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Despite a host of improvements to the city’s handling of affordable housing, the Denver Department of Housing Stability continues to miscalculate the sale and resale prices of affordable homes and declines to fix errors in documentation, a report from Denver Auditor Timothy O’Brien has found.

The original audit released in December 2018 found that the city was not correctly calculating income eligibility or collecting fees from developers for affordable housing. Affordable in Denver means that occupants pay no more than 30% of their gross income toward housing.

A recommendation to correctly calculate the maximum sale price of homes is still unimplemented, and the auditor’s office noted that information such as the mill levy rate, assessment rate, and homeowners and mortgage insurance rates remain excluded.

“The incorrect calculations for the maximum sale price tables could prevent some individuals from obtaining affordable housing who could actually afford the home,” auditors wrote,” or conversely, it could allow affordable homes to be sold to individuals who ultimately cannot afford them.”

O’Brien’s office noticed a mathematical miscalculation and a grammatical error in one housing covenant that it reviewed, which the auditors concluded “shows the review of this important language is not robust.” In other memoranda, the report noted that Housing Stability staff believes errors in non-legally-binding documents do not need to be addressed, but O’Brien’s office countered that such discrepancies could nevertheless communicate erroneous information to potential homebuyers.

“Calculating resale prices isn’t a one-size-fits-all process and the department needs to take extra care," O’Brien said. “Even with a thorough review of the numbers, getting the calculations right will be a challenge due to the complex and sometimes vague covenants on the thousands of affordable properties across the city.”

The majority of the original audit’s other recommendations are complete, including a new procedure for calculating applicants’ maximum payments and correction of an overpayment dating to 2014. Auditors also found that the city had not made any excess incentive payments to developers for affordable projects since the last audit.

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