A resolution approving and evidencing the intention of the City and County of…

This resolution authorizes the issuance of up to $23 million in Multifamily Housing Revenue Bonds for the Loretto Heights Family Apartments project. Multifamily Housing Revenue Bonds are tax-exempt bonds issued by a local government on behalf of a private developer. The bonds allow developers to borrow money at lower interest rates because investors do not pay federal income tax on the bond interest. The city itself typically does not repay the bonds from its general fund; instead, the developer repays bondholders using revenue generated by the project, such as rent payments.

The constitutional and legal basis for this type of financing rests in Colorado statutes authorizing local governments to issue revenue bonds for affordable housing purposes, as well as federal tax code provisions (Section 142 of the Internal Revenue Code) that allow tax-exempt status for qualified residential rental projects. The city's approval signals its formal intent to serve as the bond issuer, which is required to unlock the tax-exempt status.

The fiscal impact to Denver taxpayers is generally considered low in direct terms, because the bonds are repaid by the project's revenue rather than city tax dollars. However, the federal government absorbs an indirect cost through foregone tax revenue on bond interest. If the project fails financially, there could be reputational or administrative costs to the city, though bondholders typically bear the financial risk.

The Loretto Heights campus has significant historical context in Denver. It was the site of a historic Catholic college that closed and was later redeveloped. The area has been the subject of substantial community planning discussions around preserving historic structures while adding housing. This specific project focuses on family-oriented affordable housing units, addressing Denver's well-documented shortage of affordable rentals.

Stakeholders affected include low and moderate income families seeking housing in southwest Denver, the developer and construction workforce involved in the project, existing neighborhood residents in Council District 2, and investors who purchase the bonds. Denver's broader housing policy goals, which include increasing affordable unit inventory, are also advanced by this type of financing.

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The Denver City and County Council is weighing a resolution to authorize up to $23 million in Multifamily Housing Revenue Bonds for the Loretto Heights Family Apartments, an affordable housing development planned for Council District 2 in southwest Denver. The bonds are not backed by city tax dollars. Instead, the city acts as the issuing authority, which allows the developer to access tax-exempt financing under federal law, lowering borrowing costs and making the project financially viable. The developer repays bondholders using rental income from the completed building. The Committee approved the measure on July 8, 2025, and the full Council is expected to vote by August 11, 2025.

Supporters of the resolution argue that this financing tool is one of the most efficient ways a city can encourage affordable housing construction without drawing on its general fund. Affordable housing advocates point to Denver's persistent shortage of family-sized rental units at prices accessible to working households, and note that the Loretto Heights area has been a focus of community-supported redevelopment planning. Proponents also emphasize that the city's legal exposure is limited because repayment comes entirely from project revenues rather than municipal budgets.

Opponents and skeptics raise concerns about the indirect cost to federal taxpayers, since the tax-exempt status of the bonds reduces income tax revenue collected by the federal government. Some fiscal conservatives question whether this subsidy structure is the most transparent way to allocate housing resources, preferring direct appropriations that are subject to annual budget scrutiny. Neighborhood stakeholders occasionally raise concerns about the pace of development at the historic Loretto Heights campus and whether infrastructure can accommodate new residential density.

For ordinary Denver residents, the resolution represents one piece of the city's broader effort to address housing affordability. If approved, the project would add family-oriented affordable apartments to a neighborhood undergoing significant change, potentially providing stable housing for households who might otherwise be priced out of the Denver market. The bond structure means city residents are not directly on the hook for repayment, though the long-term success of the project depends on the developer's ability to maintain occupancy and manage the property responsibly.