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Dubuque Awarded the Iowa Thriving Communities Designation Copyrighted September 5, 2023 City of Dubuque Action Items # 010. City Council Meeting ITEM TITLE: Dubuque Awarded the lowa Thriving Communities Designation SUM MARY: City Manager recommending City Council receive and file the attached documentation recognizing the award from I FA as a Thriving Community, clarifying the benefits of the designation and encouraging developers to pursue housing projects in the Central Avenue CorridorArea. SUGGESTED Suggested Disposition: Receive and File DISPOSITION: ATTACHMENTS: Description Type MVM Memo City Manager Memo Staff Memo Staff Memo I FA lowa Thriving Community Award Notification Supporting Documentation Central Avenue Corridor Map Supporting Documentation Central Avenue Corridor Parking Supporting Documentation Workforce Housing Tax Credit FAQs from FY 23 Supporting Documentation Workforce Housing Tax Credit Program Overview Supporting Documentation Dubuque THE CITY QF � All-Meriea Ciry DLT B E ; . � . � �� MaSt� Z�C� aYd t�Q Mt55ZSSZ Z zoa�•zoiz•�ai3 YP pp za��*zai� TO: The Honorable Mayor and City Council Members FROM: Michael C. Van Milligen, City Manager SUBJECT: Dubuque Awarded the lowa Thriving Communities Designation DATE: August 31, 2023 Housing and Community Development Director Alexis Steger is recommending City Council receive and file the attached documentation recognizing the award from IFA as a Thriving Community, clarifying the benefits of the designation and encouraging developers to pursue housing projects in the Central Avenue Corridor Area. v Mic ael C. Van Milligen MCVM:sv Attachment cc: Crenna Brumwell, City Attorney Cori Burbach, Assistant City Manager Alexis Steger, Housing and Community Development Director Dubuque THE CITY OF � All•Ameriea Cily Du 8 E �,��r��:,�w�� , � ��, I I Maste iece on the Mississi i Z°°''Z°iZxz°13 � pp zai�*zoi9 TO: Michael C. Van Milligen, City Manager FROM: Alexis Steger, Housing and Community Development Director DATE: August 31, 2023 RE: Dubuque Awarded the lowa Thriving Communities Designation INTRODUCTION The lowa Finance Authority (IFA) released a new designation for communities that are taking intentional, and unique action to encourage housing development for all income levels. lowa Thriving Communities Designation provides additional scoring points to developers seeking tax credits that present a project to IFA in a Thriving Communities Designated area. BACKGROUND The lowa Thriving Communities Designation is intended to encourage housing development for all income levels. In the State of lowa housing demand is expected to grow by 42,000 households by 2030. The studies completed for the City of Dubuque show that approximately 1,100 of that demand will be in Dubuque, indicating a need for additional housing development. The City of Dubuque recognized this need and has been taking steps to encourage housing development through review of accessory dwelling units, building code review, and by adopting new housing incentives in September of 2022 that has spurred over 700 units proposed to be developed, and more inquiries are still being received today for further development. The lowa Thriving Communities designation will provide developers bonus points for the Workforce Tax Credit Program, a highly competitive program. Developers proposing projects in Dubuque's Central Avenue Corridor would receive the bonus points. Often there is 1 or 2 points between those awarded tax credits and those that are not, so this is an extremely important designation for the City of Dubuque to continue to attract housing development. The City Council Goals and Priorities include prioritizing the Central Avenue Corridor. The Thriving Community Designation will provide bonus points to developers specifically in this area of Dubuque to assist in the efforts of redevelopment. The Central Avenue Corridor Area Map is attached to the memo for reference, as well as a description of the Workforce Housing Tax Credit Program. This program helps redevelop existing buildings with allocations up to $1,000,000 per development. Service People Integrity Responsibility Innovation Teamwork RECOMMENDATION I respectfully request City Council receive and file the attached documentation recognizing the award from IFA as a Thriving Community and encouraging developers to pursue housing projects in the Central Avenue Corridor Area. Cc: Wally Wernimont, City Planner Jill Connors, Economic Development Director Service People Integrity Responsibility Innovation Teamwork From: Iowa Thrivina Communities Initiative To: Alexis Stecter; Brad Cavanacth Subject: Congratulations-Iowa Thriving Community Date: Monday,August 14,2023 9:47:04 AM Attachments: imaae935447.ona Caution! This message was sent from outside your organization. Allow sender I Block sender Congratulations! We are pleased to inform you that the City of Dubuque has been designated as an lowa Thriving Community by the lowa Finance Authority and lowa Economic Development Authority.A total of 11 cities have been named to the inaugural cohort of lowa Thriving Communities for their innovations and successful partnerships in attracting housing development for all. As you know, lowa Thriving Communities underwent an intensive application process and are expected to serve as models for other communities on both a statewide and national level in attracting housing development for all income levels. In addition, lowa Thriving Communities have been awarded incentive points for one or both of the Low-Income Housing Tax Credit or Workforce Housing Tax Credit programs to encourage developer interest in their communities. The City of Dubuque has been given incentive points for the WHTC program.The city must prioritize one neighborhood for the incentive points to be used and communicate that to the lowa Thriving Communities team no later than Aug. 21, 2023. The scoring points and designation are assigned to your community through the end of 2024. Housinglowa Conference lowa Thriving Communities are required to be represented at the Housinglowa Conference in Cedar Rapids. • Registration: Available here. All attendees must be registered for the event. • Sponsorship and Exhibit space opportunities for cities and partners—details available here. Tues., Sept. 5: 5:00-7:00—lowa Thriving Communities Reception (No cost,conference registration not required) The HarMac 411 6th Ave SE, Cedar Rapids Wed.,Sept. 6: -9:15 a.m - 12:00 p.m. lowa Thriving Communities Showcase Session (One representative per community needs to be assigned to present) Housinglowa Conference � Cedar Rapids DoubleTree 350 1st Ave NE, Cedar Rapids lowa Thriving Communities Conference Planning Session Call Thursday,Aug. 17-9:00-9:45 a.m. Teams meeting— Register here. At least one representative from each community is required to attend. Each lowa Thriving Community will be provided with unique topics to be highlighted during the session. Public Announcement IFA � IEDA will be publicly announcing lowa Thriving Communities designations soon, upon notification of all applicants. Program Incentive Points Low-Income Housing Tax Credit Program (LIHTCJ Workforce Housing Tax Credit Program (WHTCJ lowa Thriving Community Cedar Rapids WHTC Charles City LIHTC and WHTC Creston W HTC Dubuque WHTC Jefferson LIHTC and WHTC Knoxville WHTC Manning WHTC Muscatine WHTC Oskaloosa LIHTC and WHTC Stanton WHTC West Des Moines LIHTC Again, congratulations on being named an lowa Thriving Community! Respectfully, lowa Thriving Communities Team IOWA THRIVING COMMUNITIES INITIATIVE � � thriving@iowafinance.com t�� C�� +'�s� f��!�I�i k, .•. � � - k s - - a ' _ � � conriaentiaiity Notice: i ne intormation m tnis emaii may ae conriaentiai ana/or priviiegea. i nis emaii is mtenaea to ae reviewed by only the individual or organization named above. 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F�,. � p� �14asfc� retc�otr t1�e�1�Iicci�,i� � I . : �� Workforce Housing Tax Incentive Program Frequently Asked Questions 1. When is the application due date: A. June 9, 2023, at 11:59 PM 2. How will the$35 million tax credit allocation be split between urban areas and small cities? A. It will be split equally between urban areas and small cities ($17.5 million &$17.5 million) 3. What is the maximum Workforce Housing Tax Incentive award per project? A. The maximum award under the program is$1 million. 4. What is the per unit cost caps for the urban areas and small cities? A. The IEDA board set separate cost caps based on location and activity. • Single-family units in a small city and an urban area: $298,021 • Multi-family units in a small city and an urban area: $241,643 5. How is a single-family dwelling unit defined? A. Separate from other units by a ground-to-roof wall and does not have other units above or below. 6. Can an awarded tax credit be spread over multiple years if the developer does not have the tax liability to utilize the credit in one year? A. Yes. Credits can be carried forward for up to 5 years. 7. Are tax credits under this program transferrable? A. Yes.The state investment tax credit is fully transferrable. 8. How is the per unit cost calculated? Is it the cost for each unit in the project or the average cost of all units in the project? A. The average unit cost is calculated.The per unit figure is calculated by dividing the amount of costs directly related to the project by the number of units in the project. 9. Can a community in one of the largest 11 counties fall under the small city designation? A. Yes. Communities located in 11 most populous counties do fall under the small city designation if they have a population of 2500 or less and had less than 30%growth from 2010 to 2020 as determined by US census data. 10. Can I apply for Workforce Housing Tax Incentives if my project has already started? A. Yes. However, any costs incurred before an award is made would not be eligible costs;The tax credit would only be calculated on those costs incurred after an award is made. 11. Are phased projects eligible to apply for tax credits? I have a large project that will be completed in several phases. A. Yes. Each phase must apply separately and will be reviewed and evaluated separately. If one project phase is awarded,there is no guarantee subsequent projects phases will receive credits. 12. Do communities in the least populated 88 counties, under the small city category, automatically qualify for the 20%investment tax credit? A. Yes, projects in communities that fall under the small city category qualify for an investment tax credit of 20%of the first$150,000 investment of qualifying project costs. Most of the time this equates to being$30,00 per unit. 13. Is greenfield development allowed under this program?When would greenfield development be an eligible activity? A. Greenfield development is only allowed in communities under the small cities set aside. Under the Workforce Housing Tax Incentive program,greenfield development is defined as: "a site that does not meet the definition of a brownfield site or grayfield site. A project proposed at a site located on previously undeveloped or agricultural land shall be presumed to be a greenfield site". 14. How many applications can a developer submit for consideration in an application round? A. IEDA has decided to not limit the number of applications a developer can submit for the FY2024 application round. 15. Can developers receive both Workforce Housing Tax Incentives and Low-Income Housing Tax Credits for the same project? A. No. 16. Does lowagrants.gov allow separate documents to be uploaded in the application as supporting documentation?Can we upload multiple documents from a housing needs assessment? A. lowagrants.gov allows one document to be submitted. Multiple pages/sections can be merged into one document to be submitted. 17. For projects that are shown to be within the 100-year flood plain,according to the FEMA flood plain website,what is required to document that the site is no longer is in the 100-year flood plain? A. To apply, projects are required to submit a screenshot from the FEMA flood plain website that their project site is not in the 100-year flood plain. If the project site appears to be in the flood plain, documentation from FEMA is required. Either a LOMR (Letter of Map Revision) or a CLOMR (Conditional Letter of Map Revision). This process with FEMA can take upwards of 3 months to acquire. 8/29/23, 10:27 AM Workforce Housing Tax Credit�lowa Economic Development Authority WORKFORCE HOUSING TAX CREDIT Community Infrastructure / Grow Your Community / Community Infrastructure / Workforce Housing Tax Credit Assisting Construction or Rehabilitation of Housing in Communities with Workforce Housing Needs This program provides tax benefits to developers to provide housing in lowa communities,focusing especially on those projects using abandoned,empty or dilapidated properties. A Small Cities set aside for this program is available to eligible projects within the 88-least populous counties in lowa. Total program benefits limited to$1 million per project Tax incentives include a refund of sales,service or use taxes paid during construction Developers may receive a state investment tax credit of up to 10%of the investment directly related to the construction or rehabilitation of the housing. Developers qualifying under the Small Cities set aside may receive an investment tax credit of up to 20%of the investment directly related to the construction or rehabilitation of the housing.The state investment tax credit is fully transferable. Federal,state or local grants,tax credits,forgivable loans or other assistance not requiring repayment cannot be included for the purposes of calculating new investment Tax credit is based on the new investment used for the first$150,000 of value for each home or unit Tax credit is earned when the home or unit is certified for occupancy and can be carried forward for up to five additional years or until depleted,whichever occurs first Who Qualifies? Projects must meet one of four criteria: Housing development located on a grayfield or brownfield site Repair or rehabilitation of dilapidated housing stock Upper story housing development New construction in a greenfield (only communities or a project qualifying under the Small Cities set aside) Developer must build or rehabilitate at least four single-family homes or at least one multi-family building containing three or more units or at least two upper story units This broaram has a ber unit cost cab to ensure units created under the broaram are workforce housina https://www.iowaeda.com/workforce-housing-tax-cred iU 1/3 8/29/23, 10:27 AM Workforce Housing Tax Credit�lowa Economic Development Authority For FY 2024, project costs may not exceed the following per unit cost caps: single family unit in an urban area $298,021 single family unit in a small city $298,021 multi-family unit in an urban area 5241,643 multi-family unit in a small city S241,643 Historic preservation projects may not exceed 125%of the maximum per unit cost established based on project type and location The housing project must be completed within three years from the date of award The housing units must be for owner or renter occupied permanent residence,and not offered for rent on a daily or weekly basis. How Do I Apply? FY 2024 application round for Workforce Housing Tax Credit projects is open and will be due June 9,2023. Applications will be submitted through iowagrants.gov FY 2024 Workforce Housing Tax Incentive Application Workshop presentation and recording available in Resourcessection below. Resources Workforce Housing Program &Application Guide Developer Close Out Instructions for Workforce Housing Tax Incentive Projects GovConnectlowa Transfer Instructions Workforce Housing Frequently Asked Questions February 21,2023 WHTC workshop recording Related Programs Community Development Block Grant (CDBG) Programs Disaster Workforce Housing Tax Credits Workforce l�ousing Tax Credit Awards �__ � �� _. . ._ https://www.iowaeda.com/workforce-housing-tax-crediU 2/3 8/29/23, 10:27 AM Workforce Housing Tax Credit�lowa Economic Development Authority � � ��,� IEDA awards$35 million in credits to Workforce Housing Tax Credit projects 2� SEPTEM1 $29.8 Million in Tax Credits Awarded to Workforce Housing Projects 2� IEDA awarded credits to 49 housing projects For more information, contact: Richard Bell ❑ 515.348.6212 0 Email Richard https://www.iowaeda.com/workforce-housing-tax-crediU 3/3