To deal with a shortage in affordable housing, Denver is trying out a pay-what-you-can program for some tenants.
Under the program, the city will pay the difference between what lower income tenants — like teachers, hotel workers, medical technicians and food service workers — can afford to pay and the market-rate rent, the Wall Street Journal reported. The program, dubbed Lower Income Voucher Equity program, or LIVE Denver, will be open to individuals making between $23,500 to $47,000 a year and families of four with household incomes of $33,500 to $67,000.
To start, the city already has enough money to pay for 400 units. Officials expect to pay $500 a month for a single person and $900 per family. Qualifying tenants will receive subsidies for two years.
“This is not a welfare program or anything like that. This is people who are working at hospitals, hotels and food service,” developer Mike Zoellner, who helped create the program told the Journal. “We want them in our community and we want them in our building.”
Since 2015, 12,000 new apartments have been built in Denver and another 22,000 are under construction, according to CoStar Group. Of those apartments, 90 percent are considered luxury units.
A housing expert told the Journal that there are risks in not allowing the market to take shape naturally.
“What you would hope is that excess supply leads to lower rents. If the city is pumping subsidies in, aren’t they going to be propping up the upper end of the market?” said Chris Herbert, managing director of Harvard University’s Joint Center for Housing Studies.
In New York, Mayor Bill de Blasio has also been exploring ways to increase the city’s affordable housing count. His administration has recently floated a few new ideas, including building tiny houses and encouraging development of city- and privately-owned vacant land. [WSJ] — Kathryn Brenzel