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‘We know how to do it with existing resources’: Johnston addresses funding concerns for homelessness plan

Denver response to homelessness crisis will total approximately $48.6 million in 2023
Posted: 2:55 PM, Sep 12, 2023
Updated: 2023-09-12 18:00:34-04
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DENVER – Addressing funding concerns to provide shelter for 1,000 unhoused Denverites by the end of the year, Mayor Mike Johnston on Tuesday reassured taxpayers the city has enough money in its pockets to address the homelessness crisis without cutting into critical city services.

The budget, revealed during a news conference Tuesday, covers hotel purchases, micro-communities, rapid rehousing and wraparound services like therapy and treatment. It is expected to cost approximately $48.6 million in 2023, according to city estimates.

“As we continue to work tirelessly to deliver on this goal, we know how to pay for it, and we know how to do it with existing resources,” Johnston said in opening remarks, as he reassured Denverites that the plan is fully paid for. “We have a path to success on that plan, and we can deliver success on that plan without cutting critical services.”

Where will the money come from?

The great bulk of the money to address the homelessness crisis in Denver will come from the city’s Department of Housing Stability budget, otherwise known as HOST.

Out of its $250 million budget for 2023, HOST will allocate $37 million in funds for the emergency response, Johnston said. Of those, $16.1 million will come from American Rescue Plan Act (ARPA) funds to cover the cost of purchasing the 194-unit Best Western Central Park hotel.

Another $9.9 million will go toward the city’s Homelessness Resolution Fund – a 0.25% sales tax approved by voters in 2020, and again in 2022.

About $3.3 million will be redirected from equipping rec. centers for emergency overnight sheltering (such as during severe weather events in the winter, for example) with the hope that by redirecting this money toward more permanent housing, fewer unhoused residents will need to seek out rec. centers for overnight stays.

Mayor Johnston addresses funding to house 1,000 homeless by end of 2023

An additional $3.1 million will remain from the purchase of the Best Western hotel, which will be “just a little bit protection for us in case there are any overruns and costs,” Johnston said during the news conference Tuesday, with another $2.2 million going toward improvements at the 48th Avenue Shelter, which officials said came in under budget.

Lastly, HOST will use $2 million directly from its funds to pay for the mayor’s plan, which has been rebranded House1000.

Another $15 million from other city sources will go toward the homelessness emergency response, including $8 million from the city’s coronavirus response funds, $4.7 million from interest earned on unused ARPA money, and $2 million from capital improvement funding from real estate acquisition costs that came in under budget.

What’s all that money going to buy?  

Johnston will divert the majority of that money — $24.3 million — toward purchasing and operating the Best Western hotel, which will cost about $18.9 million alone, with the $5.4 million remaining going toward leases and operations at future hotels purchased by the city to house residents.

Another $19.6 million will be spent on micro-communities, like pallet shelters and tiny homes. Those funds will pay for site preparations and utilities, operations as well as support services.

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About $4 million will go toward reducing the time it takes for unhoused Denverites to get into leased units.

Lastly, the city will spend $750,000 to address the encampment response, including outreach, transportation, temporary port-a-lets (bathrooms) and other related services.

“The key part comes in our outreach”

Johnston on Tuesday remained confident he'll be able to deliver on his promise to house 1,000 people by the end of the year.

“We are confident that we’re going to be able to deliver on that,” Johnston said after presenting the budget for this homelessness plan. “The key part now comes in our outreach to all those folks that are unhoused, identifying what their individual needs are as we start the encampment resolution process.”

The funds are not yet set in stone, however, as Denver City Council is expected to review portions of the funding that require approval.

Johnston will share details on the city’s proposed 2024 budget this coming Thursday.

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