Denver’s $308 million in COVID aid money will be spent on economic recovery efforts through 2026

Even when the Colorado economy was thriving pre-pandemic, Metro Caring was welcoming 400 to 500 low-income families a week to its market-style food pantry in Denver’s City Park West neighborhood.

Then in a flash in the spring of 2020, COVID-19 arrived, the economy shed jobs faster than at any point since the Great Depression and the need for Metro Caring’s fresh produce and other staples skyrocketed. Suddenly the nonprofit was providing food to around 1,200 households a week, using a drive-thru model in its parking lot with its building shut down to protect clients and staff against the virus’ spread.

The organization was able to keep the nutritious food flowing thanks in part to $110,000 in grants from the Denver Department of Public Health and Environment. Those grants were funded through the CARES Act, the more than $2 trillion life raft Congress deployed in the early months of the pandemic.

More than $12 billion in federal support has poured into Denver through the CARES Act and other COVID relief programs, roughly 22% of all the federal money dedicated to Colorado during the crisis. That 22% is roughly equal to the city’s contribution to the state’s GDP. On a per capita basis, Denver’s share of that financial support —  $16,776, according to a Denver Post analysis — dwarfs what smaller, rural places like Yuma County ($8,681 in federal aid per person) received.

The Denver Emergency Food Relief Fund grants Metro Caring received are just a tiny sliver of that avalanche of money, but it was essential for the nonprofit and the people it serves.

“It kept us going,” Erik Hicks, the organization’s co-CEO said earlier this month. “It kept us stocked in food and supported staffing.”

The money also allowed the organization to add home delivery for the first time ever, Hicks said. That was critical for older adults, people with medical conditions that made them more vulnerable to the virus and families with children who were suddenly doing remote learning from their homes and needed adult supervision.

Metro Caring and other organizations focused on food security, housing stability, child care and more in Denver may soon have the opportunity to receive support through a different well of COVID relief money. The American Rescue Plan Act, or ARPA, provides money to states and local governments for the purposes of supporting their economic recoveries and building a stronger foundation so that when the next recession inevitably comes, communities, especially historically marginalized ones like Black and Indigenous households, will be less vulnerable and bounce back faster.

The way ARPA’s State and Local Fiscal Recovery Funds are being distributed and managed, the money and its impact could ripple out in Denver past the point when COVID-19 fades from an active pandemic to an endemic part of life. Denver’s $308 million share of those funds — almost 16% of all of the ARPA funding dedicated to Colorado’s 64 counties — must be committed to specific used by the end of 2024 but can be spent through the end of 2026.

Treasury Secretary Janet Yellen visited Denver on March 11 to commemorate the one-year anniversary of ARPA passing. At the Mi Casa Resource Center in west Denver, she talked about the legislation’s long-view approach. Following past economic downturns, especially the long, slow slog of the Great Recession, there was what Yellen referred to as “economic scarring.” That took the form of people struggling with prolonged unemployment, housing instability and decreased access to nutritious food and health care.

“Avoiding these harmful outcomes, that is a core aspiration of this legislation,” Yellen said. “It is undeniably true that communities in Denver and across Colorado and indeed across the entire country are better off today than they would be without the American Rescue Plan. But what’s also true is we will be better off tomorrow and for years to come. … ”

Just what the long-term recovery will look like in Denver is still taking shape. The complete picture won’t come into view until the end of 2022 when the city goes through its 2023 budgeting process, city finance department spokeswoman Julie Smith said.

Denver’s $308 million ARPA dedication was split into two equal-sized pieces.

The first $154 million arrived last year. Right away $46.2 million of that was spent on restoring city services cut during the pandemic, canceling furloughs for city workers and hiring to fill vacancies, Smith said. Another $8.8 million was doled out as premium pay to city employees that did potentially dangerous in-person work before vaccines became widely available. And $25 million was earmarked for continued support for city services in 2022 including for the police, fire and public works departments.

But a bulk of the remaining money, $73.6 million, will soon be put to work funding more than 30 programs and initiatives designed to rebuild the Denver economy and make it more resilient and equitable in the process.

Efforts outlined on the city’s dedicated ARPA funding webpage include a $5 million small business grant fund, $1.8 million for grants for organizations that provide free summer programs for Denver kids and a $1 million for a food resiliency grant program. The food resiliency grants will be open to any organization focused on improving infrastructure, distribution and other elements of local food systems to better equip those systems to weather crises like the pandemic. The Denver Department of Public Health and the Environment, DDPHE, will administer those grants.

Metro Caring’s Hicks said the organization is always on the lookout for financial support. It is also committed to addressing the root causes of hunger and food insecurity. “DDPHE is a wonderful partner of ours and we would love to have that conversation,” he said of possibly tapping into those grants.

Specific timelines and other details are still being figured out for many ARPA-backed programs. As departments prepare to roll them out, the city is also getting ready for the second bundle of ARPA money, another $154 million that should arrive in July.

Denver officials have already gathered input from more than 6,000 residents about how ARPA money should be spent, Smith said. More feedback will be sought this summer before officials bring a plan for the second pot of money to the City Council in the latter part of the year.

Much like the $3.8 billion in ARPA funds Gov. Jared Polis is working with the state legislature to invest, the aim in Denver is to tackle big projects and ideas that can create lasting impacts for people.

The Biden administration has emphasized that ARPA-funded programs should be focused on helping historically marginalized groups. “Advancing equity must be a core part of management and (the) policy making processes,” reads a Department of the Treasury slide presentation about the funds.

COVID’s impacts have been largely inequitable, exposing and exacerbating existing rifts between haves and have nots in the American economy.

A survey circulated by Fortune in the spring of 2020, when COVID was inflicting some of its worst economic pain on the country, found that Black adults were twice as like to have been furloughed or laid off from their jobs as their white counterparts.

Demand at Metro Caring has throttled back from its peak early on in the pandemic. So far in 2022, the organization has distributed food to an average of 846 households per week. Of the clients who provide race and ethnicity data, 76% are people of color, Metro Caring officials say.

That needs and challenges are clear for Denver decision makers. Now it’s about finding the right levers to pull to create meaningful change with the mountain of federal money at their disposal.

“I think there is a real opportunity in the second tranche to do something generational in terms of the change we can have,” said Jonathon Steiner, the director of data and technology for the Denver Office of Economic Development. “We’re really trying to deliver those dollars to those who are most impacted by COVID itself.”

There is another key difference between ARPA and more quickly rolled out emergency federal programs like the Paycheck Protection Program that poured $3.2 billion into Denver small businesses’ bank accounts but may also have been subject to widespread fraud. The Biden administration is mandating detailed reporting on outcomes of ARPA-funded work, including details about equity.

The city’s ARPA site already has a project dashboard, tracking initiatives and their budgets. Once things get up and running to a greater degree, the site will also have an outcomes dashboard, said Smith, the finance department’s spokeswoman.

If programs aren’t delivering, the city is willing to pivot, said Lisa Martinez-Templeton, an economist with Denver’s finance office. She highlighted rates of eviction and foreclosure, level of employment and the percentage of people who are cost-burdened by their housing as a few of the metrics the city will be paying close attention to when seeking to measure ARPA’s impacts. That lines up with guidance from the Biden administration.

“I think really for me, the most important thing is honing in on the long-term systemic change,” Martinez-Templeton said. “It’s going to take time. I think patience is definitely a virtue in this case.”

The biggest chunk of the $73.6 million in ARPA funds ready for deployment falls under the umbrella of the city’s most visible and seemingly intractable problems: housing and homelessness. More than $50 million has been set aside for those purposes. That surge in money for the city’s Department of Housing Stability could not come at a more critical time.

The Denver metro area became the fifth least affordable housing market in the country in March, according to a survey done by Austin, Texas-based real estate tech company OJO Labs. The median price of a home in Denver rose 23% in the last year to reach $564,990, making a market that was already daunting for low- and middle-income earners that much more exclusionary.

Rental rates for one-bedroom apartments in the city have risen nearly 15% in the last year to reach a median price of $1,483 per month in March, according to ApartmentList.

The number of people staying the night in metro area homeless shelters who reported they were experiencing homelessness for the first time doubled in 2021 compared to 2020. Results of the 2022 point-in-time homelessness count have yet to be released but the spike in first-time homelessness is alarming for city officials.

“We definitely already had a (housing) crisis and we added an emergency to that and it didn’t make it better,” Britta Fisher, Denver’s chief housing officer, said of the pandemic. “What we’ve seen is households that have never worried about making rent suddenly unable to make their rent; people who have never had any experience with the system of support for people in the housing crisis now having to interact with these things.”

The city has a road map in place for its $50 million. It involves substantial upgrades to homeless shelters, the creation of a sanctioned safe parking site for people living out of vehicles and $1.5 million for eviction prevention.

Just shy of $4 million of that money is already going to work in Denver. The City Council approved a contract with Colorado Village Collaborative in February to extend and expand the organization’s safe outdoor sites program. The sites offer people experiencing homelessness with private ice fishing tents on fenced-in lots with lighting, toilets, water and other amenities. They are an alternative for people who, for various reasons, don’t feel comfortable in traditional shelters and might otherwise be sleeping on the streets.