The New Mayor of Denver’s Budget Needs Millions More to Tackle the City’s Homelessness Crisis
By: Elina Rodriguez, Manager of Policy Advocacy, CEDP
Denver is in a declared state of emergency in response to surging homelessness. Since the beginning of the year, Denver landlords have filed over 9,200 eviction lawsuits against their tenants. The city is on track to break the all-time annual eviction record. By the end of 2023,12,000 households- nearly 30,000 people- will navigate the legal eviction process. This is more people than there are seats in Red Rocks Amphitheatre. Sadly, eviction filings are only a tiny part of the picture. Research shows for each eviction filed, two additional households choose to self-evict to avoid a legal process they can’t afford or win.
Evictions cause homelessness. Data cited by the National Low Income Housing Coalition supports that “eviction filings, which are the first recorded step in the legal eviction process, are associated with increases in sheltered homelessness in the following year.” A recent point-in-time (PIT) Count conducted by the Metro Denver Homeless Initiative found that the number one self-reported cause of homelessness in Denver is an inability to pay rent. The number two cause is eviction.
Once a family is evicted or displaced, they are forced into a market with historically high rents, an underfunded safety net, compounded by the exhaustion of federal emergency rental assistance, three to five months to be rehoused, and a homelessness response infrastructure that is beyond its breaking point.
If the Mayor and City Council want to end homelessness, they have to stop the mass housing displacement of Denverites that’s taking place every day. Tens of thousands of our neighbors are on the brink of losing their homes, and they should not have to enter the cycle of homelessness before the City offers them help. Critical investments in affordable housing and homelessness response must be paired with efforts to keep people housed.
Unfortunately, the Mayor’s proposed budget will reduce city-wide spending on emergency rental assistance by nearly 50%, just as eviction, displacement, and homelessness are reaching all-time highs. If Denver is ever going to end its homelessness crisis, the Mayor and City Council must allocate more of the city’s budget to rental assistance — a tool that has been proven effective in stopping evictions and preventing homelessness.
We urge City leaders to dedicate $30 million to an emergency rental assistance fund, an increase of $17.5 million over the currently proposed $12.6 million for FY2024. Absent other funding sources, we believe the City should draw on substantial cash reserves — held back for precisely this kind of emergency — to invest in stabilizing renters while continuing the critical work of re-housing people.
The $12.6 million currently budgeted for rental assistance would prevent approximately 2,300 evictions (18–25% of estimated annual eviction filings). This would leave an estimated 9,000–11,000 households to fend for themselves and likely experience displacement, intensifying the City’s homelessness crisis.
Conversely, based on rental assistance data, it takes around $5,500 to stabilize a household, so an emergency rental assistance fund of $30.1 million would prevent 5,000–6,000 evictions — roughly half of the current number. This is the bare minimum investment Denver needs to make to address the crisis we’re facing meaningfully, and it only works when paired with significant investments from the State of Colorado, nonprofits, and other philanthropic efforts.
By dedicating $17.5 million of existing cash reserves, currently slated to reach $262.2 million by the end of 2024, to emergency rental assistance, the City can prevent thousands of families from experiencing the trauma of eviction and homelessness.
Investing $17.5 million from existing cash reserves in emergency rental assistance would not jeopardize the City’s finances. It would reduce the City’s cash reserves to approximately 14.1% of the total budget. Denver would also retain a contingency budget of 2% and a TABOR reserve of 3%, totaling an additional 5% of the annual budget. Cash reserves of 14% (or 19% if contingency and TABOR reserves are included) would still exceed other cities of similar size, many of which keep around 5–10% of the budget in reserves. This investment would be consistent with internal policies restricting reserve funding for “extraordinary expenditure demands.”
Preventing an eviction through rental assistance is far less expensive than serving our unhoused neighbors once they enter the cycle of homelessness. In U.S. cities, the cost of serving someone experiencing homelessness can exceed $60,000 annually. Indeed, under the Mayor’s ambitious plan, providing shelter to 1,000 of our unhoused neighbors will cost $48 million — nearly $50,000 per person served. While the Mayor’s investment in responding to homelessness is critical, it is cost-effective and compassionate to prevent displacement and homelessness rather than pay for it once it’s occurred.
Not only can the City prevent suffering by investing in rental assistance, it can also save money. One study estimated that emergency rental assistance programs have a return on investment of between 208 and 366% in Colorado, even accounting for the fact that these programs cannot stabilize all recipients. This is supported by a recent joint report from the Housing Initiative at Penn, the National Low Income Housing Coalition, and the Reinvestment Fund, where survey respondents who received emergency rental assistance funding were more likely to live in their apartment or home (versus living with family or friends or being unhoused), less likely to owe back rent, and less worried about their overall housing status.
The math is simple. Evictions cause homelessness; stopping evictions stops homelessness. Rental assistance stops evictions.
If stemming the tide of the homelessness crisis in Denver is a priority for the Mayor, then the City needs to invest millions more in rental assistance to keep our families, friends, and neighbors in their homes.
Signed,
Community Economic Defense Project
Enterprise Community Partners
Colorado Coalition for the Homeless
Coloradans for the Common Good
Towards Justice
Community Investment Alliance
Colorado Children’s Campaign
Servicios de la Raza / Servicios Sigue
Together Colorado
ACLU of Colorado
GES Coalition
Neighborhood Development Collaborative
Denver Metro Tenants Union (DMTU)
Jewish Family Services
East Colfax Community Collective
New Era Colorado
