Denver’s nine‑million‑dollar hotel for unhoused remains empty

Denver’s former Stay Inn at 12033 E. 38th Avenue has become a test case in how hard it can be to turn a hotel into supportive housing. The City of Denver paid $9 million for the property in early 2023 and expected to move people in within six to 12 months, according to 9NEWS. More than three years after the plan was first pitched and months after the city began trying to hand the project to another operator, the building itself remains empty. City officials say financing rules, voucher shortages and the economics of operating permanent supportive housing have slowed the project. ### How long has the building been sitting unused? May 13, 2026, is the clearest public marker of the latest delay. On that date, 9NEWS reported that the old Stay Inn near Interstate 70 and Peoria Street would “almost certainly not house anyone for at least another year,” citing interviews with Denver housing officials. The property has been empty since Denver bought it in 2023. Denverite reported in February 2025 that the city had planned to open the four-story motel’s 95 guest rooms to people exiting homelessness by the end of 2023, but the site “remains unused and empty to this day.” 9NEWS described the building as a 96-unit property that has yet to house a single resident. (9news.com) ### Why did Denver buy the Stay Inn in the first place? The original plan predates the purchase. Denverite reported that U.S. Representative Diana DeGette had backed an earlier proposal to buy the property with a mix of city and federal money and convert it into supportive housing for people experiencing homelessness, though that effort stalled in Congress. (denverite.com) Federal money still shaped the eventual deal. Denverite said Denver used $2 million from the U.S. Department of Housing and Urban Development to help buy the building, and 9NEWS later reported that the funding came with restrictions requiring the hotel to operate as permanent supportive housing. HOST Executive Director Cole Chandler told 9NEWS that “there were a lot of strings attached” to the federal funding and that the hotel “has to operate as permanent supportive housing.” (denverite.com) ### What does the city say went wrong? Cole Chandler, who leads Denver’s Department of Housing Stability, told 9NEWS the project no longer pencils out the way it did when it was conceived. He said housing vouchers that were more available in 2021 are harder to secure now, making the model less feasible in 2026. Chandler told the station, “We’re back to the drawing board” and “It’s time for us to get creative.” (denverite.com) Julia Marvin, a spokesperson for the Department of Housing Stability, gave a related explanation in February 2025 when the city moved to sell the property. Marvin told Denverite that a private entity would be better equipped to manage the renovations, project execution and supportive-housing operations. She said the city was looking for a partner “well-equipped to handle the complexities of renovations, managing the project, and operating it as supportive housing.” (9news.com) ### Why did Denver put a $9 million property on the market for $10? November 2024 procurement documents show Denver was not trying to recover its purchase price. The city’s request for proposals offered the property for $10 to a developer, nonprofit or other entity willing to buy it as-is, renovate it and run it primarily as permanent supportive housing. (denverite.com) The low price came with added costs and long-term restrictions. Denverite reported that renovations and maintenance were expected to cost about $5 million, and the city’s pre-bid slide deck said a 99-year covenant and performance mortgage would be recorded at closing to preserve the property as affordable housing. ### Is any part of the site being used now? (denvergov.org) The broader site is not entirely inactive. Denver’s Stay Inn page says a Stay Inn community “opened its doors” on Dec. 31, 2023, as part of Mayor Mike Johnston’s All In Mile High initiative, with 54 units for single adults managed by Bayaud. (denverite.com) That appears to refer to the adjacent micro-community rather than the boarded-up hotel itself. 9NEWS reported that while the parking lot has housed a micro-community of tiny homes for years, the building and its 96 units have not housed a single resident. Denver7 likewise reported that tiny homes were operating next to the fenced motel while the hotel remained vacant. (denvergov.org) ### Who is criticizing the delay? Amy Beck of Together Denver told Denver7 in August 2025 that the lack of progress was “shameful” and said another place for people to stay “would be really valuable to our community.” Jeremy Lamping, who told Denver7 he had been living on the streets for several years, called the situation “a lot of wasted money.” (9news.com) Shontel Lewis, the Denver City Council member whose district includes the property, told 9NEWS in May 2026 that the continued delay was “disappointing.” Chandler told the same outlet, “The public needs this project to be open” and “We want this project to be open.” ### What happens next? (denver7.com) February 2025 was the city’s formal pivot to a new owner-operator. Denverite reported that any sale would need Denver City Council approval, while the city’s November 2024 procurement documents required bidders to submit renovation timelines and accept the affordable-housing covenant. As of May 13, 2026, the prior effort to find an operator had collapsed. 9NEWS reported that one nonprofit bidder had been told it was out of the running, a California for-profit that received a provisional award was also out, and Chandler said Denver was “back to the drawing board.” (denverite.com) (9news.com)