Iowa City, Coralville investing in ‘modest’ living options

In Johnson County, where the median monthly rent plus utilities is $173 more than the state average, officials from the two most populous municipalities - Iowa City and Coralville - are throwing local dollars behind a program designed to make housing more affordable for working individuals and families.

To date, Iowa City has pledged $403,000 and Coralville has earmarked $847,000 for workforce housing projects that now are eligible for incentives through the Iowa Economic Development Authority's Workforce Housing Tax Credit program, which began July 1, 2014.

Tina Hoffman, marketing and communications coordinator for the authority, said the program was a created to spur housing development for middle income Iowans. It provides up to $20 million per year for housing projects across the state. To receive funding, developers must show they have financial support - typically $1,000 per unit - from the municipalities in which they are proposing to build new units or renovate old ones.

'What we were finding as companies were growing and adding jobs ... there was a lack of housing in that mid range,” Hoffman said. 'This really was meant to ... focus on the need that communities were saying they had.”

A University of Iowa study titled 'Housing and Equity in Iowa City,” defines workforce housing as that which aims to attract those with middle incomes - or 80 percent to 120 percent of the annual median income level. The annual median income in Iowa in 2015 was $54,736, about $1,000 less than the national average, according to the most recent U.S. Census data.

In Johnson County, the median monthly rent plus utilities is $870, more than the state average of $697, U.S. Census data shows.

Tracy Hightshoe, Iowa City's neighborhood services coordinator, said the workforce housing program encourages developers to build more modest housing.

'Iowa City just needs housing,” she said. 'I think if you increase the supply of modest housing, it'll help the whole market.”

Though the state's tax credit program doesn't place rent or income stipulations on developers, it does require that the construction of each unit not exceed $200,000 for a new build or $250,000 for historic rehabilitation, according to the Iowa Economic Development Authority.

'With such demand, I'm surprised they don't put more parameters for it,” said Hightshoe, 'but if the goal across Iowa is just to spur construction, I think it's doing it's job.”

To date, Iowa City has supported four workforce housing projects and Coralville has supported eight.

Developer Gary Watts, president of Iowa City-based Watts Group, said he's seen the company's apartments at Iowa River Landing in Coralville being rented to professionals like nurses and others who work at University of Iowa hospitals. He said those living in the workforce units - there are 51 of them - wouldn't necessarily know they are because the company doesn't advertise the workforce housing status in any way.

The Watts Group received $51,000 in support from the Coralville City Council for the Iowa River Landing project, according to city data provided by Ellen Habel, assistant city administrator.

Last week, the Coralville City Council pledged $124,000 for another Watts Group development called Riverview Plaza, which is to have 124 workforce units on First Avenue.

According to city documents, rent in these units is expected to be between $950 and $1,350 per month for efficiency, one-bedrooom and two-bedroom apartments.

'I think the concept of rent control ... has to be very carefully sought out. It can have unintended consequences,” said Coralville Mayor John Lundell. He didn't elaborate. 'I think the way (the Workforce Housing Tax Credits program is) operating now, while its not perfect, it seems to be working well.”

Through the state program, developers can receive tax credits worth up to 10 percent the total cost of their project, Hoffman said.

Watts said the workforce housing tax credit helps to stimulate the housing market and the application process doesn't take very long for developers to complete.

'It's a fantastic tool for developers and it definitely helps ... get things started, make things work,” he added.

Lundell said its important for cities to have a mix of different kinds of housing and that can be a challenge because new developments on the fringe of cities tend to be targeted at those who 'have more resources” and are beyond the means of those just starting out in the workforce.

He said programs like the Workforce Housing Tax Credit program can help keep young professionals in the city.

'It's one of the biggest challenges of those businesses to have a good employment base to choose from,” Lundell said. 'It not only helps the residents but it helps the city as well.”

Here is a list of workforce housing projects and the number of units at each development being supported with $1,000 per unit by the cities of Coralville and Iowa City. All of the project, unless noted, remain in the development stage.

CORALVILLE

Coral Ridge Senior Apartments - 56 units

808 on 5th - 172 units*

Old Town - 72 units

Iowa River Landing - 51 units**

Meera Ventures - 38 units

Crossing Commons - 26 units

Argent Coralville - 308 units

Riverview Plaza - 124 units

IOWA CITY

Towncrest senior housing - 40 units

7 S. Linn St. - 36 units

Prairie Hill - 15 units

1201 and 1301 Gilbert St. - 312 units

* 72 of the workforce units are completed.

** All units are completed

Sources:

Cities of Coralville and Iowa City