Denver has finally released their sidewalk fee schedule that voters had approved two years ago. The new fee schedule will have huge consequences for property owners around Denver with some getting new fees of 2400+/ year. What is the sidewalk fee? How is this calculated for properties in Denver? Do you have to pay the fee even if you don’t have a sidewalk (yes, it’s Denver County!)?
What is the Denver sidewalk fee and who pays?
In November 2022, a citizen-led ballot initiative passed by voters directed Denver’s Department of Transportation and Infrastructure (DOTI) to build out, reconstruct, and repair the sidewalk network on behalf of the citizens of Denver. Since that time, DOTI has been working with a citizen task force to review and update the ordinance to develop a clear path forward to deliver the sidewalk improvements in a timely and affordable manner.
Even if you don’t have a sidewalk, you still pay a sidewalk fee. The fee creates a program to build, rebuild, and fix sidewalks all over Denver and ensures sidewalks are safe and easy for everyone to use, connecting people to places and services around the city.
How much will the Denver sidewalk fee cost homeowners and commercial property owners?
Property owners should expect to see sidewalk fees included as part of their semi-annual wastewater bills starting in the first half of next year. For many properties those charges will be $75 per bill or $150 for the entire year.
Any property including commercial properties with more than 230 linear feet of property frontage would pay an extra $3.50 per foot. Assuming a property has 1200 feet, the property owner would pay an extra $3400/year so a total of 3550. Think of a large apartment or retail location that has large frontage, this could lead to huge jumps for commercial properties. For example, a Walmart anchored center could have 4k feet of frontage which would lead to a 14k increase in taxes/year. Also note that these fees will be paid and increase every year based on inflation in Denver along with material/construction inflation.
The crazy part is that if you are billed 2400/year, the property owner could basically install a new sidewalk for that amount in front of their property every year, this program is a huge transfer tax.
Sidewalk fee further decreases the affordability
Almost every rental property in Denver will once again need to increase rents in order to break even. Although many politicians have this theory that property owners can just “eat” the new fee, the reality is far different. Rental property owners are already under duress due to 35% jumps in property taxes, 40-50% increase in insurance costs, huge jumps in labor and material costs for maintenance along with huge jumps in compliance costs like annual inspections for rental licenses. All of these items add up and continue to make Denver less affordable.
Is the sidewalk fee the straw that breaks the camel’s back in Denver real estate?
At some point property owners are going to say they have had enough and give up on Denver. Why would a property owner want higher taxes when they can go a few miles and be in Jefferson or Adams County with substantially lower fees and less hassle? Eventually they will. Although the sidewalk fee is not as big as it used to be it is still a large amount for many property owners. Think of the single family homeowner that now faces another 3k in taxes a year and ironically doesn’t even have sidewalks in their neighborhood.
Remember, Denver property taxes are already high and part of your property taxes already went to pay for things like sidewalks, roads, etc… so this new fee is a huge jump in revenue for Denver totaling almost 40 million dollars a year paid by property owners. Furthermore, every time I open the paper there is a new tax, bond measure, or some other fee requirement from Denver County. Until the citizens of Denver put their foot down affordable housing will become further out of reach and ultimately the downtown core will be hollowed out from the tax burden as we are seeing already happening with office vacancy hitting 50% in some parts of the city.
Unfortunately, I haven’t seen any trend in Denver County to slow down spending, ironically the opposite is occurring as seen in the last election! The continued spending is creating a doom loop for Denver County that will only accelerate.
Additional Reading/Resources
- https://coloradohardmoney.com/2024-colorado-elections-what-does-this-mean-for-you-and-your-real-estate/
- https://www.denverpost.com/2024/09/09/denver-sidewalk-fee-program-flat-rate-city-council-vote/
- https://denvergov.org/Government/Agencies-Departments-Offices/Agencies-Departments-Offices-Directory/Department-of-Transportation-and-Infrastructure/Programs-Services/Sidewalks
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Glen Weinberg personally writes these weekly real estate blogs based on his real estate experience as a lender and property owner. He is the owner of Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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