The Post ed­i­to­rial: Denver pi­lot pro­gram would help buy down rents for the poor for as many as 400 apart­ments.»

The Denver Post - - NEWS -

The city of Denver has found an in­no­va­tive way to bring im­me­di­ate re­lief to low-in­come Denver res­i­dents strug­gling with ris­ing rents that have far ex­ceeded the slow rise in wages.

Denver Mayor Michael Hancock an­nounced Tues­day that the city is close to scor­ing a ma­jor cor­po­rate part­ner to help launch a pi­lot pro­gram to buy down rents for as many as 400 apart­ments in Denver.

The idea, re­ported by The Denver Post’s Jon Mur­ray, is called Lower In­come Voucher Eq­uity, and the pro­gram would lever­age city money ear­marked for af­ford­able hous­ing against pri­vate con­tri­bu­tions from Denver em­ploy­ers like Chipo­tle and phi­lan­thropists like the An­schutz Foun­da­tion to cre­ate a buy-down fund.

Res­i­dents mak­ing be­tween 40 per­cent and 80 per­cent of area me­dian in­come would be el­i­gi­ble to ap­ply for the vouch­ers that could pay down their rents. For an in­di­vid­ual the range is $23,520 to $47,040 and for a fam­ily of four $33,560 to $67,120.

The goal would be for the rent to not ex­ceed 35 per­cent of the in­di­vid­ual’s in­come.

Here’s the bril­liant part of the plan, how­ever. Those in­di­vid­u­als would be putting 5 per­cent of their rent into an es­crow ac­count, so at the end of two years, in the­ory, the voucher re­cip­i­ents could have saved the be­gin­nings of a down pay­ment for a home.

We do have a cou­ple mis­giv­ing in the plan.

First, we hope the par­tic­i­pat­ing apart­ment own­ers will be com­mit­ted to con­tribut­ing an in-kind do­na­tion as well. For­mer Denver Post re­porter Em­i­lie Rusch re­ported that Denver is likely to have a glut of luxury apart­ments in com­ing years. Rusch found the good news was that 13,370 apart­ment units are on­line to open in Denver by the end of the year, but the re­ally bad news is the ma­jor­ity of those will be at the top end of the ren­tal mar­ket in prices.

As those units sit empty, prices should come down.

It’d be a shame if this voucher pro­gram re­warded the bad be­hav­ior of de­vel­op­ers build­ing for cus­tomers who don’t ex­ist in a fan­tasy world where on-de­mand yoga, tan­ning beds and dog groomers aren’t lux­u­ries beyond the fi­nan­cial means of most. It’s a good sign that the Denver Hous­ing Au­thor­ity, which has ex­ten­sive knowl­edge in man­ag­ing the fed­eral hous­ing voucher pro­gram known as Sec­tion 8, will have a hand in man­ag­ing this sys­tem.

Sec­tion 8 re­quires that ren­tal units be of­fered at a fair mar­ket rent set by the U.S. De­part­ment of Hous­ing and Ur­ban De­vel­op­ment. The 2017 fair mar­ket rent in Denver for a one bedroom unit was $1,031 based on 50th per­centile or me­dian rent.

Erik So­liván, the di­rec­tor of the city’s hous­ing pol­icy co­or­di­na­tion of­fice, said this pro­gram will have some type of sim­pli­fied HUD fair mar­ket rent re­quire­ment.

Also, we are en­cour­aged that the pro­gram is be­ing billed as a two-year pi­lot. Much can change in two years — hous­ing mar­kets can col­lapse, and the econ­omy can slow. If cor­po­rate part­ners and donors don’t re­turn in fu­ture years, it’ll be eas­ier to shut­ter the pro­gram if res­i­dents are ex­cept­ing a cut-off date. And if things work as ex­pected and the city con­tin­ues to grow, the pro­gram can be ex­tended and even ex­pand.

“City gov­ern­ment is seed­ing an ini­tia­tive that can be owned by em­ploy­ers, foun­da­tions, and busi­nesses,” So­liván said.

With the right guardrails and part­ners, this could be a good plan to bring some re­lief to Denver res­i­dents.

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