Denver Mayor Michael Hancock wants to raise the city sales tax on marijuana to pay for more affordable homes.
“Since our creation of Denver’s first dedicated Affordable Housing Fund, we’ve been working on ways to leverage those dollars to expand the fund’s capacity and broaden its impact,” Hancock said. “This proposal will deploy more funding quicker to support our residents and families without increasing costs on the very households we are working to serve.”
The plan would double the number of affordable homes the city thinks it can build during the next five years from 3,000 units to 6,400. It would also double the amount Denver spends on affordable housing from $15 million to $30 million annually.
Hancock wants the city to find about half of that money in its own budget and raise the other half from marijuana users.
"I spoke to a number of individuals in the marijuana industry, and they were pretty much unanimously supportive of this," Denver's director of marijuana policy Ashley Kilroy said. "As a responsible business in our community they thought this would be great way to contribute to the solution and the betterment of Denver."
The city technically doesn't have to ask the marijuana industry -- or Denver voters -- for its blessing to raise the sales tax on pot.
Voters overwhelmingly gave them permission back in 2013 to go all the way to 15 percent. Hancock's plan would take it from 3.5 to 5.5 percent.
The plan also puts an emphasis on building homes for the poorest people in Denver -- people who earn 0 to 30 percent of the area median income or about $27,000 a year for a family of four.
"These are the most challenging united to build due to the extra costs of needed support services," said Eric Hiraga, director of the Office of Economic Development.
That's why the plan is to partner with Denver Housing Authority on this part. Hancock wants to give DHA half of the money the city raises from the affordable housing property tax. DHA would then use that money to back bonds that would let it spend $105 million fixing up current apartments, building new units and buying land for future developments.
The announcement comes as the city continues to grapple with a growing problem with its affordable home sales. More than 200 of those houses might have people living in them who never qualified to buy them and say they had no idea the house was part of the program.