116 3rd St SE
Cedar Rapids, Iowa 52401
IOWA CITY — A new senior housing development in northeast Iowa City will have 36 affordable units for individuals 55 and older when construction is completed, which is anticipated in 2024.
The Iowa Finance Authority on Nov. 2 awarded nearly $1 million in federal housing tax credits to the NEX senior housing development project at 4643 Herbert Hoover Highway.
The project will receive $948,203 annually for 10 years after it is constructed and leased, said Ashley Jared, communications director for the authority. The income and rent restrictions will remain in place for 30 years.
The new construction project includes 40 two-bedroom units for individuals 55 and older. The total cost for the project is $11.3 million, Jared said.
There will be 36 affordable units and four units available at market rate. Of the 36 affordable units, 10 will be available at 40 percent of annual median income, 18 units at 50 percent and eight units at 60 percent, Jared said.
Income limits are determined by the household size. For a household of one, for instance, 40 percent median income is $30,520; 50 percent is $38,150; and 60 percent is $45,780, according to the authority.
The proposed monthly rents for the two-bedroom units will start at $916, Jared said. Under the restrictions, the rent won’t exceed $981 for 40 percent median income, $1,226 for 50 percent median income and $1,471 for 60 percent median income.
Construction is anticipated to start in the summer or early fall of 2023, said Megan Carr of Sand Development, which is working with the other developers on the project. The project has a 12-month construction period and could be completed by fall 2024.
The population growth of people 65 and older in Johnson County is faster than any other age group in the county. About 13 percent of Johnson County’s population is people 65 years and older, according to population estimates from the U.S. Census Bureau. In Iowa City, it’s 11 percent.
Project will ‘fill a need’
The Iowa Finance Authority originally awarded the 2022 housing tax credits in August, but one project opted not to accept the award. NEX Senior was the project receiving the next highest score.
The NEX Senior project has been presented to the authority three times in the last three years, said Ellen McCabe, executive director of the Housing Trust Fund of Johnson County.
“This project is one that we’re very happy to see move forward,” McCabe said, adding that the project had been the runner-up previous times, too.
McCabe said the county Housing Trust Fund has committed $720,000 toward the project, and the city of Iowa City has committed $380,000. Both payments are one-time loans that will be paid back over 30 years.
The senior housing project is adjacent to NEX Apartments, which has been open since 2020. Minnesota-based Sand Development also developed this property and currently manages it.
Carr said the senior housing development is a “good addition to the area.”
“We're just excited,” Tracy Hightshoe, the city’s neighborhood and development services director, said. “You don't get tax credits every year. They're competitive. It's always great when we get them, and they always fill a need.”
The land has already been rezoned to allow for the development, and there is no demolition required before construction begins, Hightshoe said.
More work to be done
Jared said authority data show the state needs “tens of thousands of additional housing units for all incomes and ages across the state by 2030 to meet the demand of our robust economy.”
Seniors are an important group when discussing housing affordability because their income becomes fixed as they age out of the workforce, said Sara Barron, executive director of the Johnson County Affordable Housing Coalition.
“Having housing that is affordable to seniors and people on fixed incomes is a huge part of making sure that everyone in the community is safely and stably housed,” Barron said. “That's why we're glad to see this investment in senior housing in Iowa City.”
This project doesn’t complete the work of affordable housing for seniors, Barron said, but it will make a “tremendous difference” for individuals who are able to move into this housing.
“We have about 10,000 households that are cost burdened, so it's an uphill battle,” McCabe said. “This is going to help 36 of those households. We're always in the business of developing housing that's affordable.”
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