Following the City and County of Denver’s (“City”) establishment of the Expanding Housing Affordability Ordinance (“EHA”), the City’s Department of Housing Stability (“HOST”) proposed a new policy focused on challenging involuntary displacement of City residents due to escalating housing costs and a lack of affordable housing opportunities for subsets of the City’s households.
Denver isn’t the first municipality to establish a prioritization policy, also known as a preference policy. The City looked to other cities across the nation in creating its prioritization policy, including San Francisco, Austin, Portland and New York City, each of which have implemented policies that prioritize certain households for available income-restricted housing units.
This policy—referred to as the Affordable Housing Prioritization Policy (“AHPP”)—was the result of extensive community and peer city research; it was adopted in September 2022 and takes effect on July 1, 2024. The AHPP does not apply to affordable housing units existing before the effective date, nor does it apply to projects funded prior to the effective date, or affordable housing plans and other forms of affordable housing negotiated agreements that are approved prior to the effective date.
The AHPP is structured with the goal of preserving 30% of affordable housing units for displaced households as well as City residents who are vulnerable to displacement – the preserved units are referred to as “prioritized units” in the Denver Revised Municipal Code.
The AHPP applies to both affordable rental and affordable ownership units within an “applicable housing project.” Applicable housing projects include: (i) any project that receives funding from the City for purposes of creating or preserving affordable units, (ii) any project that is subject to a build alternative plan or other agreement with the City where affordable units must be provided, or (iii) a residential development or high-impact development that provides income-restricted units, if the project (a) is located in an area vulnerable to displacement (regardless of the number of dwelling units), or (b) contains a minimum of 100 dwelling units. For purposes of the AHPP, areas vulnerable to displacement will mean neighborhoods that meet all of the indicators defined in Blueprint Denver’s Key Equity Concepts Methodology appendix. The indicators are determined at a census tract level and are as follows:
(1) the tract’s percentage of residents with less than a bachelor’s degree is higher than Denver’s percentage of residents with less than a bachelor’s degree;
(2) the tract’s percent of renter-occupied units is higher than Denver’s percent of renter-occupied units in 2016; and
(3) the tract’s median household income is lower than Denver’s median household income in 2016.
Residents’ eligibility for access to prioritized units is determined based on evidence delivered at the time of their application for a unit, such as evidence of an eviction, foreclosure, the renter being required to move because their landlord is selling or moving into their current unit, or the applicant’s rent or mortgage amount equating to more than 40% of their household income. If a particular prioritized unit receives multiple priority-eligible applicants, the City has created a scoring system for unit owners and property managers to determine which applicant will be approved for the unit.
Owners of applicable housing projects will be required to submit reports to HOST in order to monitor compliance with the AHPP, and the director of HOST is authorized to promulgate rules and regulations to administer the AHPP, which expressly may include a range of civil penalties for noncompliance with the AHPP or its implementing rules.
This document is intended to provide you with general information regarding Denver's Affordable Housing Prioritization Policy. The contents of this document are not intended to provide specific legal advice. If you have any questions about the contents of this document or if you need legal advice as to an issue, please contact the attorneys listed or your regular Brownstein Hyatt Farber Schreck, LLP attorney. This communication may be considered advertising in some jurisdictions. The information in this article is accurate as of the publication date. Because the law in this area is changing rapidly, and insights are not automatically updated, continued accuracy cannot be guaranteed.