Denver’s $10 Motel Sale: A Unique Step in Tackling Homelessness

Person sleeping on park bench with cardboard sign.

Denver is set to sell a former motel for a mere $10, aiming to transform it into supportive housing and address the homeless crisis, but the task at hand is far from simple.

Key Insights

A city-owned motel in Denver, purchased for $9 million, has remained empty and may be sold this year. The city seeks a buyer to turn it into housing for the homeless.
The cost to buyers includes significant renovations to meet building code compliance. The property’s sale will occur, assuming a 99-year income-restricted housing agreement is accepted.
The motel, located at 12033 E. 38th Ave, has not seen any major upgrades, only minor repairs, and will be sold as is.
A developer agreement, part of broader efforts to tackle homelessness, needs the city council’s approval. Both a developer partner and the full council approval are anticipated later this year.
Supportive housing from this project is intended for individuals earning up to 30% of the area’s median income and enduring homelessness.

Empty Motels and Unmet Promises

Denver’s decision to sell the Stay Inn is part of a larger narrative in addressing homelessness within the city. Despite its initial $9 million investment in August 2023, the building has not served its intended purpose. Over 18 months have passed since the purchase, with other motels within Denver being utilized instead for housing the homeless, raising questions about the decision-making process.

The city aims to convert this empty structure into supportive housing through the sale. Prospective buyers would essentially assume responsibility not only for the motel itself, located at 12033 E. 38th Avenue, but also for aligning it with the city’s ongoing housing efforts.

While this property sale requires only a nominal $10 payment, there are substantial strings attached. Any potential owner must undertake necessary renovations to comply with building regulations and turn the motel into income-restricted supportive housing.

Paving a Path Forward

The condition of the Stay Inn Hotel poses significant challenges. The building, spanning four levels with 96 units, underwent minor modifications to include kitchenettes and sprinkler systems. However, extensive structural repairs to walkways, railings, and the electrical system remain a necessity, according to city officials.

“We have explored various options for converting the property to supportive housing, and in the fall of 2024, we identified a possible ownership transfer as the best means for accomplishing this,” said Derek Woodbury, spokesperson for the Denver Department of Housing Stability.

Potential developers face the additional task of acquiring rezoning, critical to housing tenants. The city’s Department of Housing Stability is in the process of selecting a development partner. Ensuring that both the developer agreement and any proposed purchase and sale agreement obtain city council approval is pivotal for moving forward.

Rebuilding Lives, One Unit at a Time

Denver’s homelessness crisis has grown increasingly dire, with a reported 10% increase in the homeless population from 2023 to 2024. Shelter availability remains a critical concern, necessitating innovative solutions such as this proposed redevelopment.

“We are hopeful that the procurement will result in a path forward for delivering supportive housing at the site,” said Woodbury.

As negotiations for a development partner are ongoing, Denver’s goal remains steadfast: finalize a deal and begin transformations by the end of the year. The motivation behind the city’s push is clear—alleviating homelessness by incentivizing invested stakeholders to commit to the community.