The fate of Mayor Mike Johnston’s landmark proposal to fund new affordable housing was uncertain on Tuesday night.
As of 9:15 p.m., Ballot Issue 2R had the support of about 48 percent of the votes that had been counted so far. It would need 50 percent to pass.
The proposal would raise local sales taxes in order to subsidize affordable housing development and other housing programs. Johnston told Denverite late on Election Day that he was still hoping for victory.
“We know this was a big swing and a big idea. We’re asking the city to make a big change on a historic opportunity. So we always knew it would be a battle, but we think there’s a path,” he said in an interview.
The measure gained ground as the night went on, which Johnston credited to progressive votes coming in late.
What Ballot Issue 2R would do:
If 2R passes, consumers would pay an additional 0.5 percent sales tax on purchases in Denver starting in the new year. That’s the equivalent of 5 cents on every $10 purchase. The tax would be imposed for the next 30 years.
Johnston has made housing and homelessness a top priority in his first term. The ballot measure was one of his biggest moves yet. Proponents say the tax could help build 44,000 new homes in the next decade.
The city itself would not develop the properties — that work would be reserved for for-profit and nonprofit development companies.
Voters had their doubts:
Some voters were leery of adding yet another new tax. The city has passed a slate of new taxes in recent years to pay for everything from parks to housing, preschool, cultural institutions, meals for kids and college assistance.
“I personally feel like we’re spending a good amount of money on taxes already,” said Luke Singer, a Democrat, in an interview outside East High School.
Christopher Lee, who hadn’t yet cast his ballot, was on the fence.
“Some of my friends were critical of it because they actually think the solution is more around reducing zoning [restrictions on development], other measures that increase supply and not so much around specifically affordable housing,” he said. “But that’s one that’s interesting to me.”
Another voter, Brian Combes, was so torn that he skipped both of the sales tax measures.
“I know we need things like affordable housing, but at the same time, then I know it’s another sales tax increase,” he said, “and we’ve been hit with so many other increases.”
On the other hand, voter CJ Stribling said he wanted to see an even bigger proposal form the mayor.
“Honestly, I don’t think they went far enough with the bill, but I understand that Barack Obama mentality of incremental steps are better than no steps at all,” he said outside Hiawatha Davis Recreation Center.
Even as the housing measure trailed, another sales tax proposal was on track to pass Ballot Issue 2Q, to provide funding for Denver Health, had about 57 percent approval.
Johnston said the cause was worth the cost
Critics of the sales tax measures said that they would be regressive, with an especially acute impact on poor people who would have to pay extra on many purchases. Some suggested that the money for affordable housing should instead have come from taxes on property owners.
Johnston pointed out that the sales tax doesn’t apply to necessities like gas and groceries. He argued that it ultimately would benefit low-income people.
“We think this is actually progressive in where it focuses those dollars and how it helps change the thing [the cost of housing] that is hurting people the most,” he told Denverite in a recent interview
The measure would generate an estimated $100 million a year, which could be used to pay to build more affordable rental units or reduce rent. The money could also be used to make it cheaper for lower-income people to buy a home and to provide more affordable for-sale houses and condos.
The sales tax for purchases in Denver is currently 8.81 percent, including taxes collected by the city, RTD and the state. If the measure passes, the new sales tax would be 9.35 percent. Another proposed sales tax increase, Ballot Issue 2Q for Denver Health funding, would bring the total to 9.65 percent if it passes, too.
If both tax measures passed, Denver could have one of the 10 highest sales tax rates in the state, compared to the current rates in other locations.
Who was behind it?
The campaign supporting the measure is called Affordable Denver. As of Nov. 1, it had reported raising about $2.4 million. Three organizations have given over $200,000 each to the campaign: nonprofit advocacy groups Healthier Colorado, Action Now Initiative, and Gary Advocacy, an affiliate of Gary Community Ventures, which Johnston led before becoming mayor.
There was no organized opposition, but several council members voiced their concerns when voting on it in August. Council members Flor Alvidrez, Kevin Flynn, Stacie Gilmore and Amanda Sawyer argued that the process was rushed and lacked specifics about how the money would be spent.
Nine of 13 Denver City Council members voted put the proposal on the ballot.
This is a developing story and may be updated.
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