DGS Legal Alert: Denver Inclusionary Housing Ordinance

The new Denver “Expanding Housing Affordability” Ordinance amends Ch. 27 of the Denver Revised Municipal Code by: (1) revising provisions related to the linkage fee; (2) implementing incentives for developing affordable housing; and (3) adopting affordable housing requirements applicable to the creation of new dwelling units. The new policy will take effect in Denver starting July 1, 2022. In summary, the new ordinance:

1. Requires all new residential development of 10 units or more to designate 8% to 12% of the units as affordable for a period of 99 years, regardless of whether the home is for rent or for sale. To align with state law, which requires alternatives to this requirement, the new policy includes the following options in lieu of allocating affordable housing units:
   1. An option to pay a fee-in-lieu of the affordable units. This fee ranges from $250,000 to $478,000 depending on the unit type and market area and will be calculated pursuant to the table attached hereto as Exhibit “A”.
   2. Negotiated and community-driven housing agreements in certain situations that allow for flexibility and benefit the community in alignment with city housing goals, which include the following:
      1. The dedication of land for the provision of affordable housing.
      2. An affordable housing plan to provide fewer IRUs on-site but at a greater depth of affordability.
      3. An affordable housing plan that would provide fewer IRUs on-site but the IRUs would have a greater number of bedrooms than would otherwise be required.
      4. An agreement to provide off-site IRUs concurrently with the construction of the residential development within the same statistical neighborhood or a 1/4 mile radius of the site.
2. Increases the “linkage fee” assessed on development which does not incorporate IRUs over a period of five years. The linkage fee is imposed prior to the issuance of a building permit for any new structure or for any addition to an existing structure that increases the gross floor area of the existing structure according to the schedule attached hereto as Exhibit “A”.
3. Offers zoning and financial incentives, such as flexible parking requirements, height incentives, and permit fee reductions, to offset the cost of building affordable units and increase the overall supply of housing.
   1. Permit Fee Reduction. An applicant will receive a building permit fee reduction of six thousand five hundred dollars ($6,500.00.00) per IRU in a typical market area and ten thousand dollars ($10,000.00) per IRU in a high market area. The building permit fee reduction shall not exceed fifty percent (50%) of the total building permit fee.
   2. Reduced minimum vehicle parking required by the Denver Zoning Code. An applicant may utilize the alternative minimum vehicle parking ratios allowed in Article 10 of the Denver Zoning Code.
   3. Commercial, sales service and repair street level exemption to linkage fee. An applicant may receive an exemption from the requirement to pay a linkage fee for the gross floor area of a primary commercial sales, services, and repair use located on the street level of a structure

Additional resources and further details can be found on the project webpage: www.denvergov.org/affordabilityincentive.