Colorado City Plans to Spend Half of $48.6M Homeless Budget on Hotels

(The Center Square) – Denver Mayor Mike Johnston’s administration plans on spending half of the $48.6 million budgeted for his homeless plan on purchasing and operating a former hotel, additional leases, and operating costs.

Utilizing leased units for rehousing homeless people ($4 million) and purchasing, leasing, and converting hotels – including a former Best Western Hotel – to include on-site wraparound services ($24.3 million) are two of four primary strategies Johnston presented on Tuesday to prepare for the 2024 fiscal year budget. The other two are creating micro-communities – made up of tiny homes or pallet shelters – with wraparound services ($19.6 million), and closing encampments and preventing them ($750,000).

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The projects will be funded with $37 million from Denver’s Department of Housing Stability. The amount includes $16.1 million in federal American Rescue Plan Act funds for the purchase of the Best Western hotel. An additional $15 million includes $8 million in COVID response funding from the city’s general fund and $4.7 million in interest earned on ARPA funding.

In a briefing with media on Tuesday, Johnston was excited someone noticed the amount of funding was $3 million greater than planned expenditures and said "padding" could pay for additional costs and overruns.

“We find as you get to a site the clearance is tougher than you thought, the utility hookups are more complicated or the layouts are required to be done differently,” Johnston said. “So this is just a little bit of flexibility provided to us. We still have more sites we’re working on developing and other potential partners to bring on.”

Johnston made addressing homelessness a priority throughout his campaign to become mayor. He said continuing past strategies addressing encampments would be harmful.

“That is actually the single most dangerous strategy, keeping folks living in encampments that are unsupervised, unstructured, and unsafe," Johnston said. "We know when we get people out of these settings and inside settings with wraparound services, that have staff around the clock, that have interventions, that have requirements for identity to get in – not walk-up facilities – these are the safest, most stable structures.”

Johnston also said addressing homelessness now is important due to the high cost of housing in Colorado and the potential of a growing population of unhoused people.

“An important reminder is 40% of the people who are unhoused in the city right now have jobs,” Johnston said. “They just can’t make enough money to pay the first and last month’s rent. So what we’re really working on is getting folks into these transitional, supportive housing units so we can then work on expanding the number of affordable units available across the city.”