Denver council advises mayor to focus on permanent housing, substance treatment

Outlining its budget priorities for next year, the Denver City Council on Thursday told Mayor Mike Johnston that providing temporary shelter to homeless people — the administration's primary strategy — is insufficient.

In a letter to Johnston, the council commended what it described as "laudable strides" under the mayor in getting thousands off the streets.

"Yet," the council said, "if we are to move people from sheltering toward stability, and if we are to prevent displacement and enable residents to 'age in place,' we must recognize that providing shelter is not enough.

The city's approach must be accompanied by "appropriate" programs and services, notably support for mental health and substance abuse treatment, as well as work training and placement, Jamie Torres and Amanda Sandoval, the council's top lieutenants, wrote the mayor, whose administration is preparing to draft Denver's spending plan for 2025.

The council is pressing for the shift in emphasis toward substance treatment as Metro Denver’s homeless crisis has worsened and become among the most acute in the nation, despite the city contracting for at least $274 million from 2021 through 2024 to keep people off the streets.

The council identified several ways the mayor and the city's Department of Finance could achieve this goal. Specifically, the council said next year's budget should focus on investing in “comprehensive support services to ensure long term housing stability.”

Some advocates have long sought more funding for treatment programs as a key component in any strategy to tackle homelessness.

A 2023 report from the Metro Denver Homelessness Initiative had described a homeless population that is struggling with mental and chronic health and, more notably, substance abuse challenges that, at least in Denver, haven't necessarily been the primary focus of the Johnston administration.

Last year's point-in-time count, an annual survey of homeless people in major metro centers, yielded several insights into the conditions homeless people faced, which the Metro Denver Homelessness Initiative report outlined. Notably, they faced chronic health conditions (24%), mental health concerns (31%), domestic violence (11%) and substance abuse (24%).

That a quarter of homeless people suffer from drug addiction can be glimpsed from the fact that 38% of the overdose deaths in Denver last year were homeless people.

Broadly speaking, Denver’s metro area successfully found permanent housing solutions for only 21% of those exiting homeless programs in 2022, well below the 33% rate that was the average that year for the 48 most populated metro regions, according to federal data.

And a review by The Denver Gazette of homeless provider contracts, invoices, performance outcomes and federal data shows that metro Denver trails many other major metropolitan regions in tackling homelessness with permanent housing. Just two out of every 10 people exiting homeless programming in Denver in 2023 found long-term permanent housing, a rate far worse than most other areas in the nation, according to the records.

As part of Johnston’s campaign to find shelter for 2,000 people by the end of this year, homeless individuals are funneled to eight sites. The city earlier said 1,481 people have been moved indoors under the mayor’s initiative, and that nearly 29%, or 428 of those individuals, have found permanent housing.

Still, virtually all those housing gains came from people who never went into temporary sheltering at one of the eight sites, suggesting much of the permanent housing gains came from cases that were low-hanging fruit and not tied to high-acuity individuals.

In their letter to Johnston, the council said one of the primary considerations should also be expanding funding available to assist in construction accessory dwelling units. An accessory dwelling unit, or ADU, is a detached structure on a single family home's lot that can be rented out.

The council pointed to the West Denver Collaborative ADU Pilot program, which offers up to $85,000 in savings for homeowners looking to finance one. City leaders see ADUs as a cost effective and efficient way to bolster Denver's housing stock with minimal construction impacts. Quite often, the city council will approve zoning changes to authorize ADUs with little to no resistance.

Finding the money for all the council’s requests may be difficult. Denver’s 2024 general fund budget is $1.74 billion — an increase over last year’s $1.63 billion general fund budget.

And even with a 4% increase, Johnston and the City Council sparred over funding specific programs before settling on a final amount, which was unanimously approved in November .

That's not including the scramble to address the city's illegal immigration crisis. The Johnston administration found $42 million in budget cuts to fund its $90 million response to the crisis .

It's unclear how the crisis will affect the city's spending priorities in 2025.

“We are working with the mayor to support his balanced budget, which includes extensive conversations with each councilmember. The letter council sent the mayor is an important part of our budget process and those conversations,” a spokesperson from the Department of Finance said. “We’ll be updating the revenue forecast later this summer and then council will have the opportunity to hear from agencies in the fall.”

Johnston must deliver a draft budget to the city council on or before Sept. 15, according to city staff. After that, the council will hold a series of hearings with city agencies before making recommendations to Johnston, who has until Nov. 8 to approve or veto any amendments.

The city's final budget must be approved by the council by Nov. 12.

Senior investigative reporters Christopher Osher and Jenny Deam contributed to this article.