free. But the contract does state that the scope of work can be modified at the mutual agreement of the executive director of OED. Except for the minimum outcomes that are achieved through the agreements. That includes 1200 units produced through the land acquisition, and I think it's 1294 units that are preserved and created through the partnership with DOJ. Mm hmm. Okay, so you just restated what I asked, but why are why are we doing that? Part of the reason that we I. Mean, why most other contracts that we put out when there's when they change, the administration comes back to us with a contract amendment. Sure. So the agreement is built around those minimum achievable outcomes. But some of the path to achieving those outcomes, we know, will be dependent on market conditions that could change over time. So some of the assumptions that are included as part of the scope and the specific projects that may achieve those outcomes are places where we wanted to provide flexibility. I was just going to say, you want the flexibility as long as you're achieving the same contract agreement goals. I keep calling your contract. It's an idea. So as long as the goals remain the same, your flexibility within. The methods for doing that would you would report back to us but not ask us for permission to do that? Well, to some extent, there are there are parameters around what can be approved by the directors. But we are negotiating and proposing through this agreement to purchase the outcomes of the units created and preserved through the agreement. Okay. Thank you. I have one more question. Am I reading exhibit B4 correctly that under the net proceeds member housing authorities, administrative fees or. Costs are capped at 4%. Of the of the. Property tax allocation. And the proceeds of the bonds. The reason I ask is because that's 1% better than what the housing fund we said. I think it is 5%. Eight, 8%. Okay. 8%. That's correct. So what I'm reading that to mean is that DHS admin. Costs that they're allowed to. Load onto these proceeds is limited to 4%. That's correct. That's excellent. Yes. If true. If true, that's excellent. Thank you, Mr. President. Thank you. Councilman Flynn, Councilman Espinosa. Ismael, you threw me off by the the the land value thing because some of these parcels are ones that you already own. To clarify, Councilman Espinoza, I was referring to the funds that would be used to acquire new sites to be developed by other development partners. So not that the property specifically. Okay. I do wish that I mean, do we have any any other sort of metrics that allow us to sort of look? You know, we've got the information about housing cost burden, you know, level of cost burden, households at different arms. But do we have there are other factors, right? Proximity to workplace productivity, schools? Do we have I mean, are we sort of heat mapping? So we actually understand that, you know, we're actually have a housing an affordable housing void. And, you know, we have an affordable housing need citywide, but we have population concentrations of people that are having the mean areas where there's there's not enough housing proximate to other aspects that would actually that actually impact the total totality of affordability for that household so that we're actually more strategically placing housing where it is rather than just simply going by by land value or something informing that. Yeah, that's correct. I think we call out other location factors opportunity neighborhoods, proximity to transit and services are some of the site conditions that we'd be looking for, not just the price of the land. Great. Thank you. Thank you. Councilman Espinosa. Councilman Mechanic. Thank you, Mr. President. I frankly just wanted to comment on this bill, so my colleagues dove right in with their questions. But I actually want to summarize what it does just for the public and for the record, which is that this bill and the companion that goes with it, which is 864 together, double our commitment to affordable housing, which just for the record, is the largest commitment in the state of Colorado, even more than the state's general fund commitment to housing. They have other funds that they leverage, but for a general fund, commitment of funds that, you know, could be spent and other things, this is it's historic. And I think just a few things to make sure that folks highlight is as we move forward, which is that it brings, you know, $105 million forward in advance through bonding, which was something specifically that the community strongly asked for, that we not just do a small amount each year. There's some cost benefit to that, there's some transaction costs and interest cost and things like that. But I think there was some building consensus that it was important to bring some money forward and the administration was able to work with DHS to find a way to do that. Third thing I think is important to highlight is who some of these housing units will serve. It will be a full range of incomes when you look at the full range of sources. So, for example, there is marijuana tax dollars that are being dedicated through this provision and that will include funding for folks of all incomes. But the portion we talking about that the Denver Housing Authority will be focused on with land acquisition will particularly focus on the most vulnerable residents of our city. These are folks who are either struggling with homelessness or who earn so little that they are below what we call 30% immediate median income. These are very, very low wage workers or folks who are on fixed income, Social Security, they're on some form of disability. They're seniors who are who are very low income. So so it's important to know that this package serves the lowest income folks. And then the last thing I want to highlight is that the portion that the Denver Housing Authority is taking on, which we focused our questions on today, but is actually only half, half of this package. But this portion, this half of the package will be affordable in perpetuity, which means it won't expire. We are struggling mightily right now to preserve housing that expires at 15, 23 years and to try to re-up it all and not lose it. And so we will not have to do that with this half of the package. And so these are really important pieces that just deserve highlighting before we gloss this through in our consent agenda. No one has called this out for a vote. I don't think so. It will be a consent package vote. But because it's big and because it's important. I just wanted to take a minute to, you know, thank the administration for the creativity. And I think the marijuana industry who has been very open to a sales tax increase, that won't be easy. Right. We want to make sure that that product stays in the legal market and doesn't get pushed to the black market. So it's a careful balance. And so I want to thank the marijuana industry for their, you know, approach to this and then to the community voices who help to kind of keep us moving so that we wouldn't just rest on the package we passed in 16, but we would work to grow it. So we all committed to doing that. We all had different paths and a lot of the ideas we shared and we researched. Separately all kind of were reflected in this package. So my thanks to those who worked together and to my colleagues. You know, I think that, you know, we've blazed a trail here and we're continuing to grow it. And that's what I continually state. There is no one bullet or solution to the housing challenge we face. But each piece we we expanded nondiscrimination with a week ago to two weeks ago feels like a lifetime already. But each piece we do you know whether it's keeping people in their homes through eviction defense. You have to add up each of our policies separately, together, and then you have to watch how the impact of each one grows as we grow the program. That's how you measure the impact we're having. So with that, I am so excited to vote on this as part of, I think, the consent package. Thanks. Thank you. Councilwoman, can each Councilman Brooks. Yeah. Thank you, Mr. President. And I just wanted to add my my almond and also exclamation point on a couple of points. Councilwoman Kennedy mentioned, you know, this is this has been a long conversation starting from 2014. And I think our first package of bills in 2016 was a great first step. But I think the community is very clear that this is this is good, but it's not nearly enough of what we're experiencing and the number of people that are being displaced in our city. And so the the administration are our nonprofit partners of VHA. It's incredible. But I also want to say, in doubling this fund, we're not done. And it is going to take the private sector, it's going to take government is going to take nonprofit, it's going to take the community to continue to grow this. And so although I'm extremely excited we got this done this year, I think there's a lot more work that we have to do. The other thing and 2016, it was exciting to pass the first affordable housing fund. The whole point was there was a permanent fund, but that night we put a sunset on it and excited that a part of this package is eliminating the sunset sunset as well, and so excited to move forward and making sure that this is something that's going to impact Denver in the next 20, 30 years. Thank you. Thank you. Councilman Brooks, Councilman Flynn, your up. Thank you. Just briefly, I want to thank Ismael and Laura for the answers. I had called this out for a vote because I did have those questions that I thought were were crucial to having the answers. And I got the answers here. So I'm happy to withdraw that request and put us in a black vote. Thank you. Thank you, Councilman Flynn. All right. An exciting bill that will move over to the block vote in a couple of minutes. We have one other item that's been called out, which is 746. Madam Secretary, we put 746 up on our screens.