A bill for an ordinance approving a proposed Intergovernmental Agreement between the City and County of Denver and The Housing Authority of the City and County of Denver, to launch the new Lower Income Voucher Equity (LIVE Denver) program. Approves an $1,180,000 intergovernmental agreement with the Denver Housing Authority (DHA) through 12-31-23 to launch the Lower Income Voucher Equity (LIVE Denver) program to create immediate affordable housing options for employed workers by connecting vacant rental units with income-qualified Denver residents. The Committee approved filing this item at its meeting on 5-23-18.
Councilman Flynn again has called out for a comment council bill 660 and so has Councilwoman Black. Updating election procedures to include creating a fiscal impact estimates pro and con information for citizens on municipal initiatives. All right. Under pending, we have nothing called out. So let's put the first item up. Madam Secretary. Thank you. 592 and come. Yes. I'm sorry. Did you say something? Okay. Castle Martel, will you please put a 592 on the floor? Mr. President, I move that council vote 18 059 to be ordered published. All right. It has been moved and seconded. Councilman Flynn, would you like to make a comment? Yes, Mr. President. And with all due respect to Laura and the folks in the housing office and to Ishmael Guerrero, who I just noted in announcements, is doing a great favor in my district. I wanted to call this out because as well, when we talked about the five year housing plan, I also brought this up. I believe that this program, well structured as it is, and I believe that it would work in what it is attempting to do is the wrong approach to trying to to attempt to address the affordability of rental housing in the city. The principle is that we have empty units at a higher rate, not luxury apartments necessarily, but apartments that are for rent at a rate that they're going vacant. And so what we are doing is we're raising money from the city and maybe from some corporate sponsors to subsidize those higher rents. It won't necessarily be the rent that the landlord has opposed to that right now. It's what they call a reasonable market rate rather than fair market rate. But the principle is that we are perpetuating the problem of high rents in this city when we help to subsidize the occupancy of vacant apartments. When the market principle would be that the landlord ought to lower the asking rent until it gets filled. And I don't believe we will ever. Have affordable rents in this city as long as we continue to fill vacant apartments with subsidies. The corporate sponsors, the corporate partners that are recruited through this program, I'm not going to name them. I know who some of them might be. Instead of contributing to this program. Why don't they pay their workers more? Why are they contributing to a fund where we're going to subsidize higher end apartments for these low paid workers when these companies should be paying their workers a living wage? That's the answer to affordability ultimately in this city is that people earn a living wage. And so I wanted to call it out to vote no. Thank you, Mr. President. All right. Thank you, Councilwoman Ortega. Thank you, Mr. President. I think Councilman Flynn raises some valid questions and concerns. We know it takes a long time to bring these units online. And having been on the board of a nonprofit housing development organization that has gone through the low income tax credit process, sometimes three and four and five times, to secure part of your financing to ensure that you have the affordability in your development. This program actually makes units available that makes them available to lower income people today because they're available today. I share the concern about some of those that are at the higher end. I do know that they have identified units across the city. They're not all downtown, brand new top high end market units there. They're across the city. And I think just given the time that it does take to bring these units online, it's important that we have as many options for people who are struggling to live in this city today as possible. And this is just one of many programs that Denver will have. And as you all know, we now have $30 million to work with to that date. Will will bond upfront and be able to ensure that we have the resources to to fast forward those projects that are in line to get their tax credit funding. And we know that it just takes a lot more subsidies for these developments to reach lower income populations. And this is one of those one of many options available to people in our community. So I will be supporting this tonight. Thank you. Thank you. Councilman Ortega Well said. Councilman Espinal Yeah, I just wanted to explain my vote as well. I think I'm going to be sort of abstaining because there are some there's some administrative aspects of this that that are worthwhile creating that will actually help us, at least me in my imaginations, about what we can do better. On the housing affordable housing front that's actually benefited by this, this, this effort and not unlike the 30th and Blake and none of this what I'm saying right now makes any sense other than maybe to a few that I've actually spoken to on sort of my big picture ideas on how we can sort of more robustly help address this effort. And I promise you, I will be coming forward with something much clearer on that. This program, the Live Denver program, this money on this effort is creating the structures that that I want to tap. And and so for that reason, I can get behind it. But to to to my colleague, Councilman Flynn's point, this is not a sustainable approach. It is nice because it sort of addresses an immediate need. But I have long sort of railed since the linkage fee that our multifamily apartment building businesses are existing in a sweet spot. They are not taxed as businesses on property tax. They pay a 7% tax, not a 29% commercial tax rate. And yet they are very much businesses at the scales that we're talking about in the sort of types of businesses where we're we're we're sustaining by maintaining high rents in the market, by subsidizing vacant units elsewhere. So this is not programmatically the right way to address affordable housing. And so but it is unfortunately the best we're being given at this point. But I am still committed to working with this administration, with others in this industry, within the apartment industry and the contracting industry and the development industry, to actually help us take a different and more Denver unique approach. And and again, more on that very soon. I'm working on a video to sort of try and explain my ideas in a nutshell, something that you can take with you and understand that there is a tool out here. We just haven't created it or used it yet. Thanks. All right, Councilman. Thank you, Mr. President. It's no secret that I had some real concerns about this program since it was announced in a very political and media oriented fashion without the input of the impacted residents, it was intended to help. And so. It's, you know, tempting to say I don't want to reward poor process and poor decision making with support at the end, because I think, honestly, it is it is one of the worst examples of how policy has come about in my time in terms of making promises without data, not having equitable access to the information for this council or for members of the community until most of the details were finalized. So that's it's it is hard, but I'm not in the business of, you know, trying to to judge retrospectively. I have to judge the price, the product, the final product that's in front of me. And this program is a risk. It is a risk that it will reward, you know, market behavior of high pricing. It also has the potential to capture some folks who aren't captured with our current voucher programs. And so I will say to Councilman Flynn's concern that we do have a longstanding practice in housing of providing scattered site housing and market rate housing that's vacant and in downturns. It does help to bolster, you know, a market that, you know, might have, you know, apartments might have gone under. They you know, Section eight vouchers are are sometimes an important part of a business model for apartments in hot markets. They start turning residents away. So we have a history of of using, you know, payments that follow an individual rather than a subsidy to a building. And one of the benefits of that type of an approach is that it does mix incomes. So there is a lot to weigh on both sides here. I think where I come down and it's a tough call is that they the staff that has has has shepherded this program over the last few months has been very serious about taking input. And so a number of changes were made to this program, both ensuring that it would serve a distribution of incomes, not just folks at the highest level, making sure that people would have to have the same income verification requirements that we have very low income people do in the Section eight program, which is you have to verify your income every year. If you get $100,000 job, your subsidy shouldn't stay the same. So all of those types of changes that were made and I outlined some of them in the committee meeting, I think demonstrate an attempt to really be responsive here at the end to making this a more moderated program that mitigates some of those risks and creates more equity between this program and other programs. I'm still concerned I did check the contract and it still just has a resident of the subsidized units as a participant. It doesn't have a representative of renters interests. And I will say that not every resident has the same policy ability. And I think it's important to have both voices. It's important to have someone who's receiving the subsidy and knows how the process works, who can speak from the lived experience. It is also important to have someone who on a daily basis has policy and analytical experience with policy outcomes. One of the things we were concerned about in committee with this program is that it did not have a clear set of guidelines on which it would be evaluated. So for example, what happened to the market rate pricing in the unit, in the buildings where these units are located that should be tracked? Don't just tell me what happened to the resident, but tell me what were happening to the rents in the remainder of that building. Did they go up? How did they change? How did that differ from the rent we were paying? Did they go down? I mean, there's a lot of speculation about what's going to happen to market rents. And so if we lock in a two year contract and we do end up in a downturn, I want to know if the rents around that unit are going down. So there's a lot more work that needs to be done. I this contract doesn't obligate this board to come back to this Council for approval in the future. It is kind of a we give the money over and then this advisory board operates through the contracts that are put in place. I would encourage you to seek input beyond the contract requirements. I would encourage you to come back and take input on how the programs should be evaluated, since that was not yet concluded. We need to get that on paper and you need to have all the criteria by which we will be looking at success. I am one more thing. Just that sets me at ease in this in this careful balance is that this is a one time infusion as far as we've been told at the Housing Advisory Committee, where I represent this council, there are no funds allocated in 2019 into this program until they have a chance in 2019 and 2020 to see the results. So I think that's an important way to manage the risk of the city and potentially unintended consequences. I frankly, I'm voting for it because I hope it succeeds and I hope that it doesn't have the unintended market impacts, but I hope that it will house families who would otherwise be struggling. And that is why I think it's worth taking some of these other risks, because the need is so great. So I appreciate all of the work over the last few months, especially to to get a public input process. Back on track. And I hope that that input process remains more transparent and more inclusive of the impacted communities then than we had in the first in the first chapter of this program's development. So with that, I will be supporting it tonight. All right. Thank you, Councilwoman. Councilman Black. Thank you, Mr. President. I'd like to thank Councilwoman Coinage for staying on top of this and really advocating for it to make sure that it had a lot of improvement. So thank you for your vigilance. Excuse me. I will be supporting this because it's going to help 125 families who don't have a place to live. And helping 125 families get into an apartment as soon as possible is not going to change the market of the apartments in the Denver metro area. That is not a game changer. There are tens of thousands of apartments, so 125 of them. Getting some help is not going to change the market. I'm also pleased that many of the apartments that step forward are in my district and they are no in no way luxury apartments. And they're going into some nice mixed neighborhoods with some nice schools. And we have transit and grocery stores and parks, and it will be a nice place to live for a lot of people. And I have a lot of confidence in Denver housing authority managing this program. Thank you. All right. Thank you, Councilwoman Black. I'll just make a couple comments. Number one, I think, Councilwoman Ortega, you said something that's really important and a lot of folks don't know. From conception to completion of an affordable project years 2013, Walton took eight years to get done. That's far too long for a crisis. We need units now. We need them right away. And it's one of the things, one of the reasons I'm so supportive of this. I appreciate Councilman Flynn's concerns and hurt them in committee. But I am supportive of this because I think we can help people now. Thank you for saying 125. Councilwoman, can each thank you for your your vigilance in this. And I would just ask that the program maybe come back to our housing committee, you know, to to report back on how the program's going so that we can keep keep keep up with it. All right. So no other comments. Madam Secretary, welcome. Flynn Now, Gilmore, I Herndon. I can reach lopez. I knew Ortega. I Sussman by black clerk by Espinosa. Mr. President. I please. I was wondering about the results. I'm just making sure to tonight's one nay, one abstention tonight. One way, one abstention, five, 95, 92 has been ordered published. Okay. We now have 66. So can you bring that up and have comments by members, by council? Councilman Flynn and Councilwoman Black.