Homebuilders Balk At Fees For Affordable Housing
DENVER (CBS4) The City of Denver is holding its second public meeting to explain its plan to fund affordable housing in the future. Mayor Michael Hancock wants to create a fund dedicated to building, preserving, and rehabilitating 6,000 affordable housing units in the city.
The Mayor is proposing raising $150 million over the next 10 years. The plan would be to raise property taxes and assess fees on new construction in order to raise the money.
LINK: City of Denver's Permanent Fund For Affordable Housing Proposal
"For the average homeowner, it's a half a mill on a medium priced home, that comes to a dollar per month," said Derek Woodbury, communications director for Denver's Office of Economic Development.
The City would also assign new fees to developers of both residential and commercial properties. Proposed fees on new construction would range from $.60 per square foot on residential buildings up to $1.70 per square foot on a commercial development. That means new houses will cost more.
"If you took a 1500 square foot home, you're almost at $1000," said Cherie Talbert of the Home Builders Association of Metro Denver. "That will easily put about 1800 people out of the home buying market."
LINK: Home Builders Association of Metro Denver
Home builders say that if they have to pay new fees on new construction projects, they'll simply pass the cost onto consumers. And while they support the City's desire to fund affordable housing, they don't think they should have to pay for it.
"Could they not just reduce their profits a bit?" asked CBS4's Suzanne McCarroll.
"Unfortunately, no," replied Talbert. She said the profit margin is too slim for them to be willing to absorb any of the added fees.
The City will hold more community meetings to continue to discuss the affordable housing fund. Denver City Council is expected to vote on the proposal at the end of August. If it passes, the changes would go into effect on January 1, 2017.
Suzanne McCarroll is a general assignment reporter at CBS4. Her stories can regularly be seen on CBS4 News at 5 p.m., 6 p.m. and 10 p.m. Connect with her on Facebook and follow her on Twitter @SuzanneCBS4.
