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Denver voters narrowly rejected Mayor Mike Johnston's plan to raise the local sales tax by 5 cents for every $10 spent in a bid to dramatically expand the city's affordable housing stock.
As of Friday evening, voters opposed the measure by a 50.74% to 49.26% margin, and Johnston conceded defeat over the weekend.
Proposed by Johnston and referred to voters by the Denver City Council, Ballot Issue 2R would have raised an estimated $100 million a year, the largest ever expansion of a local government affordable housing program in Colorado's history.
Concerns about the cost of living, however, cut both ways to defeat the measure at the ballot box.
Johnston acknowledged the measure's defeat this weekend in a social media post.
"Denverites continue to speak loudly about the need to confront rising housing costs across Denver," Johnston wrote, saying the measure fell by "the narrowest of margins."
"2R was one path to make Denver more affordable, but it's not the only path forward," he added. "I remain committed to finding new solutions to take on this challenge."
Sales taxes are generally considered regressive, because the less money you make, the more of your income you spend on them. A sales tax hike could disproportionately raise costs on some of the very people the program is trying to help. Notably, the sales tax increase would not have applied to many essentials, such as food, fuel, medical supplies and some personal hygiene products.
City officials said the funding would have allowed Denver to add more than 40,000 affordable housing units over the next decade, enough to meet its projected need for low-income housing over that period.
Most of the money was expected to be set aside for affordable rental units for low- and middle-income renters. Some would have gone toward down payment assistance for first-time homebuyers.
The median rent in the Denver metro area today is just shy of $1,900 a month. That's considered unaffordable for those making less than $75,000 a year. Studies show that most renters now spend more than 30% of their income on housing.
The median home price is over $600,000 -- about double what the average middle-income household can afford.
Taxes will go up anyway for Denverites and visitors, after voters approved a separate ballot measure to raise sales taxes for Denver Health, bumping the rate to 9.15%. If both had passed, the measure would have raised the city sales tax to among the highest in the state -- 9.65%.