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How much will Denver mayor's homelessness plan cost?

Mayor Mike Johnston puts "ballpark" estimate at $40 million, but can't provide hard numbers just yet
mike johnston homelessness.jpg
Posted at 9:21 AM, Jul 31, 2023
and last updated 2023-07-31 11:25:11-04

Mayor Mike Johnston’s ambitious plan to address homelessness is beginning to take shape, though there is still uncertainty about the cost.

On Friday, the Denver Housing Authority announced its commissioners had approved plans to purchase the Best Western hotel near I-70 and Quebec in Central Park for $26 million.

The City plans to convert the 194-unit hotel into permanent supportive housing.

Johnston called it the “first key piece” of his goal to house 1,000 people by the end of the year.

“Unsheltered homelessness is an emergency situation in Denver, and we are laser-focused on bringing 1,000 people safely inside while permanently decommissioning encampments by the end of 2023,” Johnston said in a city press release. “This acquisition is the first key piece of that puzzle and puts us on a solid path to achieving our goal, connecting our unhoused neighbors to housing and low-barrier shelter, and improving quality of life in neighborhoods across our city.”

At a press conference earlier in the week, Johnston outlined the four types of housing strategies he is pursuing as part of his plan.

Converting hotels into housing is one of the strategies.

Johnston said it provides real benefits.

“Some of them will have kitchenettes included. That means you have a complete micro unit. You have a locked door, you have a bathroom, you have a shower, you have a kitchen, you have a bed, you have all the things you need for it to be a sustainable micro-unit,” Johnston said.

The mayor is also looking into partnering with landlords to move homeless people into existing rental units.

He continues to look for locations to build micro-communities, which include tiny homes and safe outdoor spaces.

Johnston said large commercial buildings, like old schools and churches, could also be converted into homeless shelters.

Denver7 asked Johnston how much his plan could cost.

“The answer is it varies significantly based on what the combination of units are,” said Johnston.

The mayor said different housing options come with different price tags.

In addition, the city must negotiate with property owners, which will impact the final price tag.

When Denver7 asked if he had a “ballpark” estimate, the mayor said he could not provide any hard figures yet.

During the campaign, Johnston estimated his plan to cost around $40 million.

“There is some range of that available through state and federal dollars,” Johnston said. “We'd like to do an even more aggressive amount of acquisition of new units than we might have initially hoped. And so, the more units we acquire, the more budget would require depending on the price point. We are modeling multiple scenarios with our finance team.”

The City applied for multiple grants last week.

City leaders also announced Denver was now eligible to receive state funding from a $300 million initiative, Proposition 123, which Colorado voters approved last November.

The City did not say how much it expects to receive, but the money can be used for affordable housing and to help people experiencing homelessness.

As for the hotel purchase, the city council must give its approval.

If council members give the green light, city officials expect the deal to be finalized by mid-August, with the City’s lease starting on September 1.