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HOST explains how Denver enforces affordable-housing covenants; city officials press for data
Summary
Deputy director Adam Lyons briefed council committee members on rental and homeownership covenants—how they are written, monitored and enforced—and answered questions about term lengths, inspections and the Barth Hotel’s recent compliance history; city attorney staff said covenants are enforceable and the city will pursue remedies where required.
The Community Planning and Housing Committee received a detailed briefing Sept. 9 from Adam Lyons, deputy director of housing opportunity at the Department of Housing Stability (HOST), on how the city records, monitors and enforces affordable-housing covenants for rental and homeownership projects funded or regulated by the city.
Lyons said rental and occupancy covenants recorded on property titles serve two primary functions: they limit tenant incomes to specified area median income (AMI) bands and they cap rents for those units. Rents must not exceed the lesser of HUD’s fair-market rent for comparable units or 30% of household income for the designated AMI unit, he said; the city publishes AMI and rent thresholds each year and adopts HUD figures into its agreements. Lyons illustrated how projects assign AMI targets by unit and how projects may “float” AMI designations over time so overall unit counts at each AMI level remain intact.
Covenant terms and enforcement: Lyons said the city’s preservation ordinance (DMRC Section 28) requires a minimum 60-year affordability term for developments that receive city subsidy; the Expanding Housing Affordability (EHA) policy requires 99-year restrictions on projects subject to that policy. HOST typically records covenants with the county clerk and recorder, conducts annual reporting and sample inspections (every three years for a rotating sample), and requires record retention for household income, rent rolls and demographic data. Leases for affordable units must be at least 12 months unless both parties agree otherwise, and certain fee and lease provisions common in market-rate leases are prohibited in affordable units.
Lyons said covenants can be layered (for example, city covenants alongside CHFA low-income-housing-tax-credit land use regulatory agreements) and that the most restrictive covenant generally prevails. For homeownership projects, HOST often relies on community land trusts and land leases (typically recorded for 99 years); those land leases include a city rider giving the city enforcement rights if a land trust fails to enforce its own agreement. Lyons said land-lease fees are typically nominal — about $100 per month — and are calculated so mortgage-plus-fees remain affordable.
Council members asked about enforcement and expiring covenants. Lyons said HOST keeps a Salesforce-based inventory and tracks covenant expirations; the department attempts preservation strategies (reinvestment, debt restructuring, negotiation on sale) to keep units affordable where possible. Lyons said the city had recently reinvested in the Barth Hotel (senior housing) in 2020 and recorded a new 60-year covenant at that time; the property later received a notice of noncompliance tied to building systems, and the owner chose to market the property. Lyons said a sale does not remove a recorded covenant: "If covenants run with the land... any buyer of the property would still be subject to the same covenant requirements," he said.
Legal enforcement: Megan Waples of the City Attorney’s Office joined the meeting and confirmed the city’s position: covenants recorded on title are enforceable and the city will pursue legal remedies where necessary. Lyons and Waples cited a prior homeownership dispute in Green Valley Ranch in which a court upheld the city’s covenant-related protections.
Why it matters: Lyons and council members tied the topic to the city’s preservation efforts. Councilmembers asked how many covenants will expire in the near term and whether the preservation ordinance should be amended to better address homeownership covenants; Lyons said HOST will follow up with counts and noted that recent state law changes (House Bill 1175) and the preservation ordinance affect preservation strategy.
Data access: Lyons told the committee that HOST maintains a public dashboard that lists existing affordability covenants and that the dashboard can be filtered by council district, property type and city-funded vs. non-city-funded restrictions. Councilmembers asked staff to provide updated counts of units with covenants approaching expiration.
(Ends)
