LINKAGE FEES

Denver Revised Municipal Code ch. 27, art. V, div. 2

in effect

Denver Revised Municipal Code § 27-151 Legislative findings and intent.

Sec. 27-151. - Legislative findings and intent. The city council has determined that Denver is experiencing an unprecedented escalation in housing costs, and thus a critical lack of housing opportunities for households with low or moderate incomes. In recent years, Denver has ranked at or near the top of national reports of U.S. cities in terms of inflation in housing costs. The declining availability of low and moderately priced housing in Denver forces persons employed in the city to either spend a disproportionate percentage of their disposable income on housing, thus sacrificing other necessities of life, or forces them to seek housing opportunities outside the city. Households living outside of the city spend additional time and resources commuting, which leads to stress, increased child-care requirements, and increased air pollution. The extraordinary housing cost increases in Denver are driven, in part, by the pace of population and job growth in the city, resulting in a situation where demand for housing has far outpaced supply, especially for persons who may find jobs in Denver's growing economy but are employed at low or moderate income levels. The city council has determined that it is in the public interest to address the severe social and economic impacts to the city and its citizens caused by the increasing gap between supply and demand for housing for funding programs designed to preserve and increase the supply of affordable housing available to low and moderate income households. The city council specifically finds that it is appropriate to fund a portion of the costs of such programs from a linkage fee on new development for the following reasons: (a) New residential and non-residential development is demonstrably associated with the generation of new jobs at various income levels, with the number of jobs associated with any particular development being correlated with the type and size of the development. (b) When jobs at a low or moderate income level are generated as a direct consequence of new non-residential development, employees receiving such incomes will experience a lack of housing availability and affordability in Denver under current market conditions unless efforts are taken by the city to increase housing opportunities to keep pace with job growth. (c) The city council also specifically finds that job growth associated with new residential development is directly related to the income and spending capacity of the household occupying the residence and that the size of the residence, as measured in gross floor area, correlates with the income and spending capacity of the residents, thus causing a larger residence to drive more job growth and more concomitant secondary housing demand than a smaller residence. (d) For the foregoing reasons, the city council has determined there is a direct nexus between both non-residential and residential development, job growth, and demand for new housing that is affordable to households with low or moderate incomes. (e) The city council acknowledges that monetary exactions on new development cannot exceed an amount that is justified by the impacts caused by the development. The city council has determined that the fees set forth herein fall far below the amount of revenue that would actually be necessary to meet the demand for new affordable housing driven by the job growth that is associated with new development, and thus these fees do not exceed the applicable standards that define the maximum legally justifiable fee. (f) The city council further acknowledges that the revenue derived from the fees provided herein must be used, not to address the existing gap between supply and demand for affordable housing in the city, but instead to mitigate future increases in the gap caused by new construction which will lead to new employment opportunities in the city, and the increased demand for affordable housing associated with such employment. (g) The city council has determined to set the affordable housing linkage fees set forth herein at a level much lower than those imposed by other cities, in an effort to ensure that the fees do not impair the feasibility of any development project in the city. (h) The foregoing findings are supported by the "Denver Affordable Housing Nexus Study" prepared for the City and County of Denver by David Paul Rosen & Associates and dated September 8, 2016, the contents of which are expressly incorporated herein as a part of the legislative findings of the city council. (i) The linkage fees set forth in division 2 of this article are supported by the "Expanding Housing Affordability: Feasibility Analysis" prepared for the City and County of Denver by Root Policy Research and dated September 28, 2021, the contents of which are expressly incorporated herein as a part of the legislative findings of the city council. (j) The city council has further determined that, since Denver does not impose nearly the range or amount of development impact fees as are imposed by virtually every other municipality throughout the Denver metropolitan area, the fees set forth herein will not place the city at a competitive disadvantage in relation to neighboring jurisdictions in terms of accommodating future population growth and economic development. (Ord. No. 625-16, § 1, 9-19-16; Ord. No. 47-20, § 34, 3-16-20; Ord. No. 426-22, § 1, 6-6-22)

Denver Revised Municipal Code § 27-152 Definitions.

Sec. 27-152. - Definitions. The following words and phrases, as used in this division 2, have the following meanings: (a) Dwelling unit; dwelling, single unit; dwelling, two-unit; and dwelling, multi-unit shall have the same meaning as these terms are used in article 11 of the Denver Zoning Code. (b) Gross floor area (GFA) shall have the same meaning as the term is defined in the International Building Code, excluding parking garages and any other structures or areas used exclusively for the storage or parking of vehicles. (c) Primary agricultural uses shall have the same meaning as the term is used in article 11 of the Denver Zoning Code. (d) Primary civic, public and institutional uses shall have the same meaning as the term is used in article 11 of the Denver Zoning Code. (e) Primary commercial sales, services and repair uses shall have the same meaning as the term is used in article 11 of the Denver Zoning Code. (f) Primary industrial, manufacturing and wholesale uses shall have the same meaning as the term is used in article 11 of the Denver Zoning Code. (g) Primary residential use shall have the same meaning as the term is defined in article 11 of the Denver Zoning Code, and shall be deemed to include any and all primary residential uses and all uses accessory to a primary residential use, except accessory dwelling units, as set forth in article 11 of the Denver Zoning Code. (h) Structure shall have the same meaning as the term is defined in article 13 of the Denver Zoning Code, but shall not include any partially enclosed or open structures such as porches, balconies, courtyards, and similar structures. (Ord. No. 625-16, § 1, 9-19-16; Ord. No. 426-22, § 1, 6-6-22)

Denver Revised Municipal Code § 27-153 Imposition of linkage fee.

Sec. 27-153. - Imposition of linkage fee. (a) In general. Except as provided in section 27-154, an affordable housing linkage fee shall be imposed prior to the issuance of a building permit for any new structure or for any addition to an existing structure that increases the gross floor area of the existing structure, according to the following fee schedule: Use Within a Structure | Fee Per square foot of GFA Effective July 1, 2022 | Effective July 1, 2023 | Effective July 1, 2024 | Effective July 1, 2025 Dwelling unit(s) of 1,600 square feet or less of GFA within a single-unit dwelling, two-unit dwelling, or multi-unit dwelling or live/work dwelling of 9 dwelling units or less. | $1.75 | $2.83 | $3.92 | $5.00 Dwelling unit(s) of more than 1,600 square feet of GFA within a single-unit dwelling, two-unit dwelling, or multi-unit dwelling, or live/work dwelling of 9 dwelling units or less. | $2.50 | $4.33 | $6.17 | $8.00 Any primary residential use other than dwelling units. | $2.25 | $3.83 | $5.42 | $7.00 Any primary commercial sales services and repair uses or any primary civic public or institutional uses in a typical market area as typical market area is defined in section 27-219. | $2.90 | $3.93 | $4.97 | $6.00 Any primary commercial sales services and repair uses or any primary civic, public or institutional uses in a high market area as high market area is defined in section 27-219. | $3.65 | $5.43 | $7.22 | $9.00 Any primary industrial, manufacturing and wholesale uses or any primary agricultural uses. | $0.96 | $1.47 | $1.99 | $2.50 (b) Mixed use structures; split properties. When a structure is proposed to be constructed and used for any combination of the uses set forth in subsection (a) of this section, the required linkage fee shall be determined based upon an apportionment of the gross floor area in the structure attributable to each of the proposed uses. When a structure is proposed to be constructed upon any property that is partially subject to either of the exceptions to applicability of the fee as set forth in subsection 27-154(a), (b) or (k), the required linkage fee shall be applied only to the gross floor area of construction that is physically located outside of the portion of the property to which the exception applies. (c) Voluntary compliance with Mandatory Affordable Housing, Article X, Chapter 27. An applicant for a building permit for any structure that contains dwelling units that would be subject to the payment of the linkage fee may voluntarily comply with Mandatory Affordable Housing, Article X, Chapter 27 rather than pay the required linkage fee. (d) Modification of existing structures. The linkage fees imposed by this section shall not be required for the issuance of building permits associated with any improvement, repair, remodeling, tenant finish, or any other modifications to an existing structure unless the modification increases the gross floor area of the structure. (e) Annual inflation adjustment; future fee increases. (1) On July 1, 2026, and on each July 1 thereafter, the fees set forth in subsection (a) of this section shall be adjusted in an amount equal to the percentage change from the previous calendar year in the CPI-U. The adjustments will be reflected in a fee schedule issued by the executive director (manager) of the department of community planning and development and made publicly available in advance of the fees becoming effective. The annual inflation adjustment shall apply to and be collected in conjunction with the issuance of any building permit on or after July of the year in which the adjustment is made, regardless of when the application for the building permit was made. (2) As used in subsection (e), the term "CPI-U" means the United States Department of Labor Statistics (Bureau of Labor Statistics) Consumer Price Index for All Urban Consumers, All items, for the Denver-Aurora-Lakewood, Colorado metropolitan area (1982-84-100). In the event that the CPI-U is substantially changed, renamed, or abandoned by the United States Government, then in its place shall be substituted the index established by the United States Government that most closely resembles the CPI-U, as determined by the executive director of the department of housing stability. (3) Except as provided in paragraph (1) of this section, the fees set forth in this section shall not be increased prior to January 1, 2028. On and after January 1, 2028, the fees set forth in this section shall not be increased in excess of the inflation adjustments set forth in subsection (2) unless and until the city commissions another study to evaluate whether the fee increase will affect the economic feasibility or any type of development to which the fee increase is proposed to be applied. (Ord. No. 625-16, § 1, 9-19-16; Ord. No. 47-20, § 35, 3-16-20; Ord. No. 426-22, § 1, 6-6-22)

Denver Revised Municipal Code § 27-154 Exceptions.

Sec. 27-154. - Exceptions. The payment of linkage fees as set forth in section 27-153 shall not be required for the issuance of a building permit under any of the following circumstances: (a) Construction upon any property which is, alone or in combination with other properties, the subject of a contractual commitment or covenant that is dated and properly recorded prior to the imposition of a linkage fee on the first structure on the property and is enforceable by the city to construct affordable housing, including by way of example any development or subdivision agreement which includes an affordable housing covenant and to which the city is a party, any city-approved plan to build moderately priced development units (MPDUs) under article IV of this chapter 27, any city-approved plan to build affordable units in place of the linkage fee, any high impact development compliance plan executed and recorded pursuant to article X, division 3 of this chapter 27 where a payment of fees to support affordable housing development is contained in the high impact development compliance plan, or an affordable housing plan executed to meet incentive requirements under article VI of this chapter 27. The exception provided by this subsection (a) shall apply only for so long as such contractual commitment or covenant to construct affordable housing remains in effect. Construction upon property that, alone or in combination with other properties, was originally developed under such a contractual commitment or covenant and is substantially proposed for redevelopment shall be subject to payment of linkage fees hereunder unless the redevelopment is governed by a new contractual commitment or covenant to construct affordable housing, or otherwise qualifies for an exception under any other provision of this section. (b) Construction upon any property subject to an obligation as a condition of zoning to provide affordable housing on the property. (c) Structures that are constructed with the support of any combination of federal, state or local financial resources, including private activity bonds, tax credits, grants, loans, or other subsidies to incentivize the development of affordable housing, including support from the affordable housing permanent funds created in section 27-150, and that are or will be restricted by law, contract, deed, covenant, or any other legally enforceable instrument to provide housing units only to income-qualified households. This exception shall apply to any housing project financed or constructed by or on behalf of the Denver Housing Authority. (d) Residential dwelling units that are built by any charitable, religious, or other nonprofit entity and deed-restricted to ensure the affordability of the dwelling unit to low and moderate income households. (e) Structures that are built by any charitable, religious or other nonprofit entity and that are primarily used to provide, shelter, housing, housing assistance, or related services to low income households or persons experiencing homelessness. (f) Construction by or on behalf of the federal, state or local governments or any department or agency thereof, to the extent any or all of the gross floor area in the structure will be used solely for a governmental or educational purpose. (g) Any structure that is being reconstructed up to the legally established gross floor area due to involuntary demolition or involuntary destruction as defined in article 13 of the Denver Zoning Code, but which also includes involuntary manmade forces. (h) An addition of four hundred (400) square feet of gross floor area or less to an existing structure containing a single-unit dwelling or a two-unit dwelling. (i) Accessory dwelling units as defined in article 11 of the Denver Zoning Code. (j) Any gross floor area of a structure containing an education use as defined in article 11 of the Denver Zoning Code, including any student housing operated by an education use. (k) Any gross floor area of a structure containing residential development, as defined in section 27-219, that is subject to Mandatory Affordable Housing, article X of this Chapter 27. (Ord. No. 625-16, § 1, 9-19-16; Ord. No. 1407-18, § 7, 12-17-18; Ord. No. 47-20, § 36, 3-16-20; Ord. No. 426-22, § 1, 6-6-22; Ord. No. 1154-24, § 1, 9-30-24)

Denver Revised Municipal Code § 27-155 Reserved.

Denver Revised Municipal Code § 27-156 Collection and remittance of linkage fees; reporting.

Sec. 27-156. - Collection and remittance of linkage fees; reporting. (a) The responsibility for the calculation and collection of linkage fees shall reside with personnel in the department of community planning and development, and the fees required by this division shall be collected in conjunction with the administration of the city's system for issuing building permits. Any and all linkage fees applicable to a construction project shall be paid in full prior to the issuance of any building permit, excluding the shoring or excavation permit, for that project. For projects such as townhomes where units receive separate building permits, fees shall be assessed on a permit-by-permit basis. All fees collected by the department shall be remitted to the affordable housing linkage fee revenue fund as provided in section 27-150 and used exclusively for the purposes set forth therein. (b) If, after the issuance of a building permit and collection of the applicable linkage fee but before the issuance of a certificate of occupancy, the amount of gross floor area of the construction project increases or a decision is made by the applicant to change the use of the structure to a use category for which a higher linkage fee would be imposed under section 27-153, then the applicant shall be required to pay additional linkage fees in compliance with this division. (c) Any dispute over the applicability or calculation of the linkage fees may be appealed by the applicant for a building permit to the executive director (manager) of the department of community planning and development, who shall determine such appeals in consultation with the executive director of the department of housing stability. (d) Linkage fees previously paid by an applicant at building permit issuance may be refunded from the affordable housing linkage fee revenue fund if it is later determined on appeal or otherwise by the executive director (manager) of community planning and development that the fees were not due and owning under this division, if a decision is made by the applicant after a building permit has been issued to reduce the gross floor area of the construction project or to change the use of the structure to a use category for which a lower linkage fee would be imposed under section 27-153, or if the building permits for the project lapse or are relinquished by the applicant without the project building built. The executive director (manager) of community planning and development shall not be obligated to make any refund under this subsection (d) unless the applicant files a written request for a refund with the executive director within sixty (60) days from the day any grounds for a refund arise. (e) After a building permit has been issued and the applicable linkage fees have been paid, no additional fees shall be required under either of the following circumstances: (1) If the original building permit is cancelled in order to issue a replacement building permit to change the general contractor; or (2) If modified drawings for the construction project are submitted and logged in for review, so long as the modified drawings do not increase the overall gross floor area of the project. (f) The departments of community planning and development and housing stability shall provide a publicly available online resources to report on linkage fee funds collected, how linkage fee funds were spent, and approved reductions and waivers as enabled in section 27-157. (Ord. No. 625-16, § 1, 9-19-16; Ord. No. 47-20, § 39, 3-16-20; Ord. No. 426-22, § 1, 6-6-22)

Denver Revised Municipal Code § 27-157 Reductions and waivers.

Sec. 27-157. - Reductions and waivers. (a) The executive director of the department of housing stability may reduce or waive the amount of linkage fees that would otherwise be imposed upon a specific development under section 27-153 if the applicant for a reduction or waiver demonstrates that the required amount of fees exceeds the amount that would be needed to mitigate the actual demand for affordable housing created by the development. An application for such a reduction or waiver shall include information showing the reduced affordable housing impacts created by the development, based upon the actual characteristics of the development including, for example: (1) The unique characteristics and space utilization of the workforce that will occupy a non-residential development and the demand of that particular workforce for affordable housing; (2) A non-residential development that will involve a structure built for and suitable solely for a specific use involving few or no employees; or (3) The unique characteristics of the residents who will occupy a residential development, and the likelihood those particular residents, due to their disposable household income or projected spending patterns, will not drive additional employment requiring additional affordable housing. (b) The executive director shall promptly notify in writing the executive director (manager) of the department of community planning and development of any reduction or waiver or linkage fees granted under the authority of this section. (c) If the requested reduction or waiver has not been approved or denied by the time of building permit issuance, then the applicant for a reduction or waiver request may pay the linkage fees in accordance with section 27-153. If a reduction or waiver is approved by the executive director after payment of linkage fees, or later determined on appeal, then the appropriate amount of linkage fees already paid by the applicant will be refunded. (Ord. No. 625-16, § 1, 9-19-16; Ord. No. 47-20, § 40, 3-16-20; Ord. No. 426-22, § 1, 6-6-22)

Denver Revised Municipal Code § 27-157.5 Regulations.

Sec. 27-157.5. - Regulations. The director of the department of housing stability and the director of the department of community planning and development may cooperatively adopt rules and regulations to administer this division. (Ord. No. 426-22, § 1, 6-6-22)

Source: City and County of Denver, Revised Municipal Code and Charter (Municode Library, library.municode.com)URL: https://library.municode.com/co/denver/codes/code_of_ordinances?nodeId=TITIIREMUCO_CH27HO_ARTVDEFUAFHO_DIV2LIFEFetched: 10/27/2026