Proposed Additional Housing Development IncentiveCity of Dubuque
City Council Meeting
Action Items # 01.
Copyrighted
August 19, 2024
ITEM TITLE: Proposed Additional Housing Development Incentive
SUMMARY: City Manager recommending City Council approval of an additional
incentive to facilitate low- and moderate -income housing development
outside of the Greater Downtown Urban Renewal Area.
SUGGESTED Suggested Disposition: Receive and File; Approve
DISPOSITION:
ATTACHMENTS:
Description Type
MVM Memo City Manager Memo
Staff Memo Staff Memo
Masterpiece on the Mississippi
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Proposed Additional Housing Development Incentive
DATE: August 14, 2024
Dubuque
All -America City
1IIr
II
2007.2012.2013
2017*2019
Economic Development Director Jill Connors is recommending City Council approval of
an additional incentive to facilitate low- and moderate -income housing development
outside of the Greater Downtown Urban Renewal Area.
In 2022 the Greater Dubuque Development Corporation conducted a housing needs
study. The study showed that the City of Dubuque would be short approximately 1,100
housing units by 2030.
In September 2022, the City Council approved a slate of housing incentives that took
into consideration such factors as whether a project was located in an existing urban
revitalization district or a new one, and whether the project was creating market rate or
affordable units.
Currently, a new affordable multi -family housing development outside of the Greater
Downtown Urban Renewal Area is only eligible to receive the same 10-year tax
incentive as multi -family market -rate housing developments. This does not recognize
the financing complexities inherent to affordable housing development, and does not
support the city efforts to avoid concentrating all low and moderate income housing
development in one area of the community. .
The proposed additional housing development incentive would allow low and moderate
income housing development outside of the Greater Downtown Urban Renewal Area to
be eligible for the choice between 10 years of abatement followed by 5 years of Tax
Increment Financing or 15 years of Tax Increment Financing. This incentive would only
be available to residential developments where at least 60% of the units are low- and
moderate -income housing. This 60% requirement is in keeping with low-income housing
tax credit requirements and will allow the projects to remain competitive for those state
and federal incentives.
I concur with the recommendation and respectfully request Mayor and City Council
approval.
Mich el C. Van Milligen
MCVM:sv
Attachment
cc: Crenna Brumwell, City Attorney
Cori Burbach, Assistant City Manager
Jill Connors, Economic Development Director
Alexis Steger, Housing & Community Development Director
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Masterpiece on the Mississippi
Dubuque
All-Aeenn
%,IX rm:Ii'lI
2007.2012.2013
2017*2019
TO: Michael C. Van Milligen, City Manager
FROM: Jill M. Connors, Economic Development Director
SUBJECT: Proposed Additional Housing Development Incentive
DATE: August 12, 2024
Economic Development
Department
1300 Main Street
Dubuque, Iowa 52001-4763
Office (563) 589-4393
TTY (563) 690-6678
http://www.cityofdubuque.org
INTRODUCTION
This memorandum presents for review and approval an additional incentive to facilitate
low- and moderate -income housing development outside of the Greater Downtown Urban
Renewal Area.
BACKGROUND
In 2009, the City Council approved the Downtown Housing Incentive program. The goal
of this program is to encourage market -rate downtown rental and promote housing growth
in the area. Since inception, the program has successfully incentivized over 690 rental
units in the Greater Downtown Area.
In November 2019, the City Council approved expanding the Dubuque Urban
Revitalization Area to support economic development and affordable housing projects.
This expanded District was largely within the Greater Downtown Area as it contained
some of the oldest structures in Dubuque, historically significant properties, and a majority
of area residents lived below the median family income.
Despite these strong incentives geared toward promoting market -rate and affordable
housing creation, the demand for housing in Dubuque continued to exceed housing
creation.
In 2022 the Greater Dubuque Development Corporation conducted a housing needs
study. The study showed that the City of Dubuque would be short approximately 1,100
housing units by 2030.
In September 2022, the City Council approved a slate of housing incentives that took into
consideration such factors as whether a project was located in an existing urban
revitalization district or a new one, and whether the project was creating market rate or
affordable units.
In September 2023, the City Council approved an additional incentive to downtown
residential development. Developers creating multi -family housing in the Greater
Downtown Urban Renewal Area were given the choice between 10 years of abatement
followed by 5 years of Tax Increment Financing or 15 years of Tax Increment Financing.
The developer would weigh the risks and possible rewards of each option and indicate
their preference to our office for inclusion in the development agreement.
DISCUSSION
In ongoing review of our work, it has come to our attention that there is an existing blind
spot related to low- and moderate -income housing development not located within the
Greater Downtown Urban Renewal Area. Currently, a new affordable multi -family housing
development is only eligible to receive the same 10-year tax incentive as multi -family
market -rate housing developments. Given the financing complexities inherent to
affordable housing development, this incentive inadvertently discourages affordable
housing development while encouraging market rate housing development.
The proposed additional housing development incentive would allow low- and moderate -
income housing development to be eligible for the choice between 10 years of abatement
followed by 5 years of Tax Increment Financing or 15 years of Tax Increment Financing.
This incentive would only be available to residential developments where at least 60% of
the units are low- and moderate -income housing. This 60% requirement is in keeping with
low-income housing tax credit requirements and will allow the projects to remain
competitive for those state and federal incentives.
RECOMMENDATION/ ACTION STEP
In order to continue to aggressively address Dubuque's lack of sufficient housing stock at
all price points, which is a barrier to both workforce and population growth, and specifically
in our downtown core, I respectfully request approval to proceed with the housing
incentive described above.
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