Advocates for more affordable housing units in Denver are floating the idea of what’s known as a “Ghost Tax” or VHT- vacant home tax- on Denver landlords as a new way to raise money to create more affordable housing in Denver. These kinds of taxes or fees are imposed on landlords whose properties are vacant and not rented for an extended period of time- typically about six months.
They are used as a tool in a handful of American cities and Canada to encourage property owners to rent or sell their homes and thereby increase the stock of affordable housing.
“Well, it’s certainly not very well thought through,” said Drew Hamrick, general counsel and vice president of government affairs for the Apartment Association of Metro Denver. “This is a level of intrusiveness in government that Denverites don’t want to tolerate and don’t want to live under.”
The vacant home fee idea was contained in a five-page letter sent in August to Mayor Mike Johnston and the Denver City Council from the Colorado Coalition for the Homeless, Enterprise Community Partners and Archway Communities, organizations dedicated to creating and maintaining affordable housing. The letter, obtained by CBS News Colorado, outlines numerous potential strategies to create more affordable housing in Denver. Measure 2R, pushed by Mayor Johnston, would have imposed a .05% sales tax in Denver to raise hundreds of millions of dollars for affordable housing, but the measure narrowly lost at the hands of voters last November.
In the letter obtained by CBS, the authors wrote, “Assessing a fee on rental units in the Denver market that are left vacant, with their rents unchanged for a minimum period of time, could bring in significant revenue for Denver. This approach”, said the letter, “is preferable than potentially taxing unoccupied second homes in Denver as there is less likely to be an abundance of such homes.”
Cathy Alderman, Chief Communications and Public Policy Officer for the Colorado Coalition for the Homeless, and one of the authors of the letter, said, “It’s our responsibility to be thoughtful about how to bring in the desperately needed revenue to make housing affordable for Denverites.”
In explaining the vacant home fee proposal, Alderman said, “We want to encourage landlords to lower their rents on units that are sitting vacant while people are living outside. Is there a way to incentivize that lowering of rent so the working-class folks and the people experiencing homelessness in Denver have a chance to get into a rental unit? I think vacancy fees might be a way to think about that,” said Alderman. “This is one potential option of many that we think is worth exploring.”
She said that with an estimated 27,000 empty rental units in the Denver metro area, she believes corporate landlords are refusing to reduce their rents to appropriate levels of affordability.
“I don’t think it’s unreasonable to ask the housing community, when they have empty units for long periods of time, to consider making those units available to lower-income households,” said Alderman.
