Housing Stability bypasses rules to reduce affordable rental units

Housing Stability bypasses rules to reduce affordable rental units

Published on April 27, 2026

En español(PDF, 164KB)

DENVER - The Department of Housing Stability is not ensuring the required number affordable rental units are being built for people with limited incomes, and it made this decision without getting council approval, according to a follow-up report of the Affordable Housing audit from Denver Auditor Timothy M. O'Brien, CPA.

"Housing Stability bypassing city processes could mean fewer families have access to an affordable place to live and other families will need to wait longer for an affordable place to live," said Auditor O'Brien.

The department did not fully implement 17 of 19, or 89%, of our recommendations to address affordable housing program risks involving city processes, property inspections, wage compliance, and data management.

Rental unit development reduced, delayed

The department oversees the development and preservation of affordable housing in Denver and is supposed to seek ways to increase available housing for people making lower incomes. It carries out this goal through extensive housing agreements, like one with Denver Housing Authority.

But Housing Stability and Denver Housing Authority continued to not follow the city's Executive Order No. 8 and changed project requirements without first amending their agreement and obtaining the City Council's approval.

Since our original audit, they reduced the number of rental units scheduled to be built for households earning no more than 80% of the area median income from 1,294 to 1,161, which is a 10% decrease.

But we also found the decrease in available rental units is further impacted because 202 of the 1,161 units, or 17%, are set to be rented to people earning more than the 80% threshold. This would mean rent for these units will cost higher than ordinance allows.

In addition, we found the department and the housing authority are pushing back the development due dates for units. And they are changing the scope of work to exclude permanent supportive housing and supportive services for those experiencing or are at risk of homelessness.

Furthermore, the department is not ensuring the housing authority is providing the city status reports with required information, like the number of people housed and costs of units developed under the agreement. We requested but did not receive agendas or meeting minutes that may include discussions or decisions about the amendment.

"Housing Stability and Denver Housing Authority moved forward with these adjustments without the authority to do so. When asked to provide documentation supporting their choice, they did not do it," said Auditor O'Brien. "Their reduction of units and delayed development means fewer people have opportunities to live in an affordable homes."

Other recommendations not implemented

Issues with data stored in Housing Stability's Salesforce software - like fields with missing information - persist from our original audit. The department's lacking procedures and reliance on existing Salesforce guidance led to reports generated with data errors and missing information.

The department could not provide evidence it was reviewing who has access to affordable housing data. The risk remains that staff may make unapproved changes to data.

It is also unclear what role the department has in overseeing the quality and safety of affordable housing through inspections. The department has not identified or documented a responsible party to inspect all units the city funds.

By not including Denver Labor - a division of the Auditor's Office responsible for enforcing wage laws - early in the contract process, Housing Stability cannot ensure the city is complying with wage laws for affordable housing contracts.

Positives

During our original audit, the Department of Housing Stability's policy to prioritize housing for those in most need was already well designed to minimize lawsuits. In our follow-up, the department made progress to further improve these policies.

The department is also now better able to monitor property managers' compliance with income requirements to ensure affordable housing is used for eligible renters.

AUDITOR TIMOTHY O'BRIEN, CPA
Denver Auditor

Denver Auditor's Office

201 W. Colfax Ave. #705 Denver, CO 80202
Email: [email protected]
Call: 720-913-5000
Follow us on Facebook Connect with us on X

• Auditor