Providing affordable housing is a challenge many growing communities across the country are facing, and it’s a top priority for the Iowa City City Council. 

The Council’s Strategic Plan aims to identify new efforts to expand our housing efforts throughout Iowa City. In 2016 the City adopted an Affordable Housing Action Plan that identified 15 action steps to support affordable housing. With almost all steps completed, the Council requested an update to the 2016 plan. On June 6, 2022 staff presented the 2022 Affordable Housing Action Plan. Staff will be presenting a 5-year implementation plan based on the actions identified in the coming weeks.  

2022 Affordable Housing Action Plan

 

 

 

 

 

 


Resources 


Housing Action Plan Updates

501 Project – The 2nd Housing First Project of Shelter House 

In June 2016, City Council approved code amendments to allow a new Housing First approach to help house those experiencing homelessness in Iowa City. The effort targets chronically homeless individuals who are frequent users of high-cost services such as correction systems, emergency rooms, mental health and substance abuse services and provides a permanent home. The Housing First approach does not place conditions of housing on the behavior of participants, but instead provides subsidized housing with the ongoing option to participate in supportive services.  

The first project, Cross Park Place, developed and operated by Shelter House, opened in January of 2019.  This project houses 24 one-bedroom apartments with on-site offices and an exam room for case managers and partnering health and behavioral health clinicians.  This June Shelter House will open the 2nd Housing First project in Iowa City – the 501 Project.  Their newest development offers 36 one-bedroom apartments for individuals experiencing chronic homelessness.  It offers on-site case management as was as exam rooms for partnering physical and behavioral health practitioners.  As with Cross Park Place, project-based vouchers from the Iowa City Housing Authority will support this development. 

The 501 Project starts leasing in June 2022.


Financial Incentives for Affordable Housing Providers (Developers and Non-Profit Organizations)

Affordable Housing Incentive Eligibility

Income Thresholds - Area Median Income Limit (MI) Based on Household Size (Total income of all adult members of household.) *Effective 6/15/2022. 

  • One-person household - $22,900, 30% MI; $38,150, 50% MI; $45,780, 60% MI; $61,050, 80% MI; $76,300, 100% MI; $83,930, 110% MI; $106,820, 140% MI.
  • Two-person household - $26,200, 30% MI; $43,600, 50% MI; $52,320, 60% MI; $69,800, 80% MI; $87,200, 100% MI; $95,920, 110% MI; $122,080, 140% MI.
  • Three-person household - $29,450, 30% MI; $49,050, 50% MI; $58,860, 60% MI; $78,500, 80% MI; $98,100, 100% MI; $107,910, 110% MI; $137,340, 140% MI
  • Four-person household - $32,700, 30% MI; $54,000, 50% MI, $65,400, 60% MI; $87,200, 80% MI; $109,000, 100% MI; $119,900, 110% MI; $152,600, 140% MI
Affordable Housing Program Details

Affordable Housing Provision - Annexation Policy

Neighborhood and Development Services processes annexation applications and administers affordable housing agreements.

  • Applies to annexations that will create 10 or more housing units.
  • Requires the provision of affordable units equal to 10% of the total units in the annexed area to provide long-term affordability, preferably for a term of not less than 20 years.
  • Requirement can be met through onsite development, transfer of lots/units to the City or affordable housing provider, fee-in-lieu to the City’s affordable housing fund, or participation in a state or federal housing program.
  • Pre-annexation Agreement or Conditional Zoning Agreement requires developer to enter an Affordable Housing Agreement upon annexation.
  • Opportunity to use Residential Tax Increment Financing (TIF) funds to purchase lots for affordable housing to help developer meet requirement and provide upfront cash (sale of lot(s)).      

Income Maximum: Income targets shall be consistent with the City’s existing program requirements

Type of Housing: Owner or Rental

Learn more / Apply: Contact Urban Planning at 319-356-5251

Tax Increment Financing (TIF) for New Residential Development

Administered by City Manager’s Office, Economic Development Coordinator. Letter of interest and project information required for consideration (sources and uses of funds, project description, rent structure, timeline and proposed elevations must be included). 

Council Action Plan: Seek out and approve residential TIF applications for infrastructure when project provides benefits such as permanent affordable housing. City shall consider an application for residential TIF for new annexations to meet permanent affordable housing goals.

  • A portion of the tax increment generated from the Housing TIF must be spent on affordable housing within the city limits. If does not have to be spent in the same TIF district that generated the funds.
  • The amount of assistance for affordable housing is required to equal or exceed the percentage of the project cost equal to the percentage of low and moderate income (LMI) persons in the County. For example to fully fund a development request of $600,000, then 45% of the total TIF (the LMI percentage of the County) must to go to an Affordable Housing Fund that can be used citywide. 

Note: New projects zoned Riverfront Crossings and TIF projects with a residential component must provide a certain percentage of affordable units for 10 or 20 years based on funding source. Developers may meet this requirement through onsite affordable housing, a fee-in-lieu or by providing affordable housing elsewhere in the community, subject to the City’s sole discretion and based on the funding source.

This provides an opportunity for affordable housing providers to partner with for profit developers by providing services such as income qualification and reporting requirements, property management of the affordable units (referrals, outreach, leasing, etc.) or through acquiring the units to operate as affordable housing.

Income Maximum: 80% MI Owner, 60% MI Rental

Type of Housing: Owner or Rental

Learn more / Apply: Contact Economic Development at 319-356-5248

CDBG/HOME Competitive Housing Programs

Administered by Neighborhood and Development Services.

  • Iowa City receives approximately $450,000 annually for housing projects from the U.S. Department of Housing and Urban Development (HUD) to fund a wide range of activities including new construction, acquisition, and/or rehabilitation of housing that benefits income qualified residents – buyer or tenant.
  • Funds are made available to housing providers through a competitive annual application process. Applications are available in December and are due mid-January each year.
  • Various federal regulations may apply based on the use of funds such as Davis Bacon, lead requirements, relocation assistance, audit requirements, and others. Speak with NDS staff to determine what requirements may apply to your project.

Special program for rental rehabilitation: Non-profit housing providers, as well as private landlords, may apply year-round for HOME rental rehabilitation. City allocates $90,000 annually for this purpose. Properties must be within the CDBG targeted area (link) and must be a single family or duplex property with a valid rental permit. Tenants must be below 60% MI and rent can’t exceed the HOME Fair Market Rent throughout the affordability period. Projects can receive up to $24,999 per unit. 50% provided as a grant, 50% as a zero-interest loan.

Income Maximum: 80% MI Owner, 60% MI Rental

Type of Housing: Owner or Rental

Learn more / Apply: icgov.org/actionplanRental Rehab webpage

Emergent Situations   

Administered by Neighborhood and Development Services.

  • The fund is used for low-income households with unanticipated housing costs due to actions not within their control.
  • $50,000 annually allocated to this fund. Prior examples of past assistance include relocation assistance to income qualified residents required to move due to a rezoning or a mobile home park closure and winterization of mobile homes.

Income Maximum: Based on request

Type of Housing: Housing assistance that is needed urgently and where the applicant is unable to wait until next relevant application round

Learn more / Apply: http://www.icgov.org/AffordableHousing

Housing Trust Fund of Johnson County (HTFJC)
  • Receives approximately $700,000 annually from the City (HTFJC also receives Johnson County and State Housing Trust funds to support housing in Johnson County) to allocate to affordable housing projects.
  • At least 20% of their City award must be used to support Low-Income Housing Tax Credit (LIHTC) projects. HTFJC holds an annual LIHTC application round.
  • Funds are allocated quarterly through their Revolving Loan Program. Majority of funds allocated are in the form of no or low interest loans. Limited grants are available.

Income Maximum: 80% MI, 60% MI - LIHTC

Type of Housing: Owner or Rental

Learn more / Apply: www.htfjc.org/revolving-loan-program

Opportunity Fund

Administered by Neighborhood and Development Services.

  • The Opportunity Fund is available for any housing opportunity that becomes available that supports the City’s housing goals and is approved by City Council.
  • Applications accepted year-round.
  • $75,000 annually allocated to this fund; however, any remaining balance from various other City funds (Healthy Homes, Secure Housing, Emergent Situations, and former Land Banking fund) are deposited to this fund at the end of each fiscal year. Also has access to City’s Affordable Housing Fund (TIF & Riverfront Crossings Fee-in-Lieu payments – various requirements apply based on source of funds).

Income Maximum: Based on request (Typically 80% MI - Owner, 60% MI Rental)

Type of Housing: Housing that does not qualify for other City funds or due to timing is unable to wait until next relevant application round

Learn more / Apply: www.icgov.org/AffordableHousing

Regulatory Incentives

Administered by Neighborhood and Development Services.

  • Increased building height may be granted for affordable housing projects in Riverfront Crossings zones.
  • Density bonuses, adjustments to zone standards and building type standards may be granted for affordable housing projects within Form-Based zones. The Form-Based zones and standards were created in conjunction with an update to the South District Plan and may be applied in this area.
  • Within the PRM zone, dwelling units committed to the City’s assisted housing program, or some other affordable housing program approved by the City (not to exceed 30% of all units) may request a height increase, setback reduction, and/or increase in building coverage.

Income Maximum: Varies

Type of Housing: Owner

Learn more / Apply: Contact Urban Planning at 319-356-5251

Tax Exemption for Affordable Rental Housing

Administered by City Manager’s Office, Economic Development Coordinator.

Letter of interest and project information required for consideration (sources and uses of funds, project description, rent structure, timeline and proposed elevations must be included).

  • 40% tax exemption (includes all property tax - City, County and School District) for 10 years, provided on all units in a residential development of over six units.
  • Rent for the affordable units is limited to what a household at 40% of median income can afford minus the estimated utility allowance for tenant paid utilities.
  • Approval process may take 3-4 months. Exemption must be approved prior to construction.

Income Maximum: At least 15% of total units leased to households under 40% MI

Type of Housing: Multi-family new construction of at least 6 or more rental units by a for-profit entity (includes LIHTC projects)

Learn more / Apply: Contact Economic Development at 319-356-5248

Additional Resources/Guidance from HUD to Develop Affordable Housing