One recommendation from Lakewood’s Strategic Housing Plan (SHP) is to incentivize development with city funds. A variety of costs and methods are discussed. Specific spending decisions have not been made but City Manager Hodgson says staff is ready with a proposal to work with  the Community First Foundation  in a donor-advised fund. Funds could be ready as early as first quarter 2024. Hodgson suggested a starting amount of $500,000.

In most cases, direct funding would not be economical so available funds could be used to leverage other funds. For example, city funds could match against other government grants for development.

There are significant other costs proposed:

• Increased staff costs
• Increased administrative costs
• Rebating city property taxes
• Waiving permit costs
• Paying for property damage
• Increasing city funds for direct housing vouchers
• Utilizing resident TABOR refunds
• Non-direct costs such as impacts of loosened parking requirements

The other favored source of proposed funding would be from an increase to the Accommodation Tax (currently 3%). This hidden tax increase would have far-reaching effects:

• Proposed changes would almost double the tax
• Increased taxing makes it less economical for hotels, so would therefore decreases hotel viability. Hotels drive other tourism-based businesses.
• Increased hotel fees make Short-Term Rentals (STRs) more attractive since they are immune to the tax.
• Increased STRs contributes to needing more housing which will need more financial housing incentives while driving down the business that is providing the funding.

The reason for the accommodation tax in the first place was to fuel economic development but that purpose has been modified for public safety by Lakewood City Council.

The city has previously made funds available through the Community Block Grant Fund to pay for infrastructure costs for development. One benefit of having a new fund with the Community First Foundation would be that funds would be immediately available on the developers’ schedule, rather than waiting until grant approval time.

The indirect costs of increased residential services and decreased business opportunities cannot be directly calculated so are not considered.