Cedar Rapids adds incentives for housing development projects

10-year tax breaks aim to spur building in areas near large employers, major amenities

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CEDAR RAPIDS — Cedar Rapids officials are expanding tax breaks to encourage housing development in commercial areas near large employers and major amenities.

Now, developers can get 10 years tax free for housing development projects in urban settings, such as near Lindale Mall, Rockwell Collins and Westdale Mall. In the past, housing incentives were focused on downtown and immediate surrounding areas.

“We are now looking at rather than just the core — downtown, Czech Village, MedQuarter, NewBo, Kingston Village, Ellis — we are now looking at urban housing in general throughout the community,” said Jennifer Pratt, Cedar Rapids community development director.

Last week, Cedar Rapids City Council approved an amendment to the 2014 economic development plan, which articulates incentives and requirements for eligibility, to include an urban housing category. In effect, the amendment loosens requirements so more projects are eligible for tax breaks.

“The goal is to encourage construction of housing in established commercial areas with proximity to workplaces and amenities,” according to city documents supporting the rule change.

To be eligible as an urban housing project, the development must include at least three housing units, be located within an established commercial area and include “workforce housing” with a price tag of less than $200,000 per unit, unless it’s in a neighborhood without a proven housing market, according to a description of the program.

City documents define the location requirements loosely, noting “proximity to workplaces, retail, transit, etc.,” according to the description. There’s no geographic requirements.

“It is flexible,” Pratt said.

Rockwell and Lindale are cited as examples, but the city doesn’t have specific goals for where more housing should be built, Pratt said.

“We’d look at private developers to see where that makes sense,” she said.

The program could encourage developers to include housing as part of redevelopment projects, she said. The initiative fits with a city vision for walkable neighborhoods all over the city, such that people can walk to work or the store, she said.

“It is really about creating high functioning neighborhoods,” she said.

Not much open ground is available in Cedar Rapids, but Rockwell Drive NE near Rockwell Collins and repurposing parking lots near Lindale Mall have housing potential, said Scott Olson, a Cedar Rapids City Council member and commercial developer.

“There’s not many places out there, but there are some,” he said, noting strip malls with two and three floors of housing above is a design gaining traction in some areas.

Under the economic development program, development projects falling into one of 10 categories can be eligible for incentives. Projects made up of 75 percent housing can get tax incentives of 10 years, 100 percent exemption or reimbursement. Non-housing projects can get a 10-year, 44-percent tax exemption or 10-year, 50-percent tax reimbursement.

Categories for incentives include those needing a local match to leverage state or federal grants, green building, historic preservation, commercial reinvestment, brownfield and grayfield, high quality jobs, large site master plans, core district reinvestment and community benefit, according to the program description.

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