In November, voters will be able to vote on the largest dedicated sales tax in Denver’s history after the City Council on Monday put a 0.5% tax increase to the vote that would significantly increase the number of affordable housing units in the city.

The 13-member council voted 9-4 to send the tax to voters. Now it’s up to residents of a city that’s quickly become one of the least affordable housing markets in America to decide whether or not to collect that half-percentage point on top of the city’s existing 8.81% effective sales tax.

“Now is the time to act,” said City Councilor Darrell Watson before voting with the majority.

How exactly the $100 million in additional tax revenue that this measure is expected to generate each year – if voters approve it – will be invested has not yet been decided.

Mayor Mike Johnston and his City Council supporters have talked about investing in programs like rental subsidies to help people stay in stable housing and down payment assistance to help lower-income Denverites get into the market and build wealth. The mayor has even floated the idea of ​​the city becoming an equity investor in new construction projects, which would give city leaders a direct say in the number of affordable units in new buildings and the rent levels to keep them affordable for lower-income residents.

Among a series of last-minute amendments adopted by the Council on Monday night was one that clarified the Council’s role in reviewing and approving the Fund’s first-year spending plan in January and cemented the Council’s authority to approve prioritization plans for funding in future years.

Even some council members who were uncomfortable with this ambiguity said they were aware of the great housing need in their districts and were willing to let voters decide.

“I will communicate the decision to the voters, but we have to be honest. There are good intentions, but there is a lack of clarity and concreteness,” said Councilwoman Jamie Torres before casting her yes vote.

Torres was the only member to change his vote after the council held a public hearing and preliminary vote last week. The referral proposal passed on first reading by an 8-5 vote, with Torres among the minority voting against it.

She was among members who wanted assurances that the tax revenue would be used to support Denver residents who research shows have the greatest need for more housing in their price range, namely those earning 80% of the area median income or less. The area median income (AMI) for Denver in 2024 is $130,400 for a family of four, or $91,280 for a single person, according to a chart provided by the city’s Housing Authority.

Concerns about the area’s median income limits were also addressed by an amendment on Monday. The amendment required the city to use the money raised by the tax only to support projects and programs that benefit renters earning 80% of AMI or less. Select mixed-income housing developments could still be eligible for assistance from the fund if the average cost of units in that development is available to renters earning 100% of AMI or less.

The third major change council members approved Monday was setting an expiration date for the tax. Without council or voter intervention, the sales tax — dubbed the “Affordable Denver Fund” by supporters — would expire on Dec. 31, 2064, 40 years from now.

Despite this distant expiration date, four council members declined to support sending the bill to voters. Kevin Flynn, Flor Alvidrez, Stacie Gilmore and Amanda Sawyer all voted no.

Gilmore was particularly critical of the process by which tax reform was brought to the council, saying there had not been enough public input. She feared tax increases could further increase the cost burden on low-income black and Latino families in her northeasternmost district.

Flynn opposed the tax increase even before the mayor officially announced it at a press conference on July 8, just seven weeks ago.

“I think we need to stop talking about making Denver affordable by raising the cost of living here,” he said.

The Affordable Denver tax will be on the ballot alongside a 0.34% sales tax increase that the City Council has already put on the ballot to raise money to financially support Denver Health, the city’s struggling hospital. If both taxes pass, it would increase Denver’s cumulative sales tax rate to 9.65%, among the highest in the state outside of certain mountain communities.

But even council members who worried about potential competition between the two measures – such as Council Member Chris Hinds, who received life-saving treatment at Denver Health – acknowledged that housing stability is a social factor that determines public health.