Colorado has been in the midst of a housing crisis for the last several years, with rent in Denver increasing more than 48 percent from 2010 through the end of 2017. But if a proposal to use sales tax proceeds from recreational marijuana sales is passed by city council, it could help bolster funds used for affordable housing in the city.
The proposal unveiled by Mayor Michael Hancock and other city officials would increase the number of income-restricted apartments from 3,000 to 6,400 over the next five years, as well as doubling money to the Affordable Housing Fund from $15 million per year to $30 million per year. Partnering with the Denver Housing Authority, the city would issue $105 million in bonds to subsidize affordable housing.
Hancock’s proposal would increase Denver’s 3.5 special tax on recreational cannabis to 5.5 percent, bringing the total state and local taxes to 25.25 percent. Denver voters wouldn’t have a say in the increase since the 2-percentage point increase requires only city council approval.
Marijuana industry members have largely supported the proposed tax increase. Kristi Kelly, executive director of the Marijuana Industry Group, said that her organization “has been a long-time advocate with better aligning marijuana tax revenue with the positive impact of the communities in which we live and operate.”
Kelly said that the tax increase would equate to about a dollar on a $50 purchase, and that she wasn’t concerned that the increase would drive consumers to the black market.
While briefing reporters on the proposal, Hancock said, “We must thank our marijuana industry for stepping up to say we want to be part of the solution.”
According to the Denver Post, an estimated 80,000 households in Denver spend more than 30 percent of their incomes on rent and housing costs. Officials say that increased housing for low-and-moderate income families, as well as the homeless, would be a priority.