Also, Denver and DC will pay a basic income to people who are homeless.
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Colorado Ballot Initiative Could Change How Affordable Housing Is Funded
In November, Colorado residents will vote on a referendum that would direct a small portion of state income tax to new affordable housing, Log record reports. Proposition 123 would set aside 0.1% of state tax revenue for local governments with the goal of increasing the affordable housing stock by 3% in each jurisdiction. It would also go to programs to help teachers, nurses and other workers secure their first homes and fund defense against evictions and rent supplements, The Denver Post reports. The campaign estimates the proposal would set aside $300 million a year and could lead to 170,000 new units over 20 years. This does not meet current needs – according to census datathe state had a deficit of 93,000 to 216,000 units in 2020 â but it could establish a housing finance model in the future.
Remarkably, the proposal would fund affordable housing projects in a way that would share revenue with tenants. The Denver Post reports that instead of using investment banks to lend money to developers, Prop 123 would rely on the Colorado Housing and Finance Authority, which would demand a lower rate of return. Part of the profits would then be redirected to the tenants in a savings account.
Private lenders are reluctant to finance new buildings that will not offer a high rate of return, considering them too risky. Private developers often claim that without a high percentage of market rate units to subsidize affordable units, their projects would not get funded. Proposition 123 suggests that the state not only fund affordable housing, but take over the lending process, diverting profits to tenants, who typically pay rent for years without any kind of capital.
While the proposal is popular (an ACLU poll found that 77% of respondents supported the initiative), it would still require buy-in from local governments whose residents might be dissuaded by certain aspects. The proposal requires affordable housing projects to be approved within 90 days, reports the Denver Post. This requirement is intended to expedite an approval process that is often hampered by bureaucracy and NIMBYism.
New York’s Hotels To Housing program is a failure
A year later, New York’s plan to convert unused hotels into permanent affordable housing has produced no units, Politico reports. In 2021, then Governor. Andrew Cuomo signed the Housing Our Neighbors with Dignity Act (HONDA) which provided $100 million for the conversion of hotels into permanent housing. Mayor Eric Adams announced last year that he would use HONDA funds to convert 25,000 hotel rooms into permanent, supportive housing for people leaving homelessness.
This plan has been hampered by state-level regulatory burdens that have been eased last June and Governor Kathy Hochul added an additional $100 million to the program. But Politico reports that additional restrictions on hotel types â Adams only wanted to convert non-union buildings â may have contributed to developer disinterest, and the window of opportunity to convert those units is likely over. The plan hinged on the glut of underutilized hotels that were vacant during the pandemic. But the city’s tourism is returning and these hotels are approaching their 2019 capacity: New York hotels were 81.2% full in the first week of September, compared to 39% capacity in the first week of September 2020. In September 2019 , they were at 87.9%. full.
Denver and DC will pay basic income to homeless people
Denver and Washington, DC will both provide basic income to homeless people.
denver announcement last week that its city council approved a contract to provide a basic income to 140 people at a cost of $2 million, to be paid with funds from the US bailout. The program will be administered by the Denver Basic Income Project, a nonprofit created last year by clothing entrepreneur Mark Donovan. The non-profit organization has already distributed a basic income to 820 homeless people, funded by philanthropy and donations rather than public funds.
The payments will go to women, gender non-conforming people and families trying to leave the shelter system, the city says. The program is model after similar basic income programs in Vancouver and Stockton, California.
DC Mayor Muriel Bowser also announcement a $25 million pilot project to provide cash assistance of up to $10,000 to 600 families exiting homelessness. The program, funded in part with $11 million in US bailout dollars, was doubled after the mayor’s office received more than a thousand applications.
The first 300 people will be registered by the end of the month and the next 300 will be registered next year. The scheme, called the Job Mobility Action Plan, aims to supplement the income of working families whose incomes are beginning to disqualify them from vital government assistance â the so-called âcliff benefits.Bowser’s announcement did not specify whether full-time work is a requirement to receive the benefits. Work requirements have been attached to SNAP and other federal benefits because of arguments that they discourage work. But such restrictions have proven unhelpful.
The country’s governments are increasingly experiment with basic income, which differs from welfare programs of the past in that it does not limit the use of money. A group of mayors have been pushing for more programs to be adopted across the country in an effort to shape federal policy.
Although there is not much data on the impact of basic income payments on homelessness, a report on the Vancouver program found that people who received payments were 50% less likely to spend a night in a shelter during the first 3 months of the study. And 80% of those who received payments were stably housed within 6 months, compared to 50% of those in a control group.
Roshan Abraham is Next City’s housing correspondent and a former Equitable Cities Fellow. He is based in Queens. Follow him on Twitter at @roshantone.